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The Delegators

Wednesday, July 01, 2009

NASE Members Find That They Can’t Do It All
By Jan Norman

Many people start their micro-businesses doing every chore themselves—from sales to emptying the wastebasket. Eventually wearing all the hats not only weighs heavily on the owner, but slows business growth as well.

There are only so many hours in the day and so much energy that solo operators can spend in their businesses. If they want to grow the enterprise—while keeping their health and sanity—they need to let go and pay someone to handle certain parts of the business.

You are, no doubt, thinking of all the reasons you can’t hand off tasks in your micro-business: You can’t afford employees in this bad economy. You don’t know how to hire and manage people. You can’t find qualified help. No one can do the work as well as you can.

“But take a look at the opportunity cost of that decision,” says Leila Mozaffari, director of the Orange County Small Business Development Center in California. “What business development activity do you not get around to because you are busy doing bookkeeping, for example?”

In other words, while you’re saving $20 an hour on a bookkeeper, you aren’t out cultivating work from customers that would pay $100 an hour.

Here’s the measure: If you make more money using your time to provide products and services than you can save by doing a task yourself, pay someone else to do that task.

Then, as hard as it seems in a bad economy, focus all your time and energy bringing in the paying customers.

Economic Reality
NASE Member Kyndra Miller, owner of the Los Angeles law firm Miller Entertainment Group Inc., certainly knows the value of an office assistant. For four years, Miller had an administrative assistant who handled general office work. But then the economy slowed. Miller had to let her assistant go in late 2008.

“I know the call is out for small business to boost the economy, but I have to be sure I can eat,” she explains.

However, she has implemented a plan that should enable her to hire at least some part-time help. In difficult financial times, a micro-business owner might need to cut back on valued help. But like Miller, owners should retain the growth mindset that establishes a plan to restore assistance as soon as possible.

“Having an assistant was so nice; it allowed me to focus on generating business for the firm,” Miller says. “However, doing the administrative work myself is a good reminder for me about having reasonable expectations of my support staff. I think I’ll be a better boss because I know how to do their job so I’ll be sensitive to their problems.”

Delegation Dilemma
“Most small-business owners do tend to have difficulty with delegating work to others,” Mozaffari says. “They start out when they do not have anyone but themselves working the business, and then have a tough time letting go. This is partly because, by nature, they are self-reliant, and partly because they want to conserve their cash.”

NASE Member Tim Thomas says he’s doing almost all the work in his company right now because of the economy. He owns Thomas Disaster Services in Surf City, N.C. The company demolishes buildings
and hauls away debris after refurbishing projects or disasters such as hurricanes.

The one task Thomas wishes he could hand off to an employee or independent contractor is keeping up with all the government regulations on all types of trucking businesses.

“It’s so hard for small businesses to make it with the government, local to federal, always asking us to pay more taxes, do more paperwork and know more regulations,” he says. “It’s tough enough to get work and get the work done.”

NASE Member Jonathan Jager, owner of The Designing Eye in South Bloomingville, Ohio, is also doing almost all the work in his business with the help of his wife. The firm designs and builds educational exhibits for museums and parks. Unfortunately, contracts for his work have virtually dried up in the past year because of economic constraints on the agencies that run such facilities.

If he could afford it, “I’d get someone else to do sales. I’m not the best salesperson in the world, but until recently all my work was repeat business and word of mouth.”

Extra Hands
When business slows down, it’s difficult to assess whether hiring a salesperson would bring in enough extra revenue to pay the salary in addition to business overhead. Some firms pay their salespeople primarily or completely on commission. Such jobs may be difficult to fill during strong economic times, but may attract eager applicants during a recession.

Hiring extra hands will not necessarily add to your revenues. But they might not cost you a bundle either. One source of lower-priced help for certain business tasks is college students, say NASE Members Charlene and Andrew Parlett, owners of Southeast Auto Service LLC in Hinesville, Ga.

“We trained a college student to do all of our daily bookkeeping, filing and general office work. She works 30 hours a week,” Charlene Parlett says. She adds that there’s a big benefit to turning loose of some of the office work: relief of the stress naturally associated with owning a micro-business.

Like the Parletts, the other three NASE Members also turn to outside help for certain types of work. They may not be able to afford an employee for the task they dislike most, but they know their limits.
Miller uses as independent contractors some women attorneys who want the flexibility to stay at home with their children. Thomas depends on laborers when he has demolition contracts. Jager hires experts as subcontractors when he has large projects and short deadlines.

“We also use a certified public accountant to make sure we are on track with [the financial part of] our business plan,” Jager says. “There are a lot of technical things we don’t feel that we can do, and it only costs a couple hundred dollars a year.”

Specialized Tasks
Many micro-business owners turn to accountants or specially trained tax preparers to do their federal, state and sales tax returns. Some use attorneys to draw up contracts and other legally binding agreements. Many hire technology specialists to repair computers.

They may not want to relinquish those controls, but most owners know flawed work in these specialized areas carries penalties and potential costs that far exceed the price of the expert.

What’s harder to discern is the hidden costs of trying to do all the administrative work, marketing and customer service themselves.

For example, many micro-business owners drop their marketing and advertising contractors when finances get tight, yet don’t have time and expertise to do that work themselves. In some cases, revenues decline even more because their products and services aren’t in front of potential customers as frequently as before.
Still, certain management tasks are more difficult to delegate.

Auto maintenance owner Andrew Parlett, for example, does quality control on all of the auto repair and maintenance in their shop.

“Quality control takes a great deal of time,” Charlene Parlett says. “Andrew’s level of expertise is actually one of the major problems in handing it off to someone else. It is difficult to find someone who is capable of overseeing the other employees’ work, and would require paying them extra for the time they are not directly producing while they are checking quality control.”

Lack of help in such specialized, yet vital, tasks keeps the owner chained to the business. Many micro-business owners complain they can’t even take a vacation.

However, management experts insist that a systematic training program involving every employee can, over time, develop a series of internal experts who can check each other’s work without increasing payroll significantly. When quality is part of the company’s core values and culture, it becomes part of everyone’s job description and second nature in the course of every day labor.

Yet some micro-business owners stay glued to critical tasks that they detest. Attorney Miller, for example, feels compelled to do her own financial record keeping.

“I keep a stranglehold on it, even though I hate it. It’s engrained in me, based on life experience watching too many people who didn’t know where their money was going or coming from and getting into bad situations because of that. Plus, I’m secretive. I don’t like anyone else knowing my business.”

Miller recognizes that hanging onto that work takes time away from client services and marketing, but still is unwilling to relinquish it.

Business adviser Mozaffari often recommends that her micro-business clients consider using technology to automate the mundane tasks they choose to handle themselves. It’s like having employees, but at a lower cost.

Financial record keeping especially lends itself to such help. Software such as Intuit’s QuickBooks has become increasingly consumer friendly. It can be adapted to specific types of business to handle record keeping and bill paying.

Such automation not only makes the task easier, it also frees up a business owner’s time.

And just imagine. Instead of spending precious time on bookkeeping or other loathsome administrative tasks, you could be using those hours meeting potential clients, generating sales and building a stronger micro-business.

Freelance writer Jan Norman is more than happy to turn over her tax and legal work to experts. Read her blog at http://ocregister.com/jan.


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