Feb
22

Make Your Business Work for You

Most business owners get into business for two reasons – to gain financial and personal freedom. Yet small business owners for the most part turn out to be a 24X7 employee of their own business. The reason is that most businesses don’t work but the owners do. That is indeed quite an irony.  Here are some simple tips on making the business work for the owner and not the other way around.

  • Do what you like doing the best and delegate the rest. Put simply, delegate any tasks that can be performed by a person earning less than your desired hourly rate.
    • Many small business owners do not know how to adequately value their time.  This is especially true if the task is not directly related to paid work, i.e. can be invoiced to a customer.  It is often difficult to decide to pay money out of your pocket, rather than do the task yourself.  Unfortunately, deciding to do these tasks means that you put off doing tasks that require your skills and cannot be delegated.
    • Determine your hourly rate by deciding on how much money you want to make next year.  Divide this by 2,000 and this is your hourly rate.  As an example, in the beginning when he was very cash-strapped one client decides to out-source if he could get the task done for half his personal hourly rate.  This allowed him more time to focus on the core parts of his business that he enjoyed.
  • Systematize the core processes of the business, which means documenting all the steps and establish intended outcome of each tasks.
    • The next step in the process is to define the key performance indicators (KPI) for each category of activity and establishing benchmarks for each.
    • Having determined the activities to be delegated and defining the steps in each, the next step is to find the person to whom the tasks will be delegated. Make sure the person is capable of adequately performing the duties.
    • Communicate what is expected of those being hired – the Do’s and Don’ts. Reach agreement on the yardstick that will be used to measure their performance.  Conduct periodic review and provide feedback.
    • Finally, put everything in writing and have them signed by both parties so it becomes a commitment.