Every small business starts with the labor of individual people, but as a business grows it becomes too much for the founders and more labor is needed. This is the classic scenario for hiring more workers, but that’s not the only way a business can be made more efficient. Let’s examine a few other labor multipliers that could be the key to help you reach the next level.
1. Time Management Software.
These days it’s hard to do business without the use of a computer. Programs like Microsoft Office or another office suite are essential for tracking spending and sending documents to clients. But adding in some time management software to the mix just might be the thing to discover where all the hours in the day go.
This can be a simple as learning how to leverage a business calendar in your email client to dedicated time tracking software. Just because you’re not punching a clock anymore as an employee doesn’t mean you can’t learn a thing or two about your work habits by tracking your time.
Proper time tracking often provides powerful knock-off benefits. The obvious benefit I experienced in my own business was that I could tell where I was wasting time, but I could also tell which clients were taking a disproportionate amount of my time. It helped me make educated decisions about which clients to nurture and which ones to fire. Done correctly, this increased my profitability by 45 percent and made the workday more enjoyable; and profitable.
The company car may sound like just a perk for executives, but using vehicles for business goes well beyond that. From making deliveries, traveling to meet clients, and even purchasing utility vehicles, some small businesses might need to make the decision to purchase or lease a vehicle.
Many people use their own vehicles to start, as thousands of ride-share workers have done. But the extra wear-and-tear on a personal vehicle might not justify the costs. Tax deductions for using personal vehicles for business use don’t kick in unless you can prove that you use your vehicle for business over 50 percent of the time.
That said, having a vehicle on hand for certain occasions can impress customers. A car accident lawyer keeps a wrecker as part of their vehicle fleet because he found that his clients love that extra touch of not having to worry about a tow. A wedding planner might invest in a limousine and offer chauffeur services to newlyweds to the venue.
I personally lease two different vehicles, for the tax write-off, but also to impress potential clients. I have tested out whether arriving at a meeting in a BMW versus a Toyota helps me win deals. It works more often than not. Possibly because it helps me be more confident, but also possibly because the appearance of success gives potential clients that same feeling.
With careful planning, you might be able to turn a vehicle investment into a positive revenue generator for your company, whether through tax deductions and saving cash on your personal vehicle or from using a vehicle to create a new service for your business.
3. Outsourced Employees
Many small business owners are moving away from employees and looking for freelancers to fill in labor gaps. A small business might not have the capital to hire a full-time or part-time employee along with all the overhead costs of having one. Hiring freelance contractors temporarily might be the necessary ingredient to push revenue up to the level needed to justify a full employee.
Freelancers are usually hired per-project or for a certain number of hours a week to fulfill a particular task. Business owners must be conversant in contracts and the differences between employees and freelancers to gain the most benefit from them and to keep away from legal trouble. The safest way for a small business to hire a freelancer is to go through job boards like UpWork and Freelancer, which have contracts, time tracking, and arbitration systems built in that can protect you from many problems.
One important note before hiring a freelancer is that they have much more flexibility than an employee. Freelancers can work for multiple clients and operate on their own schedules. Professional freelancers will let you know how long a project is estimated to take up front, but it’s a lot like hiring your mechanic. Don’t expect that they will be at your beck and call like an employee. In fact, treating them that way could land you a lot of trouble with the IRS.
When the job starts getting to be too much for one person and it’s time to remove inefficiencies and expand, these three tips just might be the thing you need to move to the next level. Try them out over the next year and by this time again you just might love where your business is.