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Time to refocus?

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Thursday December 6, 2012 at 9:00am
With many small business owners working flat out to keep their heads above water in the recession, I wasn’t surprised to read in a recent survey that only 24.4% of those questioned said they would close completely over the festive season and 32.7% will close their doors for just 2 days.

Not wanting to miss out on potential sales, covering staff leave or simply taking the potentially quieter period between Christmas and New Year to take stock, do some important business planning for the year ahead or to catch up on paperwork, are all perfectly valid and commendable reasons for business owners being too busy for Santa.

But Christmas aside, if you find yourself consistently working long hours, weekends and rarely taking a break – there is the risk of, at worst, burn out or, at best, a loss of perspective on the business. And even if we take a holiday, we all know how difficult it is to switch off from the office with email and smart phone meaning we’re on call 24/7.

One of the biggest dangers for any owner of an SME is that they try to do too much, or – as is often the case - simply do not focus their time, energies and talents in the right areas. As a one man band starting out, of course you are more likely to be chief cook and bottle washer. But the pitfall many business owners fall into is to keep doing everything, even when the business is able to grow.

A survey of SME owners last month bears out this theory, apparently one in 10 is guilty of spending up to 90 per cent of their time on activities that aren’t directly related to driving business growth.

And so despite business owners seeing retaining existing clients as their number one priority and winning new business and growing their organisation as their biggest challenges, they are all too often more likely to be found poring over operational issues such as HR, IT, finance and training.

But if you look at the most successful entrepreneurs – it’s often because they have known where best to concentrate their talents and when it’s time to delegate.

SME owners, particularly in these hard pressed days of recession, may be tempted to the DIY approach as they perceive it saves them money. But can they really afford not to concentrate on the overall business strategy, direction and growth because if they don’t do it, who will?

And it can be a false economy to take hours over a job that could be done in half the time – and quite likely a whole lot better - by someone else.

The skills needed to be expert in the range of operational issues such as maintaining IT systems, keeping the books, financial planning and keeping the business legal are vast and it is unlikely that one individual would have the combined expertise of those who specialise in their respective fields. Struggling to do it yourself and potentially overlooking some vital piece of legislation or financial reporting, could prove a lot more costly in the long run if the SME is exposed to litigation or a time-consuming investigation by HMRC.

Understandably business owners mindful of their cash flow want to keep their operating costs to a minimum. This is where outsourcing can be the answer. It is a lower risk option particularly for start-ups wary of over-committing in the early stages. Outsourcing can be a ‘pay as you go’ option, buying the support you need when you need it without taking on the significant cost of a specialist employee. We choose to outsource some of our marketing support for example, just as many of our clients choose to outsource their book-keeping and financial reporting to us through our Business Edge service.

Outsourcing to a specialist with the expertise for specific operational needs will not only free up time to grow the business but can inject a new perspective which acts as a catalyst for improvement and innovation.

Andy Parker
Chartered Accountant, Birmingham

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Parker Chartered Accountants and Financial Advisors is the trading name for Parker Business Development Ltd (Registered No. 4116664), Parker Tax and Trust Ltd (Registered No. 06950353) and Parker Financial Planning LLP (Registered No. OC347027). Parker Financial Planning LLP is authorised and regulated by the Financial Conduct Authority. All companies are registered in England and Wales – registered office contact details here