Have you ever walked by someone’s desk and seen that they were using Excel and thought, “Oh they must be pretty good at computers,” and later found out that they were using it as a table editor? This is one of the most common “afflictions” in the modern office, the belief that because someone is using Excel that they actually know how to use Excel.

There are many businesses that use technology to simplify their work. QuickBooks is a great example of a tool that most small business use. When you ask the owner of that business, they will tell you that it is what they use to do the accounting, pay bills and maybe get paid.

That isn’t all QuickBooks does!

QuickBooks has a host of features and capabilities that allow business owners to manage their business better. It generates reports by customer, day, week month that show you who is your best customer, who pays on time and who you should really get rid of right away. It can also be extended to do inventory management with Bar Coding add-ons that will let you simply scan your inventory. “But we print checks with it.” Yes, yes you do.

Like in the opening paragraph on Excel, there are many people who simply use Excel to edit tables. Maybe they don’t use QuickBooks and have an invoice template in Excel and use that, but don’t track any information about the invoice. They simply print a copy and keep it in a file drawer.

The lack of technology use/knowledge costs your business anywhere from 10% (you are doing well) to 50%! Yes, 50% waste when your people don’t know how to use the tools you have provided them. Imagine being able to run your business with 50% fewer people. It is easier to “see” that with direct cost with say field personnel, but office staff is equally capable of chewing through your profits.

OK, so you get it, you need to make sure your people are trained to use the tools you provided for them, but what if you don’t know how to use them? What now? There are dozens of on-line classes and certification programs that can do it for you.

Henry Ford was sued by investors at one point because they thought he was a scam artist. They insisted that with his lack of education there was no way Ford could know all that he knew about business and the process of building cars.

During the trial, he was asked a question about a particular subject that he could not answer. When the lawyer saw that, he started to use that as proof that Ford was scamming people. In response, Ford simply turned and looked at the Judge. “Judge,” he started to say, “in my office I have a desk with a row of buttons. By pressing a button, I call up to my office an expert on any one of dozens of subjects that I want to learn more about. Calling on an expert, doesn’t that mean I am smarter than most?” The Judge agreed and the case was dismissed.

The point is that you don’t have to be the expert in every tool, just know who to call when you need some advice. You need to make sure your team knows how to use the tools you provide, and it is a good idea to test them from time to time to make sure they are not “faking” it!

Want to learn if your team is tech savvy? Just contact us, rick@gramatges.com

Humans love stories! We love to imagine what happened to get us “here” and where we are going next and to convey those thoughts through story. We don’t have to tell them to someone else, we may just think them and repeat them to ourselves. The more we tell ourselves a story, the more we believe it and when we believe our stories, they become fact!

I am sure you remember in school where they told you that with 2 points on a graph, you can draw a straight line.  People like to draw lines in their stories.  If you only give people 1 point, they will make up a 2^nd one to create a line they like. That line becomes a story and in time, the story becomes “fact.”

Managing your company means that you must become a storyteller, because if you don’t the employees will make the story up! And, as you saw above, if the story gets told enough times, it becomes “fact.” You might think, “well that does no matter because if I need to I can tell them a different story about what is happening.” What if I told you that it takes 3 times the amount of energy to change someone’s mind than it does to plant an original idea?

The effort to change an opinion is the same that an invading army needs to conquer a city. You will hear that an invading army requires 3 times the number of soldiers as an army defending a city. Like a city, opinions must be defended! It takes 3 times the energy to change an opinion believed to be based on “facts” than to provide the real information and set a more favorable opinion.

Why is this story telling so important to your business? Because if you don’t share with the team what is going on, they will come up with a story to match the “facts” they believe It does not make a difference if the “facts” are real or imagined, the team will believe them, and it will take you 3 times the effort to change their minds.

Now you might think, “Well, who cares what story they make up, it does not make a difference.”  People like drama so they will create a dramatic story. Usually, there is a villain in a dramatic story and the “boss” is usually the villain in the employee’s story. Another favorite is that the employees, along with the boss, are victims of the Market or other outside forces.

The story people make up based on what they observe is usually a lot worse than reality. That story, as I said above, will get told around and people will identify random “facts” that match the story and strengthen the story. What is worse, the story will now become the teams focus, not the work in front of them.

Imagine a scenario where you as the owner decide to take a day off, but don’t tell anyone. You just don’t show up. Now the office staff does not know that you are just out fishing or having fun with your kids, so they start to think the worse. “Maybe she was in a car accident?!” and they proceed to spend the rest of the day commenting about your absence and not focusing on their work. Sure, they could call you and find out, but that would make sense and remove the “drama,” who wants that?!

How do you counter all of this? You share! You don’t need to tell people all the details of your life, but you need to share what is happening, the good and the bad. Why things are happening in the office and what you and they can do about it. Lead the team by telling them the story that makes them focus on what is best for them and the business. Share the financials and why it is so important to call the customer and ask for their late payment. The more you share with them, withing reason, the more they will feel part of the decision-making process and the less time they will have to make up stories. Create the “drama” yourself and make sure the team are the heroes!

Don’t know if you are telling the best possible story? Just reach out and let’s talk – rick@gramatges.com

I once took over a role where my predecessor had a reputation for being consistently inconsistent. “We never knew what kind of day we were going to have until they said Good Morning. Based on the tone we knew what was coming and it could be great, but if there was a fight at home the night before, it was going to be bad!”

Having heard that, I immediately knew that most of the employee’s time was spent reading the managers/executives mood. You spend an enormous amount of time figuring out if it is a “good” time to bring up an issue. That time is not beneficial to the business, it does not add to the productivity, it robs from it!

If you ever saw the movie “The Emperor’s New Groove” there is a scene where the characters are in a restaurant and the orders keep coming in while the cook tries to keep up. Then, the orders start changing and the cook gets fed up and leaves. That scene gets played out a lot in companies. The owner/boss is constantly changing the rules, the goal post, the vision and the team can’t keep up.

Some say the best way to keep consistency in the workplace is by establishing a set of values for the company. “This is what we stand for and this is why!” is a good place to start. Most of us don’t realize it, but successful families are based on a shared set of values and standards. They are usually established by the “family” elders, maybe it is a Grandmother of Grandfather that everyone looks up to and for good reason because if you did not do it their way there would be trouble.

I am not suggesting that the owner of a company be looked at as the “elder” of the family with rules that you don’t break or else, but simply that if there are a consistent set of rules, most people are happier. Maybe some of those rules make some people uncomfortable, but they all know how to operate within the framework of those rules and overall the rules are good for everyone.

Values will lead to a vision of what the company, its products or services should be and how each member of the team should contribute. In many cases, it eliminates the doubts of who does what or finger pointing when things don’t get done. That alone would eliminate 30% of the waste that a company sees on a daily basis.

In racing, you hear that “smooth is fast” because you don’t lose time or energy on unnecessary things. Making the work environment as “smooth” as possible works in the same way.

So, do you keep a consistent work environment? Do you as the owner/manager get up every day and make sure that your personal state of mind does not affect your team and your company?

If you want to discuss how to make sure you have a workplace that keeps it consistent, reach out – rick@gramatges.com

Have you ever thought that if you walked away from your business, it would fall apart? Why? What is so incredibly important about you that removing you from the business even for a short while would mean it does not function?

Many Small to Medium Business (SMB) owners feel that without them the business would crumble. They are convinced that no one could do it the way they do it, and they are the key employee. Truth is no one could do “it” like they could, but in many cases that is a good thing. And, more importantly, if you are the only one then you are a prisoner of your own success.

Business growth requires someone to look at the Market and the Business from a different perspective. The founder is usually the one that drives change by setting a new direction for the team, or maybe even for the overall business. Think about adding a drive through at a fast-food restaurant, who came up with that idea? Could they have done it if they were the ones in the Kitchen cooking all the time?

Companies need many elements to succeed and grow, but that cannot come at the total sacrifice of the founder. The founder must be allowed to look for new opportunities within the existing business or figure out a new business that will take over for the old. Unfortunately, too many founders stick around and make the business “work,” and they are oftentimes the worse person to do that because their skill is not in “turning the crank” it is in inventing a new way to crank the business up.

To become the owner of a business that pays you back, you must release the business from your grip and let others run it. Many would say that this is very difficult, and it is, but if it is not done the business becomes a prison and, in many ways, gets chocked by the founder’s time limits.

One answer to that problem is to pass the business along to the next generation. However, most businesses that are handed over to the next generation fail because the business is not prepared for someone else’s management of them. Just because they are the founder’s children does not mean they have the same passion for the work or think the same way.

It is the duty of a responsible founder to figure out how to make the business run without them. This may mean sitting down and writing out all the procedures required. I know of many business coaches that do this very thing with their clients. They sit with them for several days and document everything that is done. It is brutal, but very effective! It gets it all done in one shot and then you can move on from there. What is written down is not usually pretty, but it will work. What is also true is that it becomes the foundation for the team to refine and possible re-write.

If the founder cannot or will not, take the time to write it all down, an alternative is to bring on a professional management team that will learn the business from the founder and create that documentation and structure. This is difficult as well and can take more time than just writing it down, but it can also lead to incredible strengths in the business as there will be more than one person involved in getting things done. Key to all of this is that the founder must not forget that the purpose of bringing in the “professionals” is to create the structure for the business to run without the presence of the founder. The person or persons brought into the business are not assistants to the founder. They are there to manage the business and should be given authority to do what it takes to get the job done.

Once you have done all the writing or hiring of the “right” person/people, how do you know if it worked? Leave! Not permanently but leave on an extended vacation. Make it 30 days without little contact. The likelihood of the business going under in that time is fairly low and the experience for everyone involved will be extra ordinary. Leave emergency contact information just in case but be sure to define what an emergency is!

Want to give it a try?  Want to learn the steps? It is simple, just e-mail me at rick@gramatges.com and we can set up a time to talk about how to write it all down and walk away.

I recently sat through an orientation for a company that has taken the “temp agency” model and moved it into the mobile app world. I had seen a few openings at the company and thought to myself, “what better way to learn about how they work than to become one of their users/temp workers and see where all the growth was coming from?”

The room was mostly empty with a few chairs, a person behind a desk checking IDs and registering people and one TV. That was it! You sat in the room and used your smart phone to fill out the paperwork. There were 5 people total in the room, including me, and we went about doing our “paperwork” on our phones. The TV was used for a short presentation on the app and some of the information in the employee handbook.

Whenever you put people in a room, they start to talk and so a conversation started, mostly between the person behind the desk and the individuals in this case. The questions about “how did you hear about us” and “what will you do,” all made sense, but the answers were far more revealing.

“I have a full-time job, but I want more freedom, so I thought this way of working would be better for me. I could also use it to make extra money.”

“I moved here from Indiana and am a student, so this type of work will be better for me because of my schedule.”

After hearing those, I asked a few questions to understand if this type of work was something to get someone through a particular period in their life or if it would become the norm.  The answers were the same, this is the way it is going to work. Yes, it is a very small sample size, so not a very scientific study, but valuable just the same.

The generation of workers that are getting prepared for the “rest of their lives” have a different mindset with respect to employment. They are living their lives on their terms and adapting the work life to match that. They are more interested in renting than buying a home and don’t want to be held down by a single job.  The “gig” economy as it is called is starting to mold the overall work culture.

The worker, powered by their smart phone, can pick and choose where they will work and how they will earn income. The provider of the app becomes their employer, but they are not supplying the work, they simply supply the opportunity for work, a go-between of sorts. This company is in a few cities today and expanding into more and more metro areas. In time, they will be ubiquitous and many more like them will appear to fill niches of specialized professionals, think construction, restaurant staff, etc.

This sounds great for the employee, but what about the employer? How do you change your business practices so that you can make full use of this new type of worker? Those are the key questions that business owners will have to explore in the next 20 to 30 years as this current generation of workers becomes the model for the next generation. You have time to figure it out, but don’t think you will not be affected!

The worldwide pandemic has shifter our perceptions of value and work life balance. Where the Baby Boomers and Gen-X crowds held to standards based on the post WWII world, the creation of the internet and a connected society has created an entirely different population. As long as they can get the latest handheld computer, disguised as a phone, and reliable internet access – don’t think WiFi, think 5G – they are set. Watching a big screen TV is not what they like to do, they sit at the dinner table binge watching whatever the latest show is and then clean their plates while the phone is propped up in front of them.

I know because that is what happens in my home and I was the one that built the phone stands so that phones did not end up in the sink!

The traditional job post and belief that you will have an employee for a lifetime have to be questioned. Or maybe, the real question is, what do we need to do so that the up-and-coming generation of worker feels like they are in control. Is it remote work opportunities? Is it more a model of “part time” work with flexible schedule and the worker decides when they work? If you have to fill a shift, maybe you have to make the pay variable, so you pay more for the times when people don’t usually want to work, and the workers bid for the opportunity?

There is a lot to think about and best to start now and be prepared than go out of business because you could not find employees to staff a shift.

Does money motivate you or are you more driven by a need to see your ideas come to life? A lot of entrepreneurs will tell you that they do what they do not for the money, but because they feel that what they are attempting will help people.  Some will say that they are driven by wanting to see their ideas to come life. Others might say that the only way they could get a job was by building their own company because they could never keep a “regular” job. And some, yes, they will say it is about building something that they can then sell.

How about your sales team? What motivates them?

Compensation plans and structures are one of the most misunderstood parts of a business. The concept of “overpaying” a salesperson because they sold a lot is a common uncomfortable situation for many owners. Why? Well, you usually hear, “Why should I pay that person more than I make?” or, “If I pay them that much, I won’t make money!”

Both statements come from a place of not knowing if your business is making money. The first step in these cases must be to produce and review a reliable set of financials. Does your company make money? Does it produce returns on your investment? Only way to know is to have monthly financial statements.

In the book, “Simple Numbers, Straight Talk, Big Profits!: 4 Keys to Unlock Your Business Potential,” Greg Crabtree and Beverly Blair Harzog provide a clear and simple to understand definition of the money making jargon – profits, margins, EBIDTA, etc. They also provide a set of good “rules of thumb” to follow in your business. For example, as an owner, you should get paid as an employee based on the role you take on in the business. Maybe you are the CEO of the company, well you should get paid as the CEO. What most people do, however, is simply pay themselves whatever is left over at the end of the month. That is usually taking cash that might be needed for funding next week’s operations, not a good situation.

Paying yourself as an employee makes it impossible to figure out if your business could make money without you. How much profit do you make after paying the CEO and is that enough money for the owner to live comfortably?

A business that understands its costs, both Direct and Indirect, its Administrative Overhead costs and Sales costs can quickly determine if it is making money. It is a simple concept, you should charge your customers more to deliver a product or service than what it costs you to produce or deliver that product or service. Whatever is left over is then the profit for the business and potentially the big payout to the owner.

For the purposes of this post, let’s just say that you have a clear understanding of your business’s numbers. You know your Price, your Direct and Indirect costs, and so you know your Margins. You know your overhead, so subtracting that from your Margins you now know what your profit will be and so you have a good feel for what should be left in the bank at the end of each month. In a later post, we will explain what all these terms mean and how they are related.

So, how do you pay your sales team? Sale’s function is to find customers, convince the customer to buy your products or services and set a price for said sale. The salesperson will likely need to negotiate a bit on price, so they should know how much Margin is left over based on what they are selling. Notice I said Margin and not Profit, that is because at the end of the day the overhead costs is something the Sales person cannot and should not control. You as the owner should set a range for the Margin and tell the salesperson something like, “I would like you to sell at this price because it gets us a Margin of 40%, but you can lower the price down to this and we get a Margin of 32%.” That is about all you need at that point because the salesperson/team now has enough information to negotiate a sale, but how will you motivate them to sell at a higher price.

The variable compensation part of Sales says that the higher the Margin the higher the commission on the sale. For this example, you as the owner know that at 28% Margin you are breaking even. Your overhead cost, which includes your own salary is covered, but there is no profit to give to the owner. At 30% Margin, there is profit and so the Salesperson could get some of that profit. After all, you as the owner are getting paid a salary as the CEO so your personal compensation is part of the overhead.

You don’t want to give all the profit away, so you decide that a Salesperson will only get a commission if they sell at 32% Margin. Their commission will be a percentage of that Margin, say 5% and as the Margin increases their percentage gets better. Maybe they make 10% if the Margin is at 40%. Now, that is 10% of the Margin, not 10% of the sales price so don’t think you are losing money. You are simply giving the sales team a more generous portion of the profit.

OK, ok, I know, there is a lot going on in this post. There are a lot of numbers and if you read one of my other posts, math is not usually the owner’s favorite subject. What should you do? Hire someone to work out what your compensation plan should look like. There are hundreds of case studies and consultants out there that just do compensation plans. They are structured to give the sales team the feeling that they are in control of their own pay, “the higher price I get the more in my pocket.” And if you still feel that a Salesperson should not make more than the owner, you are not considering that as the business grows the value of that business increases. That means that as the owner, your overall return on investment has gotten better.

Want to learn more or maybe have someone look over your numbers and tell you if you are making money and how to pay people? Just send us an email at rick@gramatges.com and we can set up a time to make it all happen.

Perspective is a great tool; it lets us see things that would normally be hidden. If you have ever used Google Maps to figure out where you are you know what I mean. A bird’s eye view of your location and surroundings help you figure out where you are, and it can help you quickly move to where you want to go.

Coaches do the same thing; they give us perspective on a situation or actions. Think about a coach in baseball, they look at all the players and make adjustments to the team roster to get the most out of the individual players given an opposing teams roster. Now think about a batting coach. They are not as active during a game, but they work behind the scenes to improve a player’s swing and point out things that may not be obvious.

Golf pros use coaches all the time. Maybe a player’s swing is not as effective as it once was, so why not ask someone to look at it and give suggestions. Coaching as a function in sports is something that many people are familiar with and consider common. Coaches in business are not as well-known and many might think they are a scam.

Coaching in business is an underused service that many companies don’t engage. We have heard of business consultants, but coaches are less often used. So, what is the difference?

Business Consulting takes on the role of looking at a process or team within a business and provides a view into how to improve what is happening. Maybe there is a process that bogs down or simply does not deliver the quality expected. A business analyst and consultant would take the time to analyze the process and how the team or individuals is following that process and come up with recommendations. Like the coach on a Baseball team, the Consultant is looking at the overall business and can put a plan together on how to set up the company to deal with the Market or the Competition.

Business Coaching is a more focused on the individual. Coaches spend the time to sit with a leader of the business and work on that leader’s skills. Sometimes the effort spills over into a business process, for example prices are not where they need to be, and the owner or manager needs help getting them right. A business coach would work with the leader to figure out why the leader isn’t able to get the prices to where they need to be and comes up with a plan for that leader. In some cases the coach would create the pricing plan and offer it to the owner/leader to start them down a path, but the majority of the effort is on the individual.

This is more like the Golf Coach that spends the time to watch the player during a game and puts together an action plan an exercise. “Your stans when you drive is off, your right foot should come up more,” as possible example.” “Your communication with your direct reports is fragmented and they don’t all get the same message, you should have a weekly meeting with all of them together to get everyone on the same page,” as one way a Coach can guide a business owner/leader.

Coaches can also assist with individual accountability. You may have seen the quotes that say that what you are most avoiding is the thing you should be doing the most. Well, a Coach would work with the person dealing with the avoidance and hold them accountable to getting the work done. Most business leaders can “hide” behind a multitude of tasks and look very busy, but did those tasks improved the business? “When are you going to post the Job Ad for the new bookkeeper so that you are no longer doing the books at night?” is a typical conversation.

Does Business Coaching work? Yes, yes it does. It can help a business leader accelerate change and master skills that otherwise would not be taken care of because of “busy” work. Is it a substitution for Business Consulting? No, it is not. Coaching and Consulting can be seen as complimentary and often times one company or person can act as both Coach and Consultant. There are cautions to be taken, however, when the Coach and the Consultant do not agree on where the business is going and what the leader’s role should be moving forward.

Think you might benefit from Business Coaching or Consulting? Please contact us at rick@gramatges.com and let us know what you think is going on with you or your business. Maybe the best solution could be found in a 30-minute phone conversation or maybe it is time to dig deeper.

What if I told you that working on your “faults” or things you are not good at will only get you to a point of being average? Working on the things you are not good at will only get you to “good enough” and that is just to keep up.

Think about playing tennis. Most people are not very good at it, so they work at being able to serve and mostly get a volley going. They may take classes and study with a pro for a short period of time, but what they achieve is the ability to play a game with a friend.

World ranked players practice each and every day, for month and years. They hire coaches, many of them, to focus on specific areas of their serve, their swing, their stance, everything. This is not an exaggeration. You may have heard of the 10,000 hours to become an expert, but that is not accurate. It can take much more time to reach the level of playing pro.

What does playing tennis have to do with your business? Here is an example, financials. Most people are terrible at financials. They try and try but the math is hard, and the numbers don’t make sense. Maybe you are the exception, but most business owners that I talk to have a hard time understanding what the numbers mean. Yes, higher revenue is good, but only if the margins can support your business. If not, higher revenue means greater losses, but how is this possible? The size of your organization and the make-up of the people within it drive efficiency. Bigger isn’t always better! Doesn’t really make sense does it, but it is true and it is all there in your numbers.

If you are not good at numbers, should you be your own accountant? Most would say no way, I have a CPA do my taxes. OK, but what about bookkeeping? Do you do it or does someone in your family? Are they a trained bookkeeper with a certificate? If not, how do you know they are doing it right? Are they fast or are they doing it at night, after hours? So, what happens if you double the business, will your bookkeeper keep up?

Now let’s talk about the business owner. What are they good at and what are they not so good at? Would it make sense for them to focus on their “not so good” and get to average, or should they go the route of making what they are really good at their focus and become great?

Just like a “regular” person would have to train countless hours to become “average” at tennis. Someone who is gifted with the athletic skill of a tennis player would still have to work to countless hours, but at the end they would be “world class.” To be “world class” at business, the owner of a business should focus on what they are good at in the business.  Honing these skills to the point where the whole world will recognize them as the “best.” That is when sales will no longer be an issue. Charging higher prices because the customer is working with the “best” would not be a problem. Sure, you still need someone to do the books, but now that you are making more money it isn’t as bad to hire a top-notch bookkeeper.

How do you know what your gift is, how do you know what to focus on? Just ask those that know you, and they will likely tell you right away, “Oh you are a great Builder, but your invoices are all over the place!” Not too sure your friends can tell? If you need an expert opinion, reach out to us at rick@gramatges.com and we can set up some time to do a skills assessment/inventory and work out what makes the most sense.

You know how it feels when you are at a party and the host starts to clean up. It is a subtle message that the party is over and it is time to leave. Sometimes we don’t get the hint and either the host starts to show people the door, or they decide to just hold on and see how late the last guest will stay.

How long have you had your business? How long do you want to continue working the way you have been working? Do you have someone to take it over, a child, a spouse? You don’t want to just walk out and let your business end, do you? Is the party over for you, but the other people are still having fun?

We often times hold on to things way longer than we should. Just look at any of the “reality” TV shows where they help hoarders out or the rare “barn find” you always hear about. Most of the time that person who owns the property or item held on to it for a long time and now that they are motivated to get rid of it, they can’t really enjoy the benefits of the sale.

Time is the same for everyone. It will not stop, it will not slow, so what you decide to do with your time is very important. You should do an audit of your time and look through what it is you enjoy doing and ask if owning the business is something you truly enjoy. Maybe you still want to have a space there, but don’t want to deal with all the stress of being the owner and manager. In that case maybe you could set up a partnership or sell the majority of the interest in the business and just hold on to enough so that you have something to do.

Another option is to set up a professional management team that does the “hard” work while you enjoy those parts of the business that got you started in the first place. I have seen many businesses grow beyond what the founder intended because they decided it was time to step out of the day to day management and just stayed tinkering.

What if what you enjoyed the most out of your business was building it up? Maybe that is what you like doing and let’s face it there are plenty of serial entrepreneurs that do just that. They may be at a different scale than you, but they in essence go out, build a company, run it for a while and then sell it. They then take that money and start a new one.

How do you figure out that it is time to leave? Like I said above, you do an inventory of what it is you like and don’t like about the business. Maybe there are things you are not doing that your staff is always complaining about, that someone should do. If those are piling up, then it may be a good time to go.

This is not an easy process. This is not something you do at breakfast one day on the back of a napkin. This requires work and effort to really understand what you are contemplating doing.

If you are having thoughts about selling your business and don’t know how, or maybe how to set up a professional management team to take over, please drop us a line at rick@gramatges.com. We can work through a plan of detailing what you love, hate and are OK with in your business and maybe find that it is time to walk away.

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