5 Reasons Small Business Let Their Support Areas Slide
I spend most of my time working with and talking with small business owners … after all, it is my passion. One thing that never ceases to amaze me is the lack of time and money small business owners invest in their support areas.
What do I mean by “support areas” – things like financial management, IT management, planning and forecasting and human resource management. These are all critical parts of every business however are mostly ignored until crisis requires engagement.
As a small business owner, how many of the following can you say yes to:
- I tend to ignore unsatisfactory performance of staff until it is at a point where it can’t be ignored anymore.
- I generally recruit staff when I really really really need them for a particular job and not before.
- I generally make staffing choices in rushed and stressed situations.
- I generally engage IT, Accounting and other support services providers based on price.
- I rarely take time to plan and undertake forward thinking in relation to my business and its support services.
- I don’t have a business plan.
- I don’t have a cashflow or budget.
- I don’t have an IT plan.
- I really only know the bare minimum in relation to laws around staff.
- I avoid having to use an accountant or solicitor unless I absolutely have to.
- I have experienced significant interruption to my business due to something going wrong in relation to one of my support areas (eg, issues with Tax & BAS, major cashflow issues, major staff issue, major IT issue, major legal issue).
I am hoping as a business owner you don’t have any ticks above. However, in reality I know most will.
So, at the recent meeting of the Albany Creek Business Contacts (ACBC), which is a networking group of local small businesses who get together to support and help each other through referrals, I asked the question – “why do small business owners neglect their support services”. The answers fell into five responses:
- Poor time Management – too much time working on the tools that there isn’t time to work on the business.
- Focus is on Money making activities – the inference here was that the support services do not “make money” from a billable perspective and therefore were not the focus.
- Lack of knowledge – many small business owners are very good in relation to the product or service of the business however do not invest in learning how to run a business and the value add the support services provide.
- Previous bad experiences – it was suggested here that some small business owners have had previous bad experiences with providers of support services so once burned then never to return.
- Ain’t broke don’t do anything with it – the suggestion that if it isn’t broken or creating problems then nothing needs to be done.
The problem with this situation is that when issues do arise in the business it winds up costing many many times more in time, dollars and productivity to deal with the issue and/or fix it than if some investment had been made along the way.
- rule of thumb it costs businesses 2 ½ times the salary of a position to replace the staff member;
- industry research suggests a business should be investing 2-3% of its net profit on its IT; and
- costs associated with needing to engage an accountant or solicitor to address specialist issues can be ten times plus the cost than had advice and assistance been obtained from the beginning and along the way.
If you want to discuss how to get started in building support for your business without breaking the bank, call me today (3264 4783) – I can help!