Legal Research

The Cost of Doing Business

By Steven Matthews

Rachel Rodgers makes a great point in her post today at SPU — the idea that in business, everything has a cost. She illustrates:

“Using an old laptop that gives you trouble every now and then has a cost. The cost is lost time that could have been spent working and the ensuing frustration that prevents you from being creative.”

or,

“Not purchasing software that makes work flow and management efficient has a cost. Not having staff that can handle certain time consuming tasks has a cost.”

She also correctly notes that even for a new business, sweat equity will only go so far. Is it a great starting point? Of course, and a necessity. But once any kind of cash flow has been established, there’s a business to be managed — one that requires targeted (even if minimal) investments.

These are tough lessons. And frankly, ones I wish personally that I took seriously sooner. And I say “took seriously” because let’s face it: everyone knows they need to delegate, outsource, simplify, let go, invest in their time, etc. Being decisive and executing on the other hand… is much more than lip service, or leafing through E-myth one more time. Knowing when and what to outsource isn’t easy. And it goes beyond managing your business, and should be considered on a personal level too. Who mows your lawn or weeds your garden in the summer? If you only have one day each week to spend with your family, and you lose it to yard work, that’s $150/month poorly saved. Unless you love it, of course. Stress killers are an investment too.

Each business owner finds their own valued investments, but here are a few that stood out from my own experience:

• online invoicing;
• web based project management;
• hiring part-time contractor help;
• replacing or adding something tech-wise each year;
• part-time employees (and yes, sweating over that first hire is worth it);
• help with banking or running errands;
• hiring a payroll service (far less expensive than I expected); and
• hiring accountants and bookkeeping help from day-1 (or year one, more likely).

Any other entrepreneurial SME-types or lawyer-entrepreneurs care to add to this list? Thinking back to your early business days, any fond recollections of your first business investments?

Full post as published by Slaw.ca on March 03, 2011 (boomark / email).