Working Hard Versus Working Smart

There may have been a time when an honest days hard work paid off in and of itself, but as we have progressed from the Industrial Age to the Information Age working hard without working smart is now a quick path to ruin for a small business. Imagine keeping your books or doing your tax return by hand. You could work plenty hard and skillfully and spend many hours more on the tasks than you would by working with a computer. We are now in the “Lazy Man’s” era of business where it pays to try and offload as much of your work as you can to all the wonderful technology that is currently available. Labor is expensive, be it your employee’s or your own. Let’s say an hour of labor is worth $40 (including overhead and benefits) and you can save 10 hours of labor a month with a new piece of software. If that software costs less than $4,800 a year ($40 x 10 hours/month x 12 months) then you are coming out ahead on the deal. Say the software costs $800. That’s a potential yearly savings of $4,000 or 40 hours of labor a year. If you make a 100% mark up on your sales, you would have to increase revenue by $8,000 to have the same impact.

You should use a similar logic to evaluate your productivity or that of your employees. Don’t just look at how hard you or your employee’s are working, look at how productive you (or they) are. You can create a simple productivity metric for your organization by taking total revenues divided by total labor hours worked. Now look for ways to increase that number – can you make a system more efficient, add a piece of equipment or software, change the type of product/service you are working, better train your people, change your working space… you get the idea. Ask each of the people in your business to think of how they could make their job go faster and easier and you are likely to come up with some ideas which will help the business do more with less.

Pain is the body’s way of telling you that you need to do something to take the stress off. Working the painful part even harder isn’t the solution to the pain. Similarly, feeling stressed in business is a signal you need to work smarter, not harder.

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