It may be no surprise to you that 63% of SMBs feel they don’t manage time effectively. We estimate that $26k per year per knowledge worker is lost to productivity losses. This loss in productivity isn’t just caused by ineffective meetings or office distractions. These can be productivity losses associated with completing core financial and operational tasks.
When I spend time with business leaders and finance professionals in the SMB space I usually ask them how much of their time each day they spend on tasks that actually help the company achieve its mission. Whether that mission is building apps for non-profit organizations or finding ways to help clients improve customer service with new technology, I usually find that most leaders spend less than 10 hours a week actually doing the things they set out to do when they started their business. This is a startling productivity drain. I infer from this that business leaders are so passionate about their company mission that they endure more than 30 hours a week of performing tasks that, while likely somewhat related to their business objective, are not solely centered on doing what the company was built to do.
We asked business and finance leaders from nearly 100 SMBs how they would allocate their time if they had ten more hours per week. Respondents said they would spend most of this time (2.4 hours) driving new revenue streams and another 2.3 hours improving internal processes.
Here are three ways to determine if your business is suffering from these productivity drains. See if any of these problems sound familiar.
1. Visibility into financial performance
How easy is it for you to quickly understand how your business is performing against KPIs across product lines, locations, and customers? Can you see performance trends over time? Instead of analyzing your business performance, are you and your teams spending hours extracting data and consolidating and building reports?
Perhaps gaining a complete picture of the health of your business finances used to be simple when the business was a smaller, less complex organization. But, if you have experienced growth which has led to an increase in employees, customers, vendors, products, services and even locations, then truly understanding your financial performance against key indicators may be causing a significant resource constraint on your team.
2. Operational silos
As the company has grown, your teams may have become misaligned. When trying to understand why a customer has filed a negative complaint, you may have to consult with at least five people to gain a complete report. Furthermore, your departmental silos may be exacerbated by the fact that individual departments are being motivated by different performance goals creating an environment where no two teams are focused on driving the same business outcomes.
These silos could mean your business is facing productivity losses from duplicate work, stalled projects, incomplete project plans, and insufficient business planning. So, while your team may be busy, it may not be as effective as it could be if everyone were working toward common goals.
3. Financial complexity
With business growth comes business financial complexity. This growth leads to more financial transactions, more bank accounts, company credit cards, payroll accounts, ledger accounts. Trying to keep tabs on customer transactions, employee expenses, cash in and out, and bills can seem impossible.
To make it worse, the manual processes you are used to following to facilitate these tasks may be draining you and your team’s productivity. They may also be leaving you exposed to risks such as inaccurate information caused by manual data entry, an inability to build audit trails, and an inability to manage data in compliance with developing regulations.
Challenges with performance visibility, operational silos, financial complexity, and productivity losses all lead to business uncertainty, preventing you from responding to customer demands and leaving you struggling to keep pace with the competition. They reduce your, and likely your business stakeholders’, confidence in the financial certainty and compliance of your business.
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Research referenced in this article can be attributed to the Sage SMB Accounting Systems Survey, 2017, and Get Back Wasted Time: Executive Strategies to Grow Your Business, IDC 2018.