Leverage and My Mistakes
I was watching a business program on the weekend and exercising some of the hindsight that is of course crystal clear once you’ve left a business or for that matter any part in your career development.
The program was reviewing the implementation of an automated cash register system in a food / retail shop. It showed how under a new system that all the cash registers were touch screens which accurately recorded all the information pertaining to each sale and then directly put that information into the accounting software. It also showed that now the shop owner, from her home, could get reports on how productive each staff member was, what sales were per hour, what areas were moving quickly etc. What great tool for leverage for this business owner.
As a small business owner I know that many of us start up our businesses and implement our own strategies for many areas including accounting and data recording. We’ll use a normal cash register, or a ledger book, or if you’re adept with a spreadsheet like I am, you can pretty much make up your own system for anything to do with recording.
The problems then come when:
- you want to go on holiday (no-one will ever understand your system like you do)
- your company grows (a manual / spreadsheet based system is great when there’s 2 or 8 people to look after, try looking after 50-500 like this and see what a tax on your time it is)
- if like me – you sell your business (the time you even need to take to train someone else to do your system will be phenomenal)
I pride myself on embracing technology and using the power of its leverage – yet looking back there were certain areas within my business where we didn’t implement the best technology for the job and I take total responsibility for that. Towards the end I recognized a need for it – but never took that step. There were many reasons I justified in my head not moving forward to embrace the best technology – the up front cost, how would I know the system would work perfectly, the time to input information into a new system, the current system works fine, will we be able to generate the same reports / with the same ease that we currently can, etc etc etc.
The sooner you implement new technology (after doing your research) the sooner you can overcome all those obstacles. Work out how much time it’s taking you to do this job per week (in my case the main area that sticks out is sales peoples pays / commissions / bonuses), then multiply that out by a year at what YOU should be earning per hour, then add onto that how much time it would take you to train someone else (to your standards), and work out in months where your break even point is.
For example, say you do a job each fortnight that takes 4 hours, but would take you only 1 hour with the correct technology. That technology costs say $5,000. Even just looking at those simple figures, let’s say your worth as an hourly rate (we’ll just pluck out a figure) is $50 per hour. Each fortnight you’re wasting $150 with your current system. In 33.3 fortnights – ie just over a year you’ll have paid off this new system. Not only that, but your business will be more systemized and more saleable. This doesn’t even take into consideration the opportunity you now have with that extra time to create additional income for your business through innovation or implementation that you never had time to before. The other great thing about a professional system – they’re usually pretty easy to learn, meaning that you’ll probably get back that extra one hour of your time too.
Technology is a great form of leverage – another form is delegation. Whether you’re a sales person, a manager, an employee, a business owner – you can use some form of leverage to increase your productiveness and your businesses bottom line.
As a sales person – is it time to look at a personal assistant to do those tasks which make you no money but still need to be done (photocopying, photography, entering database details, key cutting, creating marketing material) With technology you can even look at a virtual assistant – or simply a casual / part time assistant until you’re ready to take the next step. Maybe it’s time to look towards a professional design company to increase the effectiveness of your marketing and personal image.
As a manager – what tasks will you just not let go of? I hear managers so often say – it’ll take me more time to explain it than just to do it myself. Well that’s probably well and true for the first time, maybe the second and third times as well – but that’s the great thing about most people – they’ll pick up something eventually if they’re trained appropriately. There’s a great quote that says – don’t let perfect get in the way of good. The person you delegate to may not do it as perfectly as you – but what else can you accomplish that will eclipse that if you just had the time?
As an employee – is everything you do systemized? Do you have a back up for each of your jobs so that when you’re away you don’t come back to a whole pile of work? Don’t think you need to wait for your boss or manager to implement these structures – use some initiative and start this yourself.
As a business owner – what technology are you holding off on getting that will take your business to the next level? For me – this is one of the big mistakes I can see that I missed out on in one area of my last business. A big lesson leant for me and a mistake I’ll try not to repeat in the future.
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