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When you started your business, I am sure you had grand ideas as to how it would look, feel and the level of profitability it would achieve.  Well, how are you getting on?

I met a chap last week who works in the business networking arena and he admitted to positively discouraging those who wished to start their own business, if they did not have the capital to survive and support themselves and family for two years.

His findings suggest that, even with a following wind, the average new business will make a loss in the first year, probably break even in the second, before becoming profitable in year three.  There are of course many exceptions to this, and I am sure that many of those reading this article have a different story to tell.

If you are in the early stages of developing your business or better still, just thinking about it then read this book! “The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It”, by Michael Gerber. It may well change your approach to your business, it may even make you think twice about starting a business.

I will not tell you too much about the content as it is better you read it yourself, but one thing is clear. As a business owner you have various responsibilities and roles within the business including, Owner/CEO, Finance, Sales, Operations. Very often a new business is started by an individual who has left a particular role within an organisation for which they get a guaranteed payment. Life has just changed....The individual now has at least four roles and no longer gets paid, and three of the roles are completely new to him or her.

The wise business owner develops a plan, allocates an amount of time to each of the roles and spends time working both in and on the business.  Let me explain the difference. Working in the business is doing the work of the business, producing the product or delivering the service for which, hopefully, people will be willing to pay. Working on the business is taking actions that improve the business. Developing a marketing strategy, developing a new product or service, researching the target market, networking or reading to gain more knowledge and develop new skills are examples.

I have come across a number of small businesses that seem to run like a see-saw. They undertake some marketing and win new business. They stop marketing because they have work to do. (They like doing the work, that’s why they started the business!) After a couple of busy weeks they realise that they have no work past the end of the week.  The following week they are back marketing and the process is repeated.

At some point they may find time to do their books, raise their invoices, chase outstanding payments, pay suppliers and so on. These are tasks that they may not enjoy and be alien to them; it therefore takes them a long time and becomes a job that they try to avoid! Many business owners spend the evening doing these jobs (or all weekend!) being nagged by their partners that they never get to spend any time together!

So now the individual has a new boss... far, far worse than the one they left in their old job.  This one is the monster that has been created - the business!  Pressure increases, customers are complaining and the owner can’t even argue with the new faceless, demanding unreasonable boss!

How can this be avoided? Well, that is where we can help, not only from a bookkeeping and accounting perspective but helping to develop plans, prioritising tasks, helping outsource tasks that are best done by those who like doing them! At Opus Accounting our aim is to become your trusted partner, a one stop shop for business advice whether it is time management, HR, Health & Safety or just providing a confidential sounding board for ideas. Contact us for an entirely FREE of charge discussion with our Business Advisor and an Accountant to explore how we could work with you to avoid the trap and ending up with that unreasonable new boss.

Call me, Grahame Johnson on (01635) 884270 or email grahame.johnson@opusaccounting.co.uk and take the first step towards a more successful business.