Whether you are an entrepreneur running your own business or an executive running a unit or a team: How much time are you investing in working “on” your business as compared to getting caught up in the day to day stuff? And, what is that costing you and your team ie. your opportunity cost?
The challenge that I find a lot of executives and entrepreneurs face today is that they get so busy working “in” their business that they fail to see the full potential of the business or new avenues it could go down. So many times I look at a business and think the owner is doing well, only to discover on talking to them, that they are working extended hours and (when their income is converted to an hourly rate) they’re not getting paid as some of their top employees. Some might say that this comes with position and responsibility. But, I would argue that they are taking on or handling tasks that they should be delegating or outsourcing.
Let me give you an example. A while ago, I had a client who owned a commercial cleaning business. When some of his team were off sick or on holiday, this client would spend part of the week doing the cleaning himself. When asked how much would it cost to employ a temporary worker to do the cleaning he was doing, he replied “ about £600 per week”. He was then asked how much extra business he could generate if he spent this same time in a week looking for new customers. He said he could generate about £5000 worth of new business in a week.
It’s obvious looking from an outsider’s perspective that the logical thing to do is for him to employ a cleaner to work in the business so that he can work on the business. The sort of work that I am talking about here is not just manual work it’s work that is outside your area of optimal focus.
Ask yourself, how much time are you spending doing work……filling in for someone, admin etc…..that you would be better suited if it was delegated or outsourced so that you could focus on driving the business forward?
This is what we talk about when we talk about opportunity cost. So, what are your opportunity costs? What value do you place on your time? How much extra business could you generate if you employed someone to do the day to day work?
What would it mean to your customers and your business if you were “freed up” to following up enquires that haven’t been chased up, socialising with customers encouraging them to come back or phoning existing customers to see if there is anything they require. The bottom line is you could be spending time on vital sales and marketing or operational issues, but you’re bogged down doing the day to day stuff, time consuming, admin or physical work that someone else could be doing.
How much time do you spend developing new marketing strategies, developing your people, analysing business reults, instigating relationships with other businesses and the host of other necessary activities that make the difference between a successful business and an average business.
There’s a whole heap of things that a business owner needs to get done in an average day. Successful business owners are those that do the things that are important in maximising profit rather than concentrating on the “urgent problems” that arise every day.
Ask for help, external if needs be, in areas that you aren’t an expert in that can leverage your time allowing you to focus on the “important” areas of your business rather than getting bogged down with the “urgent” ones that just keep coming up.
When we get involved in business, most of us do so with little or no assistance at all. Yet “a business” as an investment can and does, when well managed, outperform every other type of investment.
Take the challenge and look at your business as an investment and figure out what is the return on your invested capital and time and what would you like it to be.
Review what happened last year, analyse the results you achieved, see what adjustments you need to make to obtain the results you require, plan for going forward and look at what assistance you require to obtain the desired result from your team and from other sources.
Remember above all else, that time spent working on your business is far more important and valuable than time spent working in it.
Thanks to AZAdam for the photo.