Opportunity Cost is the largest expense to Small Business owners!

What is the Biggest Expense for Small Business Owners?

What's up, everybody? My name is Adrian McGee, I am the systems business coach, and I help small business owners remove themselves from their business for it to scale.

This is so interesting. I'm recording a video on recording audio, and I'm going to put it everywhere so you can access all the information in the way you want. It's an exciting concept that I'm starting to utilize systems to create content across different channels.

You can record a video. And you could transform that video into a video that can go on YouTube, and you can chop it up, use it as content for Instagram, Facebook, whatever, wherever you put your content, but then also how to pull the audio out of it, and maybe put it on podcast channels. And then even put it in a blog like this!

The goal here is to put the information across various sources across the internet to make yourself a more extensive authority. So I'm testing this out. I think I got this from Neo Davis, who jumps into this a little bit, but just an interesting concept that I think most small business owners should take advantage of.

We are going to discuss "What is the biggest expense for small business owners?"

And so, when I say the biggest expense, I'm referring to opportunity costs. So technically, opportunity costs are not a direct hit to the bottom line. It's no-hit to the bottom line at all. But I identify opportunity costs as an expense because they limit a business's growth potential and revenue potential.

The cost of missed opportunities is the simple way to put it.

And so what I'm referring to is the time wasted by CEOs, people who own businesses, that are spending way too much time doing things such as checking emails, maybe invoicing, and paying bills, you know all the little tedious low-level activity.

As a CEO, you need to invest time in what is best for your company, not doing things that do not increase revenue and/or transform clients. When you have effective systems in place, you can focus on the strategy that will grow your company.

And so what I want to talk about is how we can address the fact that too many business owners are creating this large expense for their company, this large opportunity costs? Alright, so what we want to talk about first is your low-level tasks.

When a CEO spends too much time on low-level tasks, they are restricting their company's growth, right? Identifying these low-value tasks allows you to take ownership of your business so that you can grow and scale it appropriately.

I need you to understand that every minute spent and as a CEO, it matters. It matters a lot, actually. Because every minute that you are spending, checking emails every minute that you are spending, handling small customer service issues or again invoicing, really tedious tasks... items such as posting on social media.

As entrepreneurs, we don't like handling things off. We don't like other people doing things for our business, which is understandable, because no one can do it as great as we can… right? Wrong. This is where a mindset adjustment will be needed from you.

Because if you are working for the best interest of your business, you have to figure out a way to delegate tasks and automate tasks so that you can remove yourself from certain components of your business so that you can focus on more high-value activity.

So I want to give you guys a real example of me as a business owner, how I was limiting the growth of my trucking company. So in trucking, most of you guys might not be familiar. But there's something called dispatching, or basically, it is you booking the loads for your truck.

Most people will often use a low board, a universal place where you can go and book loads for your truck.

And this involves a lot of negotiations. And this is probably one of the most important activities in trucking. Because it is the way that you make money, it’s a lot of negotiation, going back and forth, doing whatever it takes to find the best load for your driver. So that you can make the most revenue while also minimizing the number of miles that your drivers are going.

There's a lot of things to take into consideration. Dispatching is not the easiest job but is one of the most important. So what was happening in trucking was I was spending a lot of time doing many administrative tasks, taking the invoices and making sure we put them up appropriately.

The first step that I took as I started to create systems for trucking.

I started to identify key processes and document them.

Essentially I began documenting and writing down step by step exactly where I was consuming most of my time in trucking. I identified a lot of these low-value tasks with the intention to delegate.

Then we hired a virtual assistant.

So by hiring a virtual assistant, I was able to hand off a lot of the tedious tasks that kept me away from doing more meaningful work, such as booking loads and all that good stuff. And so what happened was as soon as these things were handed off to the virtual assistant, we immediately started to see more revenue because I was able to spend more time focusing on generating revenue for the business. So this is just a small example, but it's a real example that I want you guys to understand because it most likely is applicable to your business as well.

Identify and focused on revenue-generating activity

Identify revenue-generating activity or high-value activity and focus more on that work and the work that you're good at, and figure out a way to delegate and remove some of the tedious tasks that are not necessarily driving the most value for your business.

Statistic Shows that

63% of business owners work more than 50 hours per week, which is more than a nine to five hours

57% work six days a week, just 1 day off per week.

21.8 hours per week doing low-value tasks that can either be automated or delegated.

I have a free guide that is called The five steps to remove yourself from your company. Feel free to access it—great information for you guys.

Okay, so I want to clarify. So I'm not saying that the other activity you're doing in your business is not worth it.

But what I want you to understand is that, without revenue, none of this happens without income; none of the activities you are focusing on can be done because you don't have any money coming in.

Identify your business's critical activity and acknowledge what you have to be present for versus what do you not have to present for? What are the essential things so that you can minimize the opportunity costs for your business? It is one of the most significant hidden expenses for your business?

What could happen if you were spending more time doing more important things for your business?

  • How much more money could you generate for your business?

  • How much more successful could your business be?

And those are the critical questions that you have to ask. So when we think about high-value activity.

We can consider things such as:

  • Strategy

  • Lead generation

  • Cold calling,

  • Sending proposals out to potential clients,

  • Emailing your current listing offers so that you can boost sales.

  • Asking your current clients for referrals.

  • Asking past clients for referrals.

  • Following up with people who decided not to book your services.

All of these things are high-value activities that you can probably spend more time on versus more tedious tasks, such as checking emails and all that good stuff.

What I want you to do is, write down a list of revenue-generating activities and make them a priority in your business.

That is the way you can put that at the forefront of the activities you are performing while also taking the low-value activity and putting it kind of on the back burner until you have the time to delegate and all that good stuff?

CEOs need systems

  • You have to create time to create a plan so that you can take over your business.

  • You have to do this with simplicity.

  • You have to figure out a way to generate revenue without your presence to create consistent results for your clients.

  • I want you to remove the confusion of your business.

Imagine you getting rid of 10 hours of work per week for your business.

Imagine what could happen. What can you do for your business with the extra 10 hours per week?

You could do a lot. If you spend 10 hours per week reaching out to pitch reaching out to potential clients, you could probably double your sales, if not triple your sales if you want to do this.

So let's say if this is your side business, what could you do if you can get additional hours of operation for your business, meaning you figured out a way to delegate some tasks so that when you are at your nine to five or when you are sleeping, your business continues to operate.

These are ways to minimize opportunity costs that many CEOs are experiencing on a day-to-day basis for their business.

When you create systems and standard operating procedures or SOPs, you put yourself in a position to grow your business. You put yourself in place to automate tasks or delegate tasks. If you bring on a virtual assistant or bring on someone on a team, you even got to know boot work to provide to them.

This is why we have to take the time to create systems for our business because it puts us in a position to grow. I know that it is not fun to create SOPs and to document your processes. But you really cannot avoid this as a CEO if you want your company to grow.

We want to minimize our opportunity costs. We want to prioritize our time because our time is a bit more valuable in our business. Because the success of our business is really driven by the time that we spend on it.

And if we are spending a lot of time doing things that are not really in the business's best interest, we are limiting the growth of the business.

There's a ton of free training available that I have for you guys.

If you liked this video, make sure you subscribe. But all I can say is get ready for a lot of great information.

This is the beginning of systems acceleration.

Our point is to help small businesses scale their business; our objective is to remove CEOs from their company to scale.

So all right, I'll talk to you guys soon.

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