By Chester Dimairho
Last week we looked at the general underlying principle of the labour contract. It’s a very emotive issue and must be handled with care. For the sake of our analysis, I am going to consider the mechanical side of things before we deal with the emotional side of things.
Basically, being a business owner and employer puts you in a position where you can leverage other people’s time. Essentially you get more done in a day than you would alone. The more the team members, the more you get done. Walmart, for example, has approximately 2 million employees. Assuming that everyone puts in an eight-hour work shift a day, this translates to 16 million hours of productivity a day. What Wal-Mart achieves in one day will be achieved by an individual who works for approximately 1,826 years non-stop, as in no sleeping and no breaks in between whatsoever. To put things in perspective, an individual who is 60 years old would have worked for approximately 8 years. This is when you aggregate the hours of continuous work. Already from this brief analysis, you can see that it makes sense to grow your team if you want to achieve more. However, I am not insinuating that you go on a recruitment blitz to add as many employees as possible. What I am advocating for is for you to grow your business and then you engage more staff who will be 100% occupied during the time they are at work for you to see the real benefit. Having more staff members also increases opportunities for you to segregate duties. This is very important when you begin to seek funding. The providers of finance love to see a business that is not 100% reliant on the founder. I have a banker friend who told me that so many funding proposals are turned down because of “key man” risk. He told me that some businesses will be having sufficient cash flows and acceptable collateral, but over-reliance on the founder leads to the proposal being rejected. One way of assessing if you have been able to get the right people in your team and capacitated them is by you not showing up for a continuous period of 6 months. If your business closes shop during that period, you have a job, not a business. A business grows with or without you. I do not mean to insult you, but I’m just saying things as they are. That is why when you look for funding you don’t get it. Providers of finance are not interested in funding jobs; they want to fund businesses. At the same time, do not blindly rush to employ more staff without a clear-cut strategy. Also do not lose sight of what my articles are all about. The underlying objective is for you to structure your business properly and attract the funding you need to take you to the next level. Until next week, “We are what we repeatedly do. Excellence, then, is not an act, but a habit – Aristotle”.
“Chester Dimairho is a fellow of the Association of Chartered Certified Accountants, a Public Auditor and an Associate Member of the Institute of Directors. He founded his audit firm in 2020, and the firm already has two international accreditations. He is currently serving as a non-executive director to the board of Chengetedzai Depository Company. The views expressed in this article are his personal views and should not be treated as professional advice. He can be contacted at email@example.com”