SunTrust Business Owner Research finds that “leveraging yourself” is the most critical issue business owners face. Consider the following reasons entrepreneurs struggle with creating leverage and free time:
The skills that motivate entrepreneurs to start a business are often different from the skills needed to engineer a business that runs itself. People who successfully start businesses are generally experts in a trade, product or service, or are very skilled at selling. Owners readily admit they lack many of the human resources or accounting skills needed to put systems and structures in place to leverage the business to grow.
Sweat equity is often the fuel that starts and builds millions of young businesses. As a business grows, it is not uncommon for owners to have a difficult time transitioning from entrepreneurship to business ownership – defined as the point when the business starts to work more for the owner. It is the nature of business ownership to “play chief, cook and bottle washer.” Few people can — or need to —excel at so many different types of tasks.
Too much time on tasks that could be delegated
Business owners spend the majority of their working hours administering the business and servicing customers. Administrative jobs can be outsourced, automated or delegated at a cost of less than $25 per hour. In contrast, owners spend far less time managing and developing people, which is arguably the greatest source of leverage.
Risk mitigation and control
Business owners invest their careers and personal assets for the opportunity to own businesses and shape their own futures. So many owners naturally have a strong desire to control customer relationships, product quality and service delivery fundamental to success — often by doing it themselves. More than 80 percent of business owners choose to self-fund or “bootstrap” their business to maintain control of their company. Thus, most owners lack the working capital (and patience) that allows them to invest in people, technology and systems that can ultimately create leverage and build a business that works for the owner.
Too much time ‘firefighting’
SunTrust Business Owner Research finds that executives who actually track how they spend their time in 30-minute increments are usually surprised to find over half their time is spent on non-value-added activities, or “firefighting” the issue of the moment.
About SunTrust Business Owner Research:
SunTrust surveys small business owners and advisors as part of its ongoing business seminars and symposiums. The small business owners attending these events include both SunTrust client and non-client business owners and are representative of the broad spectrum of businesses located in the SunTrust markets. The research cited in this report is extracted from these 5,425 small business owner surveys collected between 2007 and 2011.
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Most financial professionals are more comfortable delivering services than promoting them. At the end of the day, demand generation — your ability to generate interest, inquiries, new leads and proposals — is a good thing for your practice and your reputation.