Let’s talk about Donald; a self-employed electrician (and an excellent one at that). As you know, we can’t all be experts in everything. While Donald has an in-depth knowledge concerning his field; he was very old fashioned in the way he ran the administrative side of his business. Donald is a technophobe of sorts. It’s not that he distrusts technology; it’s that he’s weary of making change and not having support in hand to help. How do I know you ask? The stories his wife Louise told me:
- In 2012, they went to Paeroa for the day and needed money. Louise said “let’s go to a cash machine” Don replied “what do I do”? He didn’t know how to use it as he only ever wrote cheques. If he needed drawings from the business (i.e. cash) wrote a cheque to himself.
- He handwrote details of each payment on bank statements
- Used a huge cash book with 30 columns
- Invoiced by hand using one of those stationery store books with carbon paper and posted the invoices to clients.
- Wrote lists of what he had to invoice for or kept the list in his head.
- The cash book went to his bookkeeper. GST and end of year went to the accountant.
- Phoned to chase debtors (he likes talking to people)
Hours In Paperwork
In the early days of their marriage, Don would spend hours at night and on the weekends doing his administration. Dealing with lots of small value items. Manually figuring out margin. Writing and addressing the invoices.
How many hours? At least two; often three. NIGHTLY. It stole his freedom and leisure time at night before kids.
Louise, an accountant, managed to get him onto an accounting system so she could help. However it was not online and still manual. This time it was Louise’s freedom stolen. Often spending four hours at a time while having Donald watch the children.
So what do we have here? Stolen leisure time. Don’s two hours a night average x six nights a week x 50 working weeks. 600 hours or 25 days of his life – almost a month wasted doing things manually. With Louise, four hours a week, stolen time from the kids. An annual accounting bill exceeding $10,000 for their GST, Trust, Annual Accounts, meetings at end of year. Their accountant didn’t do business advice.
Pricebook Feed and Software
Louise got him finally onto another accounting system back in 2015. Now she’s working on him to switch to Xero www.xero.co.nz. Donald was a more than a bit hesitant because he needed to have his supplier price books available for pricing the small amount of inventory he does carry. Suppliers though – for example JA Russell can email price books to clients and xero can upload up to 1000 lines of inventory. Or he could use an industry software such as Fergus www.gofergus.com to manage his jobs and import entire supplier inventory price lists.
The very important point of this story is the high opportunity cost Donald and the family bore due to his reluctance to modernise (or should we call it fear; or lack of understanding of what technology could do for the administrative side of his business.
Two to three hours of one’s life stolen. Daily. Four hours of Louise’s life stolen. Time with their parents stolen from the children. When it could have been significantly reduced, and at no extra cost.
What if Donald was single? What if he instead put the two hours per evening into building business and working? Those 600 hours at an average industry charge out rate of $75 is $45,000.
If you are like Donald; wary of technology; afraid of taking the leap to changing to a more advanced way of doing business – take the time to add up your opportunity cost.
Time stolen from your family. Leisure time stolen from your life. Lost income producing opportunities. You’ll find the cost of complacency will be too high to accept.
Debbie Mayo-Smith is one of New Zealand’s most sought after motivational speakers and trainers. Sign up for her monthly quick tip newsletter here. http://debbiespeaks.com/newsletter/newsletter-sign-up/ To have Debbie speak at your next event or train your team call 64 27 575 5359 or visit her www.debbiespeaks.com