Most businesses fail. Heck, you probably already know that. But the real issue is “why do most business fail?” While businesses fail for a variety of reasons, there is one dominant reason. Unfortunately, I can’t take credit for reason I am about to share with you. I have to give credit to Michael Gerber and his book “The E-Myth Revisited” for teaching me the reason most businesses fail.
He claims that most businesses fail because “the business owners work in the business rather than work on the business.” I couldn’t say it better myself.
If you are a small business owner, you are probably focusing on the wrong tasks! You are probably spending your $100 per hour time doing $10 per hour tasks! I hope that’s not the case, but it’s probably true. Most entrepreneurs simply focus on the wrong things. They’re so busy trying to do everything in their business that they don’t spend any time working on their business. I’ve been guilty of this myself in the past, too.
Tasks such as answering the phone, organizing the office, keeping the books, ordering inventory, and other similar tasks are important, but they shouldn’t consume a majority of the entrepreneur’s time. In fact, most of these tasks can and should be delegated immediately, or done during non-productive time. The sooner you delegate these things, the sooner you will have time to do your real job: growing your business, not running it.
The real job of an entrepreneur is to create revenue, make sales, generate leads, brainstorm marketing ideas, form strategic alliances, increase profits and grow the company. Simply put, they should be busy growing the company, not spending all their time running the company. Your Vice President, assistant, or # 2 person can do those other things. Or, you can have a small workforce of employees or independent contractors to do those tasks.
And if you’re a one person show like I am, learn how to outsource. You can hire an independent contractor virtual assistant at an inexpensive price to free up your time so you can focus on the most important things. And if you aren’t willing to do that, at least focus 80% of your time on the money producing activities, not the busy work!
If you’re struggling in your small business, or aren’t getting the results you desire, here’s what I recommend you do:
Step # 1: Evaluate How You Spend Your Time Right Now
The first thing you should do is evaluate how you are currently spending your time. For the next week, track your tasks every day. Write down what you do, when you do it and how long it takes. Don’t change anything in your schedule for the next week. At the end of the week, you will have a good idea of how you currently manage your time. This will be a real eye opener! You will probably discover that you waste a lot of time on urgent, but non-essential tasks. You might even discover that you do very little to market or promote your business.
Step # 2: Allocate At Least 80% of Your Time to Marketing, Customer Acquisition and Sales
Once you know how you are currently managing your time, you need to change things. I recommend that you spend at least 80% of your time on the following tasks: generating leads, acquiring new customers, increasing sales, following up, and looking for ways to make your business more profitable. All other tasks should be delegated to someone else or done during non-productive hours.
Step # 3: Delegate All Other Tasks
This goes hand-in-hand with the previous step. I suggest you learn how to delegate and outsource. Most small business owners struggle in this area. I suggest you hire an employee, or preferably an independent contractor to do most of the non-essential tasks. Although this will cost you some money right now, it will save you money in the long run and free up your time (your most precious asset) so you can work on the tasks identified in step # 2.
Step # 4: Set 1-2 Objectives for Each Day
I highly suggest you set 1-2 big objectives each day. Once again, these objectives should be focused in areas that actually grow your business! You don’t need a huge “to do” list every day, but you do need something to focus on. If you try to do too much, you won’t be very productive. Keep the main thing the main thing.
Step # 5: Track and Monitor Your Progress Daily
Every single day you need to track your progress. You need to compare your results for the day with the goals you set for yourself. You should also do this on a monthly, quarterly and yearly basis. If you find areas you are struggling in, find ways to improve. Try to get a little bit better at managing your time, and being productive, every single day.
Whether your business is a huge success, or is on the verge of shutting down, you can always improve! As the entrepreneur the buck stops with you. Ultimately, it’s your job to grow the company.
The quickest way to improve your small business is to learn the real role of the entrepreneur and then focus your time, energy and money working on your business rather than working in your business. Delegate all non-essential tasks to a team member, or do those tasks AFTER you have done the money producing activities. If you’re spending all your time sweeping the floors, answering the phone, ordering inventory, surfing YouTube or Facebook or any of the other activities required to run a business, you will be out of business in no time!
What are your thoughts? Leave a comment below to let me know what you think. I look forward to hearing from you.