We work with a number of small businesses in all stages, from start-ups to mature businesses that are ready to be sold. Over the years, we’ve noticed some common themes with businesses that are struggling. One of the main reasons is that business owners don’t delegate enough of the tasks that need to be done.
Here are some of the reasons why small businesses fail and some steps you can take to make sure yours doesn’t.
You’re working too much
One of the most common things we see is that clients are working 70 hours a week because they are convinced that none of their tasks can be delegated.
Working 70 hours a week (and not likely to be taking vacations) puts an immense stress on your health, both physical and mental. This business owner probably isn’t sleeping enough or eating right, not to mention that they’re probably not having any fun. Nobody who started their own business left a 9-5 job in order to work more. If you’re incapacitated, you’re not going to be of any use to anyone.
The solution: Delegate
It may seem obvious, but the business owner doesn’t need to be the person that takes care of every aspect of the business.
Anyone who’s ever hired an assistant or employee knows there is training involved. Tara’s brought on an admin support person, but he’s not fully trained yet, so he’s not as fast as she is.
Even if the service you offer is customized, tailored and unique, there will be components that will be the same and something easy to teach someone.
One of the best things an owner can do is set up a series of systems that someone can be trained. No business should be so specific that every project is unique.
The catch here is that you have to hire someone before the situation becomes critical – if you don’t know what that point is, give us a call.
Contractor vs Employee
I’ve spoken with business owners who hire contractors on a regular basis for specific projects. This can be effective when there is a lot of time between projects, but when projects are back-to-back, it often makes more sense to hire a full-timer to do components of each job.
I hear objections like concerns about committing to paying salaries, but chances are that the contractors are costing up to twice as much as an employee. Remember, a contractor is running their own business and the fees they charge have to cover their own overhead as well as salary.
If you hire a salaried employee, you have more control over the workflow. A contractor who works remotely likely has other clients and you’re not necessarily their priority when you need them. We can help by demystifying the hiring process and educating you about everything you need to know when hiring an employee.
A big part of what we do is give business owners an objective third party view that looks at the business on an annual basis. Quite often we realize that business owners don’t get to this point because they’re too busy working.
Let’s take a videographer as an example. They may be hiring separate editors for each project but don’t really have a handle on how much they’re paying. They’re so focused on the day to day, they don’t see how much they’re spending on the subcontractors. Hiring a full-time editor could save them a lot of time and money.
We’re happy to sit down and help figure out whether it makes more sense to subcontract work out or to have someone on staff. It’s a high-level look that we find quite often when people are doing it themselves, those big picture things get lost.
If you have any questions about hiring staff, please get in touch.