Okay, tell me if this sounds familiar?
You’re a small business operator, or maybe the CFO of a small company.
It’s your job to stay on top of things, but sometimes you suspect there are holes in the business.
You wonder whether the organisation is losing money in sneaky, secret ways, thanks to cost and time inefficiencies that you are simply not aware of.
And there never seems to be enough hours in the day to get a complete picture and take care of all the soul-sapping ‘little’ things! Arrrgh!
Welcome to the wonderful world of small business ownership!
As I enter for 14th year as a business owner (who’da thunk it), in a world where access to information is almost with limit, I’m still stunned when I see new and established business owners making all the same rookie mistakes.
So, here are 7 ways that small business owners self-sabotage.
SELF-SABOTAGE#1. They never audit their time.
Do you ever audit your time? (Time is important. You can’t buy more of it)
Most small business owners get caught up in the minutiae of a business.
They become trapped like a hamster in a wheel, spinning, spinning, spinning, never taking the time to stop and look up, only to discover they are getting nowhere!
Tomes of literature are already dedicated to this topic. But they don’t seem to stop the vast majority of small business owners from managing their time in idiotic ways.
One simple way to dramatically improve your personal time management, as a business owner, is to audit your time and segment your activities into ‘core’ tasks and ‘mechanical’ tasks.
Core tasks are responsibilities only you can do – or they require the skills of someone like you. they might depend upon your personal skill-set or your role as a business manager.
One example is quality control. Sometimes other can’t progress on their work without your sign off. And, if you’re not available to give approval, you become the bottleneck.
Another example is sales. Often, when a business is new, the best sales person will be the owner. If you are the most profitable member of your team, how much is your time worth? Should you truly be mucking around with invoices (and such) when you could be selling?
A third example might be financial management. Few people will be able to identify cost savings or have the authority to switch to cheaper or more efficient practices and solutions. (That’s one of the reasons we created this cheat sheet… to help you do just that!)
On the other hand, mechanical tasks are day-to-day activities that could be easily outsourced or automated with online tools. These are ‘low-value’ tasks that you need to avoid at all costs.
For example, you might have a big presentation coming up. The usual modus operandi of most small business owners is to spend four hours struggling with PowerPoint. However, there are plenty of experts on freelancer sites that only special in assembling PowerPoint presentations. This is a task that could be outsourced for $25 while you spend valuable time rehearsing.
Other responsibilities can be automated. For example, far too many small business owners spend far too much time wrestling with social media. Yet, a plethora of tools exist to auto post or dispatch a summary of activities as an email, direct to your inbox, once a day.
What tasks could be outsourced or automated? When should you delegate?Action: Make a list of your core tasks versus mechanical tasks. Identify which responsibilities truly require your personal time and attention, and which ones could be outsourced or automated. Try auditing your time, using this two column approach, over a one to five-day period. Click here.
SELF-SABOTAGE#2. They never audit their invoicing.
Do you audit your invoicing? (And outsource wherever possible?)
Even profitable businesses can go under purely due to poor cashflow management.
This cost and time saving strategy is one of the most obvious and the most neglected.
It’s time to put an end to sloppy invoicing and payment collection.
Set up a schedule to ensure invoices are being dispatched in a timely manner and make sure that they are being followed-up promptly.
In most businesses, invoicing and payment collection are not core responsibilities. You can use automation tools to manage this process, or even outsource the follow-up and collection.Action: Write down what you think is a reasonable amount of time for a supplier to pay you versus how long the supplier actually takes. Can you come up with incentives to prompt customers and clients to pay you faster? What automation tools could you use to follow up? Click here.
SELF-SABOTAGE#3. They don’t audit their base.
Instead of spending your precious time chasing after new customers and clients, focus on your existing customers, those who are the most profitable and engage with your business repeatedly.
Keep your existing customers happy, and figure out ways in which you could grow your relationship with them. In other words, love the ones you’re with!
Selling more things to existing customers and clients is one of the most reliable ways to boost cashflow. In most instances, you don’t even need to create new products or services. Simply find complementary non-competitive organisations to partner with.Action: Create a list of your most profitable and consistent customers. What else could you offer them to ensure they keep coming back? What might they need AFTER they work with or buy from you? Click here.
SELF-SABOTAGE#4. They don’t shop around.
Audit your suppliers. Little wins lead to big cost savings.
When seeking ways to cut costs, the temptation is to chase big wins, by closing down projects or reducing on staff overheads (the painful way). Rather, focus on little cost saving endeavours,
Let the small wins add up. Focus on the obvious, the most easily identifiable expenses and shop around. While it is important to identify your biggest expenses, don’t underestimate the amount of savings you could achieve by seeking better terms from obvious suppliers, the usual suspects, like banks and energy suppliers. You’ve read the statistics. You know it pays to shop around.Action: Set aside a small amount of time each quarter, perhaps around the time you’re putting together your BAS, to revisit your supplier list and shop around. Look for ways to cut costs, no matter how small, and seek out suppliers who can offer you the biggest bang for your buck. Click here.
SELF-SABOTAGE#5. They don’t understand the power of leverage.
Leverage, leverage, leverage.
Make every dollar count. Think outside the box and go the extra step to get as much out of your time and resources as you possibly can, starting with your efforts in this list!
For example, once you begin to observe how you are spending your time, you will find ways to outsource, automate and delegate and this will free up more time! Take advantage of that freedom to isolate the most profitable uses of your newly acquired freedom and attention.
If you have begun to clean up sloppy invoicing practices AND begun to identify new products and services that you could strategically offer to existing clients, why not combine the two? Add new offers to your invoices. This is something that all the big brands do.
And, finally, when shopping around for suppliers, seek out offers that include bonuses and incentives, such as travel and frequent flier points. These can be used for personal purposes or to reward staff. The main lesson here is to always… leverage, leverage, leverage.Action: Revisit the previous four strategies and identify ways in which you could get more out of each audit. When auditing your time, how else could you exploit your specialized skill-set? Could these talents become the basis of a strategic alliance partnership? When auditing your invoicing, could incorporate additional offers? When auditing suppliers, don’t just look at price. Look at what else suppliers could throw in to sweeten the deal, such as frequent flier points. Click here.
What are the last two ways that small business owners self-sabotage?