You aren’t helping your small business by being a jack-of-all-trades. This is counter to the way most entrepreneurs operate but what you should do instead is focus on what you do best and leave the rest to an expert.
It’s simple: Do less, better.
When small-business owners hear that for the first time, most of them respond with a list of “buts”:
- But I have to do these things myself because I can’t afford to hire someone.
- But it would take more time to train someone than to just do it myself.
- But I’ve already learned how to do all this stuff, so I might as well keep doing it.
- But no one else cares about my business like I do.
The list goes on but the “buts” have to stop here. You must focus on the single most valuable resource available to you and your business: your time.
To make the most of your time, it takes two things. First, don’t confuse cheap with efficient. Second, always weigh the cost of your time against what else you could be doing with it.
The difference between cheap and efficient is doing less, better — and that difference is literally worth a fortune.
Doing less, better, is so efficient that I saved millions of dollars for a client over a decade-long contract when I was in the international shipping industry. I saw the same issue when I ventured into small-town law: time was undervalued and, thus, mismanaged. Business suffered as a result. The solution, however, was the same — and it remains the same for every business.
Working in the strange world of international shipping and also having set up shop as a lawyer was a strange path to get to where I am now at the helm of a company that’s changing the way small businesses operate. But it gave me a chance to study businesses large and small, hyper-local to completely global. I’ve collaborated with entrepreneurs delivering products as varied as bottles of liquor, virtual networking, legal counsel, and consumer-goods containers the size of highway tractor-trailers.
A number of years back, I founded a marine-operations business. The idea was to manage international shipping on a contract basis for a big company, which meant that I was entering a vast, multibillion-dollar industry with margins that are razor-thin.
Consider this: A T-shirt priced at $12 in a department store has probably traveled 20,000 miles aboard several container ships while making its journey from raw cotton to retail product. For moving that T-shirt nearly the distance of Earth’s circumference, a shipping company earns about a dime.
It’s all about efficiency.
The shipping industry was already devoting billions of dollars to shaving pennies from its cost structure in order to stay competitive when I had what must have seemed like a crazy idea to improve efficiency even more. I was fortunate that one of the 10 largest global container-shipping companies in the world took a chance on my experiment. With that big-time contract secured, my little company was officially responsible for managing marine activity east of the Panama Canal in North, South, and Central America.
Was I scared? Yes. Did I feel like I really knew the ins and outs of running a business? No.
But here’s what I did know.
Before starting my company, I’d spent a few years working in the shipping industry, and I’d noticed that some of the standard practices made no sense. Employees were expected to sit in a cubicle at regional headquarters from 8 o’clock in the morning to 6 o’clock in the evening during the week — and be on call every minute of every day.
Since the essence of the business was managing ships on the open sea, the work couldn’t stop for weekends or holidays or anything else. Far too much of what we did — making stowage plans for vessels after loading figures came in at 6 o’clock, or handling emergency problems on board a ship — were outside the scheduled workday. That meant we showed up just to show up during the workweek. We were in our cubicles during the required hours, though we didn’t actually have a lot to do.
The first thing I changed when I started my business was the schedule. I knew that those office hours were a waste of time in my industry. I also knew most of the jobs in marine operations often paid six-figure salaries. That was the case even though those workers spent just a few hours a week on the really important stuff, like 3 a.m. phone calls for bringing a ship into port, resolving some onboard crisis, or making a decision that would affect millions of dollars of cargo. The rest of their time was spent creating reports, sending e-mails about scheduling, or doing nothing at all during the workday.
I saw a different way. Why pay a highly skilled shipping expert to work full-time when you really only need her expertise 10 hours a week? I could pay an expert for part-time work, and train someone else at $15 to $20 per hour to handle e-mail and other clerical tasks.
A tweak to the workflow, plus some investments in the latest technology and a serious rethinking of where and how everyone worked, and I had an operating plan.
My profits soared and I saved big money for my client.
As my business grew and I hired more employees, I discovered that I had my pick of the best talent in the industry because I wasn’t requiring them to sit in a cubicle from 8 a.m. to 6 p.m. and be on call 24/7. I was offering part-time, work-from-home jobs that only required face time when something significant was happening at the port. I found people were lining up to work for me — even for fewer hours and less money — because of the greater life quality it afforded them.
The rewards of this change went beyond saving time and money. I was also delivering a higher quality product. Over and over, we would run into competitor shipping companies that were jealous of the quality of planning and management we were able to achieve. Our product was much better because the analogous work at competitor companies had been outsourced overseas.
I had started my business right around the time port workers in the U.S. had begun unionizing and, in response, the industry began cutting jobs in the U.S. and hiring workers on the other side of the globe. That meant our competitors’ planning and management operations were being handled by people 12 time zones away, earning a fraction of the pay. It translated into a less engaged and less skilled workforce.
This caused costly mistakes. This is also how I learned the difference between cheap and efficient. It was cheap for the other shipping companies to outsource jobs overseas. Their budgets looked great, since they’d cut labor costs by 50 percent or more. But it turned out that those cheaper workers actually cost more than they saved, in the form of errors and miscommunication.
It was efficient for me to hire the best vessel planners in the business part-time, leverage their talents with the best technology available, and train unskilled workers to handle related clerical work. It was so efficient that I reduced costs by nearly 50 percent and, over a ten-year contract, saved the company millions.
Plus, I had built a great team, which was good because I decided I didn’t want to devote my life to the shipping business after all.
Instead, I decided to go to law school.
A few years later, still managing the shipping company on a part-time basis, I emerged with my law degree. I thought I wanted to have my own legal practice, so I took the time to observe how other lawyers had set up practices and operated their firms. What I saw reminded me of the very thing I’d learned in international shipping.
Many of the lawyers I met founded their practice with the simple goals of developing expertise in their particular area of law, and serving their clients accordingly. Frequently, they started practicing with nothing more than a home office. But soon they had to divide their time between the legal practice, marketing and bookkeeping. Once their practice had grown a bit and it was time to hire a legal secretary, that raised questions about how to attract qualified applicants, what kind of salary to offer, and renting office space — which brought issues of office management, from IT to payroll to fixing the copy machine to taking out the trash at the end of the day.
It got so these lawyers were doing everything but the practice of law because they were so busy running the day-to-day operations of the firm. Worse was the fact that they were spending all their time on operations instead of law, which meant they were doing mediocre work for their clients. That made it difficult to attract new clients and thereby grow their practice. They didn’t have time to stay on top of changing legal theory or to network and attend conferences.
On top of all that, they were basically unhappy since they were spending all their time doing stuff they weren’t very good at and had never had any desire to do in the first place. Just like in the shipping business, time was undervalued, and thus mismanaged — and business was suffering as a result.
From international shipping to law to whatever your business is, nobody can afford to make this mistake. You have to do less, better.
If you’re drowning in daily humdrum tasks that bore you, your important ideas for how to improve the business are relegated to a wishlist — or, more accurately, a when-I-finally-have-time list. At the rate you’re going, you can’t imagine ever having time to get to those ideas even though they have the potential to grow your business in new and exciting ways.
To change your mindset, put a dollar value on your time. This acts as a guide to help you delegate the tasks that are inefficient for you to do yourself. And the dollar value of your time is probably higher than you think.
If you’re a small-business owner who’s bootstrapping, time is your start-up capital. These are the three key questions to continually ask yourself:
- Where am I spending my time?
- What is the cost of my labor?
- How much value am I adding to my business?
Answer these questions and you will do less, better.
This is how to maintain laser-focus on what’s most important so you can make wise decisions about how to spend each the precious 24 hours you’re blessed with each day. It’s time — not money — that ultimately drives your bottom line.
These core questions come from The Golden Formula, first introduced in our CEO’s international bestselling book, Live Free or DIY. If you want to learn how to practically apply The Golden Formula in your business, read our whitepaper to learn more.