Our Visitor Economy Adviser Gill Harvey explains why "DIY" isn't always the best approach when it comes to your business.
DIY and business
The idea of “do it yourself” — also known as DIY — emerged after World War II. Sensing a new trend, magazines began to teach homeowners how to transform their homes without experienced (and expensive) tradespeople.
Just as DIY changed how people took on skilled tasks to improve their home, the Information Age—which began in the 1970s, swept rapidly across the world in the 1980s, and really took hold when the masses began using the Internet in the 1990s—has changed how businesses deliver their products and services. This is especially true for small businesses, whose owners tend to favour a DIY approach.
Most business owners are lured in by the ease of setting up and starting a business. It takes just minutes and very little investment to register a limited company, so many entrepreneurs start from a base position of zero with the intention to recruit relevant staff as the business and profits grow, neglecting to cost in these elements in their financial forecasting.
The Problem with DIY
However, there are three big problems with the DIY approach. Each problem can stall a business’s success, but added together these problems can contribute to total business failure. How can you avoid?
We naturally prioritise tasks we love and neglect those we do not, meaning some important tasks never get done.
Have you ever noticed how you turn first to tasks you love and are good at? Me too. I hate, with a passion, anything to do with sales. I can just about bear finance. However, I love creating knowledge pieces, teaching, coaching, and solving problems. In the early days of my business, urgent (but less enjoyable) tasks would start at the top of my to-do list and inevitably end up slipping down the list and didn’t get done. The next day, they would be even more urgent. The result? Poor sales, I had some great courses, but no one knew about them.
Once I identified the problem, I set to work trying to find a solution…and started reading. I decided to ‘Eat that Frog,’ a phrase coined by author Brian Tracy, which suggests that the most productive way to solve this problem is by identifying the most important (and often hardest) task and not touching anything else until this task is complete. Using this approach, I did manage—slowly but surely—to tick these harder, less enjoyable, but still incredibly important tasks off of my to-do list.
We cannot make ourselves experts at everything and run a business too.
It's simply not possible to be an expert in every area of business. Being a business consultant, my training and qualifications cover all business areas. However, unless I am able to maintain the level of intensity in gaining new knowledge about each discipline (finance, sales, marketing, HR, IT, procurement, etc.) every year, my knowledge will become outdated.
This ‘do it all’ approach is arguably worse than having done nothing. It would take me twice as long to do certain tasks as it would take an expert who has all the tools and knowledge in place. Plus, my output is unlikely to be as effective as an expert’s, rendering my efforts a sort of halfway house. Precious time is diverted from my product, at which I know I excel. I've created a lose-lose.
We DIY so much that our businesses become expensive hobbies.
Some business owners fool themselves into thinking they have a successful business when, really, if they were to pay themselves the actual value of, say, undertaking the monthly accounting, marketing, and procurement practices, the business would probably be running at a deficit. It has become an expensive hobby, taking up a lot of your time but not becoming a profitable business. How do I know this? I've been there.
When helping business owners compile their three-to-five-year financial forecasts, I might point out that they have not costed in for cleaners or property maintenance. More often than not, I hear, ‘That’s okay, I do that myself.’ When I ask them where their wages are for doing these tasks, they look at me as though I am mad. When I remind them that they wouldn’t clean someone else’s property for nothing, it becomes uncomfortable because they realise that this isn’t actually a business but more of a side line income generator.
This is one of the unfortunate reasons many businesses don’t prepare financial forecasts. If we take this analogy back to home DIY, this is the equivalent of costing for a new kitchen but not for the electricians and plumbers to fit it. Either everything comes to a standstill or the result is shoddy, with leaking pipes and electrical cables hanging loose. Is that what we want for our businesses?
To DIY or Not to DIY?
The trick to deciding when to DIY or bring in an expert comes with noticing which parts of the business are being neglected and where your skills and passions lie and can be utilised to the best effect. To do this, first acknowledge the different elements that must be adopted in order to operate effectively.
This is normally tackled as part of a business plan, which is essentially the bible for your business. To find out more about how you can create your bible, click here and we’ll walk you through the process.
Every business is made up of the same six elements to provide their products or services, as shown in the table below.
Product or service
You will be heavily involved and invested in the first column: the actual product or service. This is what compelled you into business in the first place. However, you will need to continue adopting fresh ideas to ensure growth and success. Stagnation is not an option.
Raw components
You are also likely to be heavily invested in the ‘ingredients’ needed for your product or service. At some point, if the business is to grow, however, it is likely that you will need to supplement your workforce and adopt different procurement approaches to cope with the growing demand for your product or service. You may hear this concept referred to as a ‘variable cost business plan.’
Production/manufacturing
In the early stages, you are likely to adopt the best equipment, machinery, building, etc. that you can afford to deliver the product or service in the best way. It is important to remember, though, that as demand grows or as the product changes to meet new trends, the infrastructure needed to support these changes will also grow. You will most likely need support to ensure that the most effective processes and practices are implemented and that your business is continuously moving with the times.
Marketing and communications
The reality for most of us is that marketing is a specialist subject. Are you fully conversant with Instagram, Facebook, Twitter, LinkedIn, TikTok, and Pinterest? Do most business owners know what type of content should go on which platform? I think not. Creating and repurposing valuable content can also be quite time-consuming. While you need to ensure your brand is being authentically represented and that messages are consistent with your style and values, this area should always be managed, at least in part, by a marketing professional.
Distribution
In the early days of a business, selling the actual product usually falls to the leader of the business. After all, people buy people. There are a number of stages such as finding leads, making initial connections, and building profiles, that can be easily outsourced, something to take advantage of, leaving you freed up to close the deal.
Profitability
Of course, this all has to be profitable. We don't want to go back to that expensive hobby.
In the early days, it’s perfectly possible for a business owners to manage their own accounts using cost-effective online software. For limited companies, an accountant at year-end ensures HMRC is satisfied with the ledgers. As the business progresses, you should begin asking yourselves additional questions. Is there an objective pair of eyes available to check whether businesses purchases are good value? Could the business benefit by investing? Are there advantages the business is missing? A professional will know to look for these opportunities in a way that you may be too close to see.
It isn’t always easy to recognise when it’s time to bring in the experts, but by costing these factors upfront in a multi-year financial forecast, you will be able to assess the viability of its product or service given the sales price it will need to charge to turn a profit.
Outsourcing vs. Recruitment
Most of us have a traditional view of employment and shy away from bringing other people in assuming it will be too expensive, but this needn’t be the case. There are many approaches you can consider in order to support you in the areas that sit outside your natural ability and interest.
Some things you should consider when considering outsourcing or recruitment:
Unless the quantity of time needed by any one person equates to more than 16-20 hours per week, every week, you should consider outsourcing the service rather than employing a permanent staff member.
Recruiting permanent staff adds other responsibilities to your day with varied contractual responsibilities and additional employment, pension, and insurance costs for your business. This is without even considering the training, development, and day-to-day management involved in hiring permanent staff members.
You may have heard the term ‘zero hours contract,’ which is a contract in which the employer is not required to give any certain number of hours per week to their employee. This does give you some flexibility, but you should know that even those on zero hours contracts are entitled to statutory employment rights, which includes annual leave, rest breaks, and the national minimum wage.
If you find you do have a regular need for support in a role that is in your area of specialism, you might consider an apprenticeship scheme in which you share your expertise with someone interested in learning your trade. This enables you to bring someone into the business on a cost-effective basis who receives formal training and hands-on experience.
Don’t underestimate the time required to look after an apprentice, however. Finding relevant and challenging tasks that will help them develop can benefit you, but teaching them still requires your time and input.
Where specialist knowledge would be an advantage—such as HR, procurement, IT, marketing, sales, and finance—you could consider:
Entering into a contractual arrangement with an independent specialist. More and more qualified people have elected to leave the world of traditional employment and set up their own businesses, enabling them to share their expertise with wider organisations and enjoy greater flexibility.
The costs involved with an independent specialist will often be lower than recruiting a large firm as the individuals don’t have the same overheads.
You will also most likely receive a more personal service because the independent specialist will be more invested in your organisation.
Thanks to the advent of technology, contractors you hire don’t even need to be local, although of course there are arguments in favour of supporting the local economy. With local contractors also come the benefit of having the occasional face-to-face meeting instead of the now familiar Zoom meeting.
Don’t discount the services of freelancers, who rarely engage in longer-term contracts but rather spread their net, often working on more than one job at a time. Freelancers can be found in a number of places, such as:
Social media platforms often have groups for freelance specialists. Certainly, LinkedIn and Facebook have groups, and it’s easy to search within these for people to hire for a one-off job.
Freelancer platforms such as Fiverr have a mass of suppliers who bid for work that you need completing. These are often very cost-effective.
- You should note that you will usually have limited engagement with the freelancer in these situations. Everything is communicated via the platform, and, given the cultural differences sometimes involved, as these workers can span the globe, this can lead to miscommunication and misunderstandings, so this route may not be for everyone or suited to every type of service.
- Virtual assistant agencies such as iWorker that act as a conduit for professionals around the world needing support with short- and medium-term contracts for specific projects.
- You can be assured of the qualifications of these workers as they are all vetted by the agency, but the rates are often lower than you might pay in the UK due to the cost of living in their local environments. Rather than feeling as though you’re exploiting them, this is actually a way to support qualified workers who may struggle to find work within their own local economies.
For business owners, there will always be an element of DIY to your work and to each day, but the key is knowing when this is appropriate for your business and where to draw the line so that you not only get to do what you love but also profit from it and live the life you love too.
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