Each person has only a certain amount of time per day in which productive work can be done. One’s own productivity is limited by time constraints. On the other hand, there is a multitude of tasks and activities that can or must be completed by the entrepreneur.
One of the biggest challenges for home business entrepreneurs is a variety of tasks. A distinction must be made between the core task and the associated sub-services, i.e. the core service that the entrepreneur provides for his customers.
In addition, there are the tasks that are necessary to operate the business, such as accounting, customer management, office management, planning, budgets, etc.
As a home business entrepreneur, core tasks and supplemental tasks intermingle on a regular basis. If the supplementary tasks take up more time than the core tasks, it can become problematic. Then the entrepreneur has too little time to take care of his core business.
This is where the magic words “effectiveness” and “efficiency” comes into play.
Effectiveness and Efficiency
What do they mean?
Quite simply, effectiveness means doing the right things. Focus on the essential.
Efficiency means doing things right. This means working faster or more resource-efficiently, for example.
In the following article, effectiveness and efficiency will be discussed in order to give the home business entrepreneur inputs and opportunities to further optimize his business.
Focus on the essential – The core of effectiveness
How can you find out what the right things are? What are the really essential things to do?
This thought process can be simplified with the help of simple logic. One should consider two dimensions for this:
Important – unimportant
Here it is necessary to distinguish how important is the matter. Does it have a high financial impact? Can I gain a large new customer as a result? Will I possibly lose a large order?
It is important to be clear about the importance of the matter for a business and then come to an assessment. It can be helpful to use a scale, e.g. from 1- 10. 1 = unimportant things, 10 = very important things.
All pending activities can then be assigned a scale value, which is an important basis for decision-making.
- Answering question from customer X about quote = 8
- Compiling receipts for annual financial statements = 4
- Answering question about additional insurance = 3
Urgent – not urgent
In this dimension, it is important to assess how urgent a matter is. If, for example, something has to be done within a certain period of time, it becomes highly urgent shortly before the deadline expires. If a matter still has a few weeks to go, even if it is very important, then it is currently not yet urgent and processing can still be postponed.
Again, it is recommended to use a scale of 1 – 10, 1 = not urgent 10= very urgent.
- Submitting the tax return tomorrow by 1pm = 10
- Preparing an offer for key customer Y within the next 7 days = 5
- Preparation of annual financial statements within the next 6 months = 1
So what are the right things to do? Clearly, the matters that are important and urgent. The activities that have a high value in the dimension “important – unimportant” and the dimension “urgent – not urgent”.
With the help of these dimensions, a clear picture arises very fast, which things must be settled by the entrepreneur first and with high priority. It then also becomes clear which things can be postponed longer and which things need to be dealt with in the medium term.
In the chart above, this results in the priorities for the individual tasks, from the highest priority to low priority. This then also directly answers the question of what are the essential things that are to be carried out by the home business owner.
Once the question of priorities has been clarified, the next step is to decide whether the home business owner should carry out the tasks himself, seek assistance or even outsource them completely. This is where efficiency comes into play.
Delegation & Automation – Core elements of efficiency
Delegation and Automation are the core components of efficiency. For high efficiency, it is important to find the right mix for the home business entrepreneur and their productivity.
When it comes to delegation, the question must be answered whether this task must be done by the Home Business entrepreneur himself or whether there is someone else who can do it better and faster.
If there is someone else who can do this task faster and better because he has more experience or competence in this area, then it often makes sense to delegate this task.
Especially if it is a supporting task, such as accounting or tax matters.
Of course, as an entrepreneur I can familiarize myself with many tasks and build up expertise, but the most important question is, what is my business about?
When it comes to delegation, the question must be answered whether this task must be done by the Home Business Entrepreneur himself or whether there is someone else who can do it better and faster, and has better productivity.
As a basic rule, the entrepreneur should always focus on the tasks that are the core of his business. For example, if the core activity of the entrepreneur in the production of children’s clothes is the design process, then the focus of the work should be on this activity and the production of the clothes should be outsourced.
The same is true for an IT consultant, if he provides high quality remote consulting, then he should focus on the consulting task and outsource other complementary activities.
As a home business entrepreneur, it is extremely important to focus on the core mission of your business. Because that is what makes you stand out, where you get pleasure from and why you do it. All other things should be delegated if possible.
Once the decision has been made to have a task done by the home business owner, the question of “how to do it” needs to be answered.
Automation can help productivity be done faster and easier. With the help of technology, productivity can be increased enormously. Processes that otherwise often take several hours can be completed in just a few minutes with the right automation. Basically, automate recurring tasks, such as sending emails, creating reports, or managing customer data.
The following are some automation options that a home business owner may be able to take the advantage.
Use a CRM system
A CRM system can help you organize and track your customer information. Managing customer data in a central system saves a lot of time in the long run. It also provides a centralized view of the customer, which can be very important for further business decisions. HubSpot or Salesforce are great CRMs for a small business.
Create a schedule
Create a schedule to make sure you complete your tasks on time. A schedule can often be a great help to plan the tasks at hand. Once the order of tasks has been determined with the help of the above priority setting, it is often a great help to schedule them. A schedule, whether via software or via a paper document, visualizes the individual action lines and quickly shows bottlenecks and challenges.
Use a project management tool
Use a project management tool to track and organize your tasks. A project management tool is a great help to visualize the individual projects. Which tasks must be performed by whom and by when.
Use an accounting program
Use an accounting program to manage and track your finances. Such a program can help scan and digitize receipts. This makes it much easier to send and process them to service managers, such as tax advisors.
It also helps to keep track of your finances, accounting transactions and liquidity. An accounting program is a great help to keep track of finances, bookings and receipts. After a setup effort, it usually represents a great help for the home entrepreneur after a short time.
Create a to-do list
Create a to-do list to ensure you complete your tasks on time. To-do lists can be a good way to keep things in order. It is often the case that in certain situations it occurs to you that something still needs to be done.
Or while you are working on something, a follow-up activity comes up that you have to keep in mind. With the help of a to-do list, for example on your cell phone or a small notepad, you can keep to-do lists quickly and easily.
Use an online calendar app
Use an online calendar app to track and organize your appointments. With the help of a calendar app, appointments can be planned clearly, easily and quickly. The home entrepreneur has a transparent picture of his calendar at all times.
In addition, with the help of such an app, appointments can be coordinated with others. Customers can choose a free time slot when accessing the app, which have been previously defined by the entrepreneur. This often saves a lot of time, and time-consuming coordination of appointments with customers and partners can be shortened considerably increasing productivity.
Use of AI (Artificial Intelligence)
With the help of AI, many activities can be performed more efficiently. AI is increasingly being seamlessly integrated into many software programs and helps with a variety of tasks. Marketing activities, writing tasks, creating presentations, creating videos or research activities are simplified and accelerated with the help of AI.
An AI software overview shows how many application areas there already are, which can be relevant for the home business entrepreneur. AI is one of the most important technology trends of the next years, which will also be relevant for every home business.
Create a document management system
Create a document management system to organize and track your documents. Such a system is a great help to manage all documents in one place. It allows access from different devices. Also, multiple users can access shared documents on demand.
Use an online meeting tool
Use an online meeting tool to make meetings more efficient. Online tools make it quick and easy to organize meetings to coordinate and discuss things.
Records of the meetings or automatized meeting minutes can be secured very easily with the help of online meeting tools.
The time-consuming creation of meeting minutes is no longer necessary. Presentations via online meeting tools are a very easy way to provide information in the appropriate form to a relevant group of people.
For running a home-based business, increasing one’s productivity is of great importance. Due to one’s limited time, the multitude of tasks at hand, and also the need to focus on one’s core performance, this has become an imperative. High effectiveness by doing the right things as a home business owner is the foundation of any successful small business. Building on that, the key is to get things done efficiently. Delegation and automation play an important role in this. With these two elements, the entrepreneur is left with more time and capacity to take care of the essential factors of their home business.
In today’s world, millions of home-based entrepreneurs compete with their products and services over the Internet. The entrepreneur who manages to provide a valuable core service to their customers with the least amount of effort will be successful in the long run.
Productivity in home business will continue to grow in importance over the next few years. Numerous important technology trends such as AI, software-as-service and blockchain support the development. Just as large companies have been able to increase their productivity in recent decades, home business entrepreneurs will have to do the same in the future.
Martin Bernecker has been successfully working in enterprise software business for more than 18 years. He has built and successfully managed several companies from scratch. In his blog martinbern.com he introduces people to technology trends that will influence our lives in the coming years, so that everyone can benefit from them. He also advises people on how to improve productivity in business matters.