There is a myth when it comes to growth that More Clients & Bigger Contracts will solve all you headaches in a growing business.
However, if you don’t have all your systems setup, more clients and contracts will just make you busier, and often lead to smaller profit margins, because of all the manual management that is required to service these new clients and bigger contracts.
We speak to business owners that often say, “oohh we’re too small for this or that”. In my opinion though, this is exactly the time you should invest in streamlining your systems.
Thought You Were Busy Now
Wait until you have twice as many staff, supervisors and office admin staff. If you don’t have solid systems in place, you as the business owner, will still be the only source of truth, your team go to.
If you are going into the office everyday when you have a team of 15 or 25 staff, it’s going to get really chaotic later. I think a business owner of that size, should not be operationally involved everyday. If you have a team like this, you should now be a Business Development Manager only.
Your days should be spent looking at the P&L to see if there are any areas for improvement. It should be spent nurturing relationships, improving your systems even more, looking at ways to make more profit, for less work, checking your SEO, effectiveness of Adwords spend, identifying niches and opportunities to increase profits, not chasing the next quick buck to stay busy.
There aren’t too many businesses that their journey of growth was smooth.
When we speak to successful owners with teams of 50 or more, they can recall the crazy days, they maybe behind them now, but there was a time where they just ran around all day putting fires, covering shifts, invoicing, hiring, firing, training.
There was a time they did it all, however, they often admit, if they knew what they know now, they would do things differently.
Reactive Business Ownership
It doesn’t seem that long ago, but it is, but I recall being in fire day in day out, constantly reacting, stressing over every inbound phone call from customers, wondering what did the cleaner not do now, what did we miss etc. It was stressful.
Back then, we still used to reconcile invoices by waiting to the end of the month to get the bank statement from the bank in the post, and then manually entering all transactions into MYOB and reconciling them. If it didn’t reconcile, you could spend a whole day looking for a transaction.
New Rules Of Business
Now, tools like Xero and MYOB connect to the bank directly. The even are starting connect to the tax man. So software is becoming critical to connect systems and connect different part of your business.
The New Rules of Business are here, and they have a digital first approach. If you don’t have a digital strategy in your business, a strategy to move away from manual paper based systems, it will not be long, before your competitors wipe the floors with you.
Our upcoming freshOps Xero Integration for example, simply passes the Timesheets collected in freshOps straight through into Xero, while passing through a payrule engine that can assist Interpret the Cleaning Award or Employment Agreements you have place. Not only to minimise any need for manual scheduling of rosters, collection of paper timesheets and the data entry burden of entering 15 – 25 timesheets into Xero, but to create a system, where you don’t manually touch a thing from scheduling the team through to paying them at the end of the fortnight.
Software is very quickly replacing paper checklists, forms, docs and all manual forms of data collection and doing so in a systemised, repeatable and scalable way, so you can step back from the day to day operations a little easier and know that growth will now just be a matter of client acquisition.
How can these systems increase profits though, so I don’t necessarily need more clients to make more profit?
Well consider this;
The Paper Method (1 Days Work At Least, Every Week)
1. Create Roster in Excel every Monday
2. Upload to Email Client
3. Email Roster to Employees
4. Employee Prints Roster and Timesheets, the techie ones may save it to their phone or computer and complete it online.
5. Employee Fills out Timesheets each day
6. Employee at the end of the week – maybe emails Excel Timesheet back, but may have to scan it and email, fax it (Yep, supposedly people still use fax)
7. If the Roster says 3 hours, the Employee’s Timesheet says 3 hours. Fancy that.
8. Business Owner, receives 15 -20 different emails, then collects all the hours into one Spreadsheet to check them off against the roster.
9. Ads up the hours in excel, calculates how many hours are day hours, how many are night hours, check if they worked on a weekend and calculate that.
10. Call employee about an discrepancies, employee is busy, calls back at end of day
11. Opens Xero, then manual then enters the hours into Xero for each employee and for each pay rate
12. Then runs a payrun based on the SCHEDULED hours.
You may do it slightly different granted, but you get the gist. We do hear of users, who would spend hours each day scheduling and organising staff.
Digitally (Done Once At Setup, Hours A Week)
1. Schedule & Roster in freshOps Once
2. Employee can always access their roster live and Check In & Out at each site with the Mobile App
3. freshOps automatically collects their timesheets in minutes in seconds, so rather than 3 hours, you get 2hrs 47min.
4. Supervisors can see discrepancies and follow up themselves and add comments to shifts that aren’t as expected.
4. On payday, Approve all the Shifts in freshOps and Send to Xero
5. Timesheets are automatically populated in Xero and correct pay items based on the Award or Employment Agreement are applied.
6. Commence the Payrun and pay the Employee the hours they ACTUALLY worked.
Yeah but software is confusing – so was email, and what about excel, seriously, anyone who knows there way around a spreadsheet or word doc, can use operations software.
Where Is The Increase In Profit You Promised Martin?
Well, you no longer spend all Monday doing payroll. However, I always say to business owners, why are we ignoring the Elephant in the Room.
The Elephant in the room, is the 13min of Payroll Saved. In Australia, that accounts to $5.03 (Minimum Award Rate for a Part-Time Employee $23.24 x 13min/60min) Now if you could save $5.03 on each and every shift that this one part time employee does across the week, this could be $50.03 (10 shifts a week). That’s $200.03/month.
Aaah, but you have 20 Staff, that could be $4004.60/month. Who needs more contracts, when you’ve increased profits by $4000 a month by simply measuring the biggest cost in your business with accuracy. LABOUR.
My Team Always Work Over
I know plenty of businesses were their employees consistently work over the scheduled time, so they would prefer to pay them that, as it’s cheaper. The risk is that there are plenty of tools for employees to track and record their hours and a disgruntled employee could definitely put you in hot water, if they could prove they consistently worked more hours than they were paid.
This grey area means as business owners, we do have to get our employees working under the scheduled times consistently. It isn’t their fault you under quoted. It’s not their fault the Client made a mess and it took longer to clean.
So it’s a tricky space still for business and governments around the world. However, if you’re business pays your staff the actual hours they work, not the easiest to report hours, then you’ll be bullet proof when it comes to any employment law issues too.
Food For Thought
I see that a lot of the common methods or processes that businesses use to report worked hours are often created from the path of least resistance and the easiest path for the business owner.
However, depending on the side of the timesheets your team consistently fall, there are massive opportunities and massive potential threats to your businesses success.
Around the world, governments are watching, and they are using digital methods, to be able to see if vulnerable workers in industries such as cleaning, are being treated fairly.
Check out this Calculator. It doesn’t mater what scenario you run, any timesheet saving improves profits.
You may not be a Xero User, and that’s ok, the scheduling and collection of timesheets along with accurate Time 7 Attendance alone, will save you time and money.