Many small companies feel they can’t afford to buy the tools they need for business, so they go for the “build it” approach. But is that wise?
If you are a carpenter or handyperson, you have drills and picks and other items with similar names to what you would find in a dentist office, but would you have your handyperson fill a cavity? Not likely, right!? So why would you ask your receptionist to do accounting/bookkeeping for you?
As the owner of a small business, have you been tempted to ask one of your office staff to take on additional work? Sure, why not, you are already paying them, so it makes sense that they just do some extra work, right? Like in the example above, there are many businesses where the office manager is the HR person and the bookkeeper and much more, but is that saving you money?
Most business owners would argue that it clearly does because one person gets paid much less than 3 and isn’t that a sound business decision? Well, it is if you can divide all that work into 1/3 of a person per week, but that is rarely the case.
Having someone working multiple jobs leads to lower productivity and increase in errors that can result in high frustration among the staff, increased overtime and turn-over. So, is it cheaper? NO!
Specialization allows a person to become 4 to 5 times more efficient than someone that is a generalist. In fact, there is a 20% loss when an individual has to change tasks from say answering the phone to looking up where their last deposit entry went. Having to pause and figure out where you left off is very demanding and exhausting.
What is the answer? Hire an outside company that does the work for you. Hire a bookkeeper that comes in once a week to get the books done or bring in an HR/Payroll company that records the time sheets and then inputs the data and gets people paid.
This issue is not just for small companies. Many large enterprises think they are saving money when they ask the IT developers to create a new tool for Sales to use when what they specialize in is running the applications that make the factory floor operate more efficiently. Will they do it? Yes. Will it work? Maybe.
It is important to learn what you are good at and to focus on that aspect of the business. It far more important to make sure your team is doing what they are best at and not asking them to take on things that they “can” do but are just not very good at it.
You cannot grow your business by saving money. All money spent on your company should be considered an investment and we should always look for the ROI. Have you done a cost benefit analysis on your admin staff?
If you need help figuring out what you are good at and maybe finding outside resources to take over some of the tasks so your staff can focus on the things that make you money, just drop us a line at rick@gramatges.com
Gramatges Consulting 