Faced with an ever-increasing workload, a man talked to his accountant about stepping up from being a one-man work-at-home business to employing some staff. It would, he thought, ease the pressure.
The accountant, a money management expert par excellence, had other ideas, and was blunt in his reply. All he said was: “The next time you say that, I shall put you in a cupboard and beat you with a broom handle until you change your mind.”
The reasoning behind his brutal assessment of the proposal was simple. Not only was the extra work insufficient to support another employee long-term, but the business model was a poor fit. The business was home-based, and simply didn’t have the space for another employee, long or short term. What’s more, he hadn’t considered the expense management dimension, but had been looking from only a workload perspective.
Hiring staff for a spike in workload is always going to be a bad idea. It will solve short-term problems, but will bring with it new headaches of its own, starting with the recruitment process, and going on to all of the background commitment involved in employment law.
The more effective option
Far better, said the accountant, to seek the help of other self-employed people to help lift the short-term burden, which would have a dual benefit. Firstly, the pressure would be eased, and secondly, a channel would have opened for work to flow in the other direction, thereby making at least two companies more profitable with no extra legislative and HR burden.
And so it proved. But the same thinking is equally effective is sorting the wheat from the chaff for all business ideas. Every individual has ideas; the clever part is in which deserve to be called good, and which deserve to be ditched.
A further illustration of this is in the TV ‘reality’ show The Apprentice, where the sharing of an idea comes under intense scrutiny. Certainly the programmes are voyeuristic, and intended to be good television, but the principle holds true. What the candidate thought was a sound and solid foundation turns out to be anything but, through hyperbole or simply plain misunderstanding of the numbers.
Where to get a second opinion
Examining ideas through the prism of someone else’s perception makes you acutely aware of which are good, and should be followed up. But where to get the right kind of opinion? Don’t ask family members, by and large. Their view is likely to be skewed, because they’re family, for one thing. For another, they may well not have the right kind of business experience.
Accountants are good people to ask. These days the right one is much more than a number crunching expense manager, but will have lots of sound advice they’d be willing to share. It’s in their own interest, as well as yours, to see that your business succeeds.
And what to do next
And when you’ve got the advice and acted upon it, remember that measuring the success of your idea is vital. Never forget either that the reason you’re in business is to generate income to sustain your lifestyle, so make use of one of the money management apps in common use today. Naturally, we’d recommend you to use an intuitive expense manager app that will let you see where you’re spending, and to initiate controls if that’s what’s required.