Do any of these situations resonate with you?
- I'm so busy keeping up the website that I don't have time to work on promoting the site.
- I keep missing payments and I've lost a few customers because I've misplaced the information I need to complete transactions.
- I'm losing customers here and there because of a problem with my website but I'm so busy servicing the other customers that I never have time to fix it.
- I can see so many more opportunities to sell and expand, but I don't have time to do the work to bring in the new line or position myself in the new market.
- I'm behind on paying in VAT or submitting governmental forms and I'm getting worried that soon I'll be in trouble.
If so, it may be time for you to look at the way you are running your business, especially if you are the CEO-marketer-bookkeeper-pick and packer-shipper-computer support staff-cleaning crew rolled into one.
Many entrepreneurs start out as sole proprietors, that is, individuals who begin a business that is solely owned by them, claimed on their personal income tax. It's an excellent way to start a business because there are no startup costs for forming a corporation, no corporate taxes to pay and straightforward accounting and tax reporting practices. (The major drawbacks in sole proprietorship are the inability to be protected from liability, i.e., your personal assets are at risk and the reduced likelihood of receiving any kind of outside funding). As business builds, the sole proprietor can determine when it makes sense to change corporate form, add additional staff, take on outside investment.
If you are currently operating your business by yourself and you are beginning to experience the sorts of problems describd earlier in this article, it's time to consider when the timing will be right to add new talent to the organisation.
Here are some questions to think about:
1. How is the business being hurt by my solo status?
Take a good look at your situation. Remember that most entrepreneurs work far more than 40 hours a week. Can you manage with some added commitment? If you just need to add a few more hours and you can do it without getting a divorce or having a nervous breakdown, it's usually worth it to stay solo a bit longer.
On the other hand, if you are losing business, making your customers angry or getting in trouble with required reporting, you need a solution.
2. What will it take to turn things around?
Many entrepreneurs mistakenly believe that to get some help, they have to hire a full time employee and catapult themselves into a much more complicated business; they don't recognise the option and value of bringing on help in small increments.
You may need a four hour a week personal assistant who can get your desk organised, pay the bills and send out the invoices. Or, you may need to outsource your webwork to a specialty group so you can concentrate on the core aspects of your business (Elance is one such service which allows you to easily find companies or individuals to outsource work to, with the ability to read feedback comments of providers).
Of course, each of these solutions creates a cost. Will the benefit outweigh the cost? Go ahead and do a real analysis. Quantify the expense and compare it to the alternative, i.e., the status quo. If getting the invoices out and paying the bills on time increases cash flow and eliminates late charges, the answer might be very easy. If, however, the math is not so straightforward, think about how you would use the time that is freed up. Would you market your business more aggressively or take some downtime to spend with family?
Only you can weigh the value of those choices for your business.
3. Which part of your work should you hand off?
It makes sense to hand off jobs that you are not good at so they take you more time than they would take someone better trained or skilled, jobs that you don't like so they don't get done such as keeping the books in order or jobs that keep you from running the most important aspects of your business, e.g., VAT paperwork is certabily important to keep in order but unless someone with your savvy is selecting and marketin gthe products, there's no VAT to worry about.
One of the biggest mistakes people make when bringing on additional help is to hand over both the job and the responsibility for oversight. For example, it's perfectly reasonable to bring in assistance to write copy for your on-line products if that's something you don't particularly enjoy or have skills for. However, even though you are no longer doing the job, you must still be responsible for managing the quality and timeliness of the work.
Making the decision to add resources to your business does make management more complicated, but if delegation or oursourcing frees you to do a better job managing, you will see the results in a stronger bottom line.