Wednesday, February 27, 2008

Use the power of "leverage"

One of the lessons that I have learned over and over again is to try whereever possible to use the power of leverage. In simple terms leverage turns a small amount of inputted energy into a large amount of outputted energy. You can use systems to leverage your energy e.g. think of the difference between handwriting 500 letters and writing one e mail and sending it to 500 different e mail addresses (I don't advocate spam). You can use people to leverage your power and actions. Think of the difference between an individual fighting against the invading mongol hoards and one great leader marshalling an army to fight the invading hoards (neither do I advocate war!).

The one thing you cannot leverage is your time. Your time is your time and you cannot buy another moment. Not a morose thought, that's just the way it is. But that thought should energise you to use your powers of leverage to utilise your time as best and as efficiently as you can.

One of the (many many) mistakes of which I have been particularly guilty is the thought "I can do it all". The truth is yes I can - but the question is why should I?

This is particularly true in regard to "small" jobs like say payroll - "why should I pay my accountant €100 per month to process my small salary run, I can buy a small payroll package and do it myself and save the €1,200 per annum". A clear case of "penny wise and pound foolish". The job is "small" untill it goes wrong and go wrong it surely will - because you didn't really know what you were doing in the first place.

Use exteral expertise. Let that expertise do what they are good at whilst you do what you are good at. Once you have spent a wasted 4 hours pulling your hair out, reading the manual, bashing your head off the wall trying to resolve that problem of your own creation which you know nothing about. At that moment you'ld gladly pay any payroll, bookkeeper, IT persons the full annual fee to resolve it.What have you achieved - high blood pressure. Save your time, use it to leverage more sales, use it to think, use it to relax, use it to come up with the brilliant plan to double your turnover, whatever but don't waste your time.

This was brought home to me again today by my accountant who recounted how a new client showed him how he had run his own payroll program over the previous three years. Unfortunately he had incorrectly coded himself as a employee rather than director and had subsequently overpaid the Revenue by over €7,500 per annum. Of course he'll get it back eventually, but wouldn't it have been better off in his pocket in the first place?

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