The Key to Small Business Management? Balancing Direct and Indirect Tasks
From launching new products and services to taking out the trash, small business management requires wearing lots of hats. If you’re like most entrepreneurs, you prefer the fit of some to others. The truth is that each hat is important and necessary, and you have to make time to wear them all.
Direct Tasks Fuel Your Passion
Strike a balance by doing a self-assessment of your operation, answering several questions. For example, what’s the nature of your business? What is your unique selling proposition — or USP? What is your product or service niche? What raw materials are required to create your finished product?
Next, identify your competition. What businesses compete with you? How is your business different? Describe your customers: do you serve a specific customer niche? How do they relate to your products and services?
The answers to these questions directly relate to the reason why you started your business. If you don’t take a self-assessment of your business, it can be difficult to articulate your USP, and that will make it hard to reach the right customer segments with your marketing efforts to sell your products and services.
In his well-known book, “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It,” author Michael Gerber calls these tasks the ones you do when you work on your business. They produce revenue and help you grow your company. They involve big picture activities such as innovating and strategizing, designing and refining your products and services or creating a short-term and long-term plan. They’re the foundation of your passion, and the reason you’re excited to come to work each day.
Indirect Tasks Keep You Running
The next area of small business management involves tasks that are indirectly related to your business. These are the things that keep you compliant and afloat. Tasks include accounting, record keeping, taxes, compliance, payroll, time management and, yes, taking out the trash. Gerber calls these tasks the ones you do when you’re working in your business. They’re usually not as fun, but they’re just as important.
Unfortunately, many small business owners overlook these types of tasks. They prefer to spend their time working on their business by dreaming up new products and services. They attend industry events and work to attract new customers — the parts of their job in which they excel. But if the indirect tasks aren’t handled, a business could crumble.
Indirect tasks are not unique to a certain type of business, but they can take time away from the things a small business owner likes to do. For example, all businesses have payables and receivables they need to manage, and the net of those two processes is called cash flow. If you’re an architect, your passion may be to design beautiful houses. Once you complete the blueprints of a home, however, you have to bill your customer who will pay you in 30 days. Then, you need to keep track of that outstanding receivable.
You will also have accounts payable, which include things you pay for using your receivables, such as payroll, software or pens. If you don’t have money in the bank from your accounts receivable, you can’t purchase the things you need to run your business.
Unless you’re a professional accountant, staying on top of accounts receivable and accounts payable may feel tedious, but without them you don’t have a business. Instead of ignoring tasks you don’t like, carve out time to handle them, hire someone else to do them or find tools that help you minimize or automate them.
Finding a Balance
Instinct may drive you to invest most of your time into working on the items that build your business — it’s where your passion lies. However, it’s important to recognize exactly how you allocate your time, so you can optimize the time you spend on your business without overlooking the time that needs to be spent in your business. Download Mastercard’s latest whitepaper, “The Digital Tool Belt: Helping Small Businesses Thrive,” to learn more about the kind of tools that can help you spend less time on indirect tasks so you can focus on the tasks you love.