Don’t be an expert
Part of successful business management is realising you’re not brilliant at everything!
Sounds weird? Totally. I follow something called the “hourly rate strategy.”
Most entrepreneurs will, at some point, hit a snag, obstacle, or dilemma that they either don’t know how to solve or don’t have time for. Picture the salesperson dealing with admin or the business owner always putting out fires. Would anything get done? Would productivity be at its max? Would the boat go faster?
This is when it's worth thinking about getting outside help. Calculate your hourly rate.
Say you're in sales, working 40 hours a week, and achieved £100K in sales. After bank holidays, regular holidays, sickness, birthdays, Christmas, you’ve worked 42 weeks in the year. Your hourly rate is around £95 per hour.
Should you be photocopying documents, booking appointments, firefighting for this?
Simply put, no. You're more productive meeting new clients, prospecting businesses, and making introductions. Maybe now is the right time to think about hiring staff?
However, staff brings its own set of issues. If you've decided that your “£95 per hour” rate means someone else should be booking your diary, this frees up your time. BUT, don't fall into the trap of paying someone else to do a job that means you're not doing something else! If you're paying a PA £25ph and you're not making your boat go faster, then it’s costing you £120ph – expensive!
Perhaps consider figuring out how many hours you need someone. What if you spend 5 hours a week making phone calls to book your diary? Could you employ someone for 5 hours pw? Would someone want to work 5 hours per week? Think about the type of person this could be? Not exactly a high-flying executive assistant!
Maybe virtual PAs could be a solution? You would bypass all the HR and payroll issues of hiring someone, pick and choose hours, and keep flexibility? Plus, a virtual PA would be better at booking your diary than you will be! (assuming you’ve got the right person!).
So, back to the title – don’t be an expert at everything! This philosophy can be applied to a number of subjects and needs.
Working with a team of 15 people, I often get told I’m not a manager! I’m too emotionally connected to the company, and my moods can impact the team. So I decided to employ 2 Managers to run the company. Let’s be honest; I started the company to provide financial advice, not become a manager! My hourly rate is enough to cover the costs of 2 full-time managers; I have a PA booking my diary and an admin team that looks after the paperwork. I have, in effect, created an environment that means all I need to do is see clients and prospect clients. Maximize my client servicing by being present, available, and provide the exceptional advice I can. My clients save money, I see more of them, I become more profitable, I pay someone else an hourly rate that covers all the other tasks, my boat goes faster!
Now, this can take several years to perfect. Starting a company and working out your hourly rate before you have a turnover is a luxury few can afford without funding, grants, and support (which is out there!). In the early years, rarely is employing someone a good idea. Working with consultants, virtual assistants, and so on can plug a gap, but always revert back to the hourly rate. If it’s cheaper to pay someone else to do it – then do it!
Over time, you will learn how often you rely on others and indeed, how much better professionals in different sectors bring a level of diversity to your team. Not being the expert in every field is a good thing!
This can also apply to non-sales environments. Being a business owner means you are providing a product or service that costs you less than you’re selling it for.
It doesn’t matter if it’s cakes at a stall or an engineer selling a new piece of technology; the hourly rate strategy still works.
The cake maker, who is an expert at making cakes, should they be going to the supermarket? The engineer who has created a piece of technology, should they be doing the administration and “techy reports?” Well, if they’re the only one who can, then perhaps, but would they also be the person to make the sales pitch? For years I’ve come across people who are incredibly intelligent and clever at what they do. But rarely do they have the gift of the gab and be able to sell their services. A different version of don’t be an expert.
I had a close friend who was an Independent Financial Advisor. He was one of the most gifted financial advisors I ever met and left the bank to start up his own financial services company. We were all convinced he would make it. He was chartered, fellow of the CII, and even taught other financial advisors how to be financial advisors. How to put together an excellent financial plan using cash flow analysis, identify risks, and generally make clients more money.
He failed on one point…
He couldn’t sell his services.
Waiting for the phone to ring (which it didn’t as no one knew who he was), not asking his existing clients for referrals, spending all his time dealing with admin. His boat started on the right track but didn’t go fast because he wasn’t the expert in every field.
I wonder if he employed a marketing team, or worked in collaboration with others, or even asked his existing clients for introductions, could he have been more successful? What if he recognized he shouldn’t be an expert at everything?
As an engineer, cake maker, widget provider, it doesn’t matter. If you don’t know how to sell your services, there never going to sell. Hence under the 3 M’s – Marketing is key!