3 Surefire Ways to Know if Your Business Should Pay a Salary or if a Software Subscription is Enough
Entrepreneurs start out by being ‘all things to all men’ – wearing almost every hat in the business and often feeling stretched beyond capacity. Understanding that you could be putting a ceiling on your business’s growth if it is solely reliant on you, opens your horizons to ways of growing your business, through technology and through team power.
What Are Your Options: Staff, Virtual, Software
Staff Member: The hard-working heart of the business, your team members are the primary product you are selling – whether you are in the service industry or in manufacturing. However, when you are a startup and it’s only you and your chutzpah, hiring an additional member to your team can be daunting. If you find that your office and business demands warrant a full-time position, but you don’t have a huge salary budget, then consider hiring an intern or junior staff member. It’s a win-win situation, as you offer work experience and on-the-job training for a more affordable salary than a senior team member, and the limited agreed work period means no long-term HR issues. “You will still need technology to support this function as far as time tracking and project management goes, such as Trello, Asana or BOS,” says Candace de Villiers, marketing consultant for Cape Town-based business software company QuickEasy BOS, “but your intern can now also start adding real value to this monthly salary expense by doing income-generating or -supporting tasks.”
Virtual Staff: When it comes to virtual assistants, who can be used for everything from making travel enquiries or customer service calls to sending out thank you cards to prospective clients, entrepreneurs who are too busy to handle their appointments and diaries are finding value in this scalable resource. “They become a team member who just happens to work remotely,” says Jaleh Bisharat, vice president of marketing at oDesk.com. South Africa offers solutions for every need when it comes to virtual staff members (outsourcing) – be it PA, finances, marketing or call centres. Virtual teams are strongly relational and will require a fair amount of personal investment and guidance from you in order for them to understand your brand, product and needs, especially if they are customer-facing. The bonus is, you are not paying a full-time salary when the workload doesn’t warrant it.
Software subscription: You might be a one-man-show, running your entire business through sheer determination, a bit of street-savvy, and robust software to help you remember when your next sales meeting is, when to order more stock, when to follow up on a lead, and that today is your wedding anniversary! You can source software – sometimes for free, but usually for a reasonable monthly software subscription – that can handle scheduling, time tracking, production and accounts. Remember, be as selective about choosing software as you would about hiring a new staff member. Make sure your software can grow with your business with ease, otherwise you might find you have to purchase, install and relearn a whole new system from scratch when you outgrow the initial one, which can be quite disruptive. Look for software that can integrate with other platforms, or that is fully integrated in itself and offers everything in one system. Finally, hop onto a few forums and communities to find out what the word is on the support and after-sales service so that you can better understand what you might be getting into once you subscribe.
Now that you know what your options are, how do you choose the best route for your business?
Here are three surefire ways to know if you need to go virtual or go team
1. Check Yourself
Ask yourself, “Am I getting to everything?” For entrepreneurs, stress, anxiety, and even depression at times are as familiar as their shadows. It’s a stressful job that often leaves one feeling like you’re on an emotional rollercoaster. For starters, there’s the constant threat of failure. Three out of four funded startups fail, according to research by Shikhar Ghosh, a Harvard Business School lecturer.
Rather than showing vulnerability, business owners often present what social psychiatrists call ‘impression management’, also known as “fake it till you make it.” But that trend is shifting; the startup ecosystem in South Africa, especially Cape Town, honours business owners who ‘tell it like it is’ so that all can learn, and benefit, and when needed, ask for help.
Find out: Is there a better way? If it feels like you are drowning in admin and that the stress of running your day-to-day activities is becoming toxic, then you need to consider improving your business systems – both your software and team processes. For most business owners the thought of letting go, and letting someone else take over a task or function can be incredibly daunting. “I can do it faster and better, and it will take so long to teach someone else how to do it, so I’ll just carry on doing it,” is a common excuse, but it can limit potential business growth and makes burnout is a very real possibility.
Consider using a business coach to help you look at your business with fresh eyes and help you through the transitional phases of growth. Investigate software that supports the entire operations of a business – from leads to production to stock to invoicing – to free you from the slog-work. Consider hiring a virtual PA to handle your admin so that you can free your mind to start dreaming and planning over your business again.
2. “Check, Please!” – Check Your Accounts
The fear: Cash flow, accounts, banking and invoicing are often the most stressful part of running a business for an entrepreneur. According to a recent Startup Founder Data Survey, 75% of entrepreneurs reported that cash flow is their top challenge, followed by personal financial stress – understandably so, considering that a lot of personal finance is often closely tied to a startup. 45% wished they had more expertise in finance and accounting. “The fear of being out of control of the details in the finances, or not having insight, or expertise on what to do with the business’s finances, is what keeps business owners awake, night after night,” says de Villiers.
Ask yourself, “Is there clarity in my accounts? Do I know what’s really going on?” If someone else is running your accounts for you, or you only have limited access to information, you are hamstringing your freedom to make good business decisions. “Business owners often surrender control too quickly to an expensive accountant, thinking ‘They know more, they can do it better than me,” which simply isn’t always the case if you have the right software. It can help you organise your finances and will do so in an easy-to-follow format.”
Matt Reiner. Reiner is CEO and co-founder of Wela, a financial advice company, says organising finances is the best start. “It is important to get your personal financial situation, as much as your company’s, organised. Know where all of your monies are and what they are doing. That way, you can stay focused on growing your business while removing the stress of keeping up with your personal finances.”
Software like QuickEasy BOS and FNB Instant Accounting help you get organised and are easy enough to understand and operate, without being an accountant or hiring one.
3. Check Your Return
What is the potential ROI: Most startups in South Africa are funded by the owner. Understandably, every expense is double-checked and sweated over and is expected to work as hard for the company as the owner does, and show real return. “The key is to understand what the ROI will be, rand for rand when weighing up the options of using software, a virtual assistant, or hiring a full-time employee,” says Heinrich van der Vyver, business owner and entrepreneur. “An expensive, highly-skilled individual might bring tremendous value to the business, but bring them in prematurely and they might cripple your expenses. Knowing when the business can afford to bring this person on is key.” Any investment needs to produce a measurable return – be it a KPI document measuring your team’s expected performance, or predictable cost-savings through improved efficiency across your operations cycle.
What does my business need now? Understanding the developmental stage of your business is critical in understanding what solution you need. Chat with a business coach for more insight if you are unsure. “For our business,” continues van der Vyver, “we have just never seen the need to hire a full-time accountant to do our books, as we are fortunate enough to have software that does it all for us; it chases payments, alerts me to overdue accounts, sends out bulk invoices via email, automatically imports receipts from the bank daily, and practically makes me coffee in the morning! Typically I would have to hire an accountant and a debtors clerk to do all of this for me. But instead, we pay a small monthly software subscription for the business software we use, and I direct that large salary saving towards much-needed business development.”
Finding the right balance between doing it all yourself, leaning on technology and efficiently allocating team resources is business nirvana. Take the time to investigate the best software and business systems for your business, and you won’t look back.