Field notes

Seven mistakes owners make without noticing.

Each one costs money quietly. Each comes with one thing you can do about it this week, on your own.

Reading the bank balance as profit

The balance tells you what’s in the account today. It doesn’t count the bills you haven’t paid yet or the money you’re still owed. So a good month can look bad, and a bad month can look fine, and you only find out later.

This week: Write down what you owe and what you’re owed, next to today’s balance. The difference is closer to your real number.

Hiring to fix a process problem

When work piles up, the instinct is to hire. But often the extra work is people re-typing between systems that don’t talk to each other: the job sheet into the invoice, the invoice into the books. Another hire buys more glue. The same team with the glue gone does more.

This week: Ask your office team to tally, for one week, every time they type something that already exists somewhere else.

Losing jobs on the clock, not on price

Owners blame price when work goes elsewhere. Often it went to whoever answered first. A Harvard Business Review study found firms that tried to reach a new enquiry within an hour were nearly seven times more likely to qualify it than firms that waited longer.

This week: Time how long your next five enquiries wait before they get a real reply.

The owner doing the cheapest work in the building

The most expensive person doing your admin is usually you. Every hour spent chasing an invoice is an hour of owner work that didn’t happen: pricing, selling, fixing what’s broken.

This week: Write down three tasks you did this week that someone at a third of your rate could have done.

Invoicing when you get round to it

Every day between finishing a job and sending the invoice is a day added to when you get paid. Late invoices get paid late, and money owed past 30 days is an interest-free loan to your customers.

This week: Send every invoice the day the job is done, and list who owes you more than 30 days.

A business that lives in one head

If one person is off for two weeks and nobody knows where things stand, the business has a single point of failure. Usually that person is the owner.

This week: Write down the five things only you, or only one person, knows how to do.

Paying for software nobody opens

Subscriptions pile up: a tool for one job last year, a trial that rolled over, two apps doing the same thing. Each is small. Together they add up.

This week: Pull the last three months of card statements, list every subscription, and ask who used each one this month.

Spotted yours? The leak check puts a number on the biggest ones, using your own figures. Two minutes, no email needed.

Find my leaks

Source for note 03: Oldroyd, McElheran and Elkington, “The Short Life of Online Sales Leads,” Harvard Business Review, March 2011.