“We’ve marshaled every instrument of American power, and we’ve unleashed our most potent weapon of all: the courage of the American people.”
These were the words of President Trump on Thursday, April 16, when he announced a Covid-19 three-phase plan to reopen small businesses. In his task force briefing, President Trump also praised Americans’ “shared national sacrifice to halt the spread of this disease…” He went on to say, “We took the greatest economy in the history of the world and we closed it in order to win this war.” The President’s plan, called “Opening Up America Again” provides federal guidelines to reopen small businesses at the discretion of state Governors. We know that small business owners will be anxious to get back to work, but Covid-19 has taught us now more than ever, that business owners need to be prepared for unexpected challenges. A great starting point for companies with remote employees is to adopt the most important best business practice.
Prepare For The Unexpected
A report by JPMorgan Chase & Co. found that the median small business has 27 cash buffer days in reserves. In contrast, 25% of small businesses have less than 13 days of cash buffer. The point is obvious – any interruptions to the normal flow of commerce is detrimental to most small businesses. So, what can small business owners do to be sustainable, and beyond that be prepared for unexpected challenges? Evaluate day-to-day operations – identify inefficient processes and replace them with best business practices.
Do You Know the Largest Inefficiency in Your Business?
Small businesses lose 20 to 30 percent in revenue every year due to inefficiencies. If you own a service business with remote employees, labor cost is your highest expense – possibly up to 50% or more. Bottom line – labor inefficiencies can wipe out a service businesses’ profits. Consequently, the most damaging and largest inefficiency in any service business with remote employees is the use of handwritten timesheets. This one business practice will wreck profit margins by 4%, 6% or maybe 10% or more – which is monumental when most service industries struggle for a 10% profit margin. In fact, studies done by the American Payroll Association and the Robert Half Agency show that time theft is close to 10 minutes a day per employee. Not only that, but we have also reported before that human error with handwritten timesheets can cost your company 1-8% of its annual gross payroll. Then count your admins time processing payroll – at least 5-6 minutes per handwritten timesheet each pay period. If you do nothing else as a business you should ensure efficiency in capturing accurate labor hours!
Implement This One Best Business Practice
Use this downtime now to prepare your business for getting back to work. The most important item on your to-do list is to implement a time card app system. It is absolutely the most vital best business practice for service companies with remote employees. The accurate clock in, clock out times recorded for your employees and the admin time saved processing payroll will directly boost your bottom line. As you can see, capturing the correct time with a time clock app is just one reason of many to abandon handwritten timesheets – but that one change alone could save your business.
While a great deal of uncertainty remains, small business owners can at least begin to prepare for reopening their businesses. The world is different now. Covid-19 has shaken us to the core. However, as President Trump declared, the courage of the American people is our most potent weapon. And the most challenging times in history have forged the greatest ingenuity and innovations among Americans. Now small business owners need to take bold, yet wise action to adopt best business practices that can help them thrive. We would like to help.
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About Chronotek
The most dependable employee timesheet and scheduling software available. For over 20 years, Chronotek has set the standard in time tracking by providing businesses with every tool needed to manage a remote workforce, reduce time card waste, and simplify the payroll process. No matter if employees are working from the field, at the office or from home… Chronotek has the solution!