5 signs you need help with business management
I talk to business owners all the time and many ask me “how do I know when I need help?” The answer to that question is different for every business and every owner but these are some signs it might be time to bring in some outside assistance.
1. You’re using spreadsheets for everyday processes
I love spreadsheets; don’t get me wrong. I’ve made them for everything from project budgets to planning my wedding. When productivity software was new, spreadsheets were an absolute game changer, and in many ways they still are. Ad hoc budgets, data cleanup, spot-checking analytics – these are all valid uses for a spreadsheet. But in 2022, most everyday processes can be handled more quickly, easily, and accurately inside a purpose-built platform.
For example, do you manage project budgets with spreadsheets? Are they made from a master template with locked formula cells and error checking? Do they tie back to a database? If not, they probably contain mistakes and they definitely cost someone time consolidating them with a system of record.
I’m not saying you need to learn about financial or enterprise resource planning software systems, but it might be time to talk to someone who knows about them in the context of your industry.
2. You have a contract with a much larger company
So you landed that white whale Fortune 500 brand you were after - congratulations! Remember the 25-page Master Services Agreement (MSA) you signed? Did you read it? (I know they weren’t willing to negotiate it so I wouldn’t blame you if you saved the money on the lawyer). If you read it (and even if your lawyer read it), did you understand everything that you agreed to? Many large business MSAs contain a clause like the following:
Giant Corporation may audit Supplier (that’s you) records to verify Supplier’s statements and compliance with this Agreement, including but not limited to privacy or security requirements.
Leaving that second part for another blog post, the first part means your customer reserves the right to see all your financial and other records related to projects under your MSA. And guess what, their auditors will have standards about documentation and audit trail that you won’t learn about until you get audited. If you’re in the boat from the spreadsheet example above, spoiler alert, you’re not going to pass an audit.
I’m not saying you need to learn about financial auditing, but it might be time to talk to someone who has built a system for this kind of reporting and has sat through a few of these audits.
3. You have 5 employees in California
If you enter “how many employees before I need HR” in a search engine, you’ll likely come away with a number between 20 and 40. If you’re in California, the answer is 5.
For most service businesses, Human Resources or Employment Law are the biggest exposure to legal (and by extension financial) risk. In California, the paperwork and reporting needs are precise and many (if not most) of the well-known payroll companies fall shockingly short of the requirements for our friends in Sacramento. Come on, you say, does any of that junk really matter? Maybe not, but if you’re dealing with an employee complaint against you, or a problem employee you’re trying to separate from, the answer is an unequivocal yes. Wouldn’t it be better to be protected from the get-go?
I’m not saying you need to become an expert in HR, but it might be time to talk to one.
4. You don’t have time for your customers
Are your existing customers frustrated because they can’t get ahold of you? Do new prospects wither on the vine? What are you spending your time doing that could possibly be more important than talking to new and existing customers?
An astounding number of business owners I talk to do their own bookkeeping, or can’t let go of project management, or are overwhelmed with tax filings. They fill in the gaps where they see things falling through, and it takes up too much of their time. They want to focus on customers and growth but they’re just not sure where to start.
I’m not saying… you get the idea.
5. You’re deferring decisions you know are important
Business decisions require good information. Take hiring – when to hire a new team member can be a tough call even when you have a clear understanding of your capacity planning. If you don’t have any kind of capacity planning data, you’re just making a guess. Same with large purchases: do you need this new equipment? How is your cash position? How far can you project that position forward? If you don’t have a 12-month cash flow projection handy all the time you’re at a serious disadvantage (and I don’t mean in a spreadsheet).
There’s a lot of software companies and consultants out there ready to sell you dashboards and analytics and blue sky. Wouldn’t it be great if there was a company focused on the real-world, everyday challenges of small and mid-sized creative businesses?