Recently as an entrepreneur, I was discouraged by another business owner. I was complaining about my workload and hours I was spending. He told me to get used to it because you will be working a lot of hours for the first few years. With four kids and a marriage that is important to me, I found this to be a depressing thought. I like working but within reason. It isn’t healthy to work too many hours and not have time to rejuvenate and nurture relationships. So what do business owners do?
I am in the middle of a series explaining how to make Finance more fun instead of Drudgery. Last week I wrote about how Debt can be time-consuming, distracting, and downright slavery for a business owner. The second way that you can bring more freedom and excitement to your finances is through automation.
What do I mean by automation? This sounds like robotics or some kind of industrial tooling mechanism that would not be applicable. I like how Michael Hyatt breaks this down in his “Free to Focus” course. Automation happens through routines, templates, processes, and technology.
Depending on the size of the business, there are weekly, monthly, quarterly, and annual routines to ensure success for your business. Can you imagine if you forgot to comb your hair and brush your teeth in your morning routine? All day you would look like you had just gotten out of bed and you would probably have bad breath. Your business is the same. It is important to reconcile your Balance Sheet and review your Income Statement on a regular basis. For more information on regular financial routines, check out “Steps to Financial Sucess“.
We all have processes in what we do. I know some people don’t like processes and procedures, and I realize it sounds very formal. We all have a process in our head but to communicate to our team, we have to write it down and train others. You need Sales and Revenue processes for business development. Then, you need contracts, billing, and collections processes for getting cash. It is important to have a payable process to pay for materials, operating expenses, and to pay employees. Also, you need cash management processes for saving for taxes, abnormal expenses, bonuses, distributions, and profits.
If you find that you are emailing or answering the same question over and over again, you need a template. You can use email signatures to create common emails with attachments. I have done this recently with payroll onboarding and file sharing processes. Also, Google Gmail offers has a “Canned Response” feature in the Labs section. A Finance Manager at one of my clients found this helpful when sending out monthly reports. Templates are helpful for Expense Reports, Standard Reports, Time Sheets, Contracts, Billing Reports, etc. There is so much potential here that has my brain churning.
I have started to dislike email. For some reason, I find myself continually checking it and getting distracted. I think we tend to check email to keep from working on the hard stuff. It is easier to be reactive and proactive. We feel like we are needed, and we like the dopamine hit. The problem is that after spending 2-3 hours stuck in my email, I still have to get all the real work done. I am testing a tool called “Sane Box” that is already saving me time. It will put emails in folders like Sane News, Sane Bulk, and Sane Later to keep your inbox clean for what is most important. I like the SaneTomorrow folder. I can put a less urgent email in this folder and it will send it to me tomorrow. Also, using a project management tool like Asana or Slack will keep your conversations and tasks out of email.
I wish I had thought of this, but I can’t take credit. Check out “Profit First” by Mike Michalowiscz. I will do my best to explain this quickly. You set up separate bank accounts for Profit, Revenue, Operating Expenses, Owner Compensation/Payroll, and Taxes at one bank. A percentage of all sales and revenue gets allocated to each account twice a month automatically. You then move all profit and taxes to accounts at a second bank that is out of sight. You only use your Profit account to pay your quarterly profit distribution and tax account to pay quarterly and annual taxes. I love this idea for multiple reasons. Not only does it get you focused on cash and profits, but it uses the bank as a dashboard to quickly explain how much cash you truly have for different purposes. It saves time and confusion.
Automation is essential to avoid chaos, confusion, and working too many hours. I know we will be working on this regularly as long as we are in business. As a business grows, there will be new challenges. With each new level, there are new devils. By implementing routines, processes, templates, technology, and quick dashboard systems (Profit First), you will be on your way to more excitement and freedom in your business.
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