It’s really a wonder how some businesses work. Everyone runs all-around all day long but at the end of the day, they don’t make any or make very little profit.
How is this possible? How can it be that some people devote 12 hours and 16 hours at work and in the end, it does not work? Something is wrong. The entrepreneur thinks: why do I have so much to do, I have so much to solve, so many people rely on me, so many phone calls, and at the end of the day, the bank account is still empty again?
It is a fact that poor results originate from poor organization, division of labour and selection of staff. Other times it is simply the fault of excessive ‘control’ by the anxious businessman. Other times it is the combination of many factors, including the above, along with Market data and the preconceptions that employees have regarding the way they should work.
But what counts at the end of the day is the outcome, and in the end, the result is the same: a lot of work, a little profit. What might be the reason for this and how can we solve it?
Time-consuming or unfitting procedures
In all businesses we have procedures. But the problem starts when the procedures you have adopted are time-consuming or wrong and therefore slow and inefficient. Be sure to get rid of processes that are not needed or delay you unnecessarily and do not offer or offer very little to your productivity or the productivity of your staff.
Micromanagement
This problem starts at the top management of the business. If the manager or managers require to control everything then you have a very serious issue. The staff will be afraid to make the slightest move without approval and if you are their manager, you will simply be flooded every day with ‘small issues’ and ‘minor problems’ for which you probably pay someone else to do for you.
Slow or ineffective staff
Lengthy procedures and excessive control have their impact. Slow people. And since you pay your staff by the month and not by the performance, the slower the staff, the higher your cost and therefore, less profit. Other times, the slow staff is not due to the above but, quite simply, well, to them being simply slow. A poor selection of slow people that you, the manager, did. How do you measure the performance and speed of your staff? And if you find that one of your staff is slow, what do you do?
Wrong or excessive staff
Everyone makes mistakes and maybe you too have made some wrong choices regarding your staff. Especially in times of low sales, you will almost certainly discover that some of your staff shouldn’t be in the company, or that sales don’t justify as many people. Two options here: either you reduce costs (staff) or you drive up sales. Pick the most feasible and move on. Choosing to do both is a sign of really talented managers and CEOs.
Automation
There are numerous tools and ways to automate your everyday tasks so that you have time for serious thinking, decisions, and movement. Automating requests for offers, sales, and orders with software, minimizing wasted time with emails, teleconference instead of constant meetings, return or complaint procedures, you get the point. If a task is repetitive, you should devote time to automate it to the point that it can be done by someone other than you with relative ease and less time. Time, for managers, is valuable, and you as a manager should do whatever you can that provides yourself with more precious time.
Pricing
The hidden plague of business. Most entrepreneurs don’t know why they charge what they charge. Some charge based on cost, others on the basis of competitors’ prices, others on the basis of the benefit to the customer, and others according to the mood they had when they woke up in the morning. There’s no specific pricing model that can be applied to all businesses. Every business needs to analyze many factors before finalizing its pricing strategy. Keep this in mind: if you are going with low-profit margins you will work a lot with little profit. If you charge with a higher profit margin you will work with fewer clients. Pricing needs to be studied, especially in such times.
When I hear entrepreneurs complaining that they work twelve and fourteen hours a day but don’t make a profit, I always have the same question? What do you do for 12 and 14 hours at work? How can you perform, think clearly, and make right and not hasty decisions?
The answer can be simple and obvious: he (owner, manager, entrepreneur) wants to control everything. In this case means that he does not trust his staff, does not know what he is doing and simply tries to justify his incompetence through ‘strict control’, his staff ‘plays’ him and loads him with the work they should do, or his own clients take advantage of him. Sometimes all the above.
How many hours do you work per day?
