The engine room of the economy may be at risk of stalling, as new research reveals the weight of administration and red tape is costing small business an average of 541 hours in time, and $14,857 in money each year. This is a total annual cost of more than $20.16 billion per year for small businesses.
The In The Zone research from leading accounting-software provider Reckon, revealed that almost half of small-business owners (46 per cent) say the admin and red tape of running their business is “killing the dream” that made them start it in the first place.
The survey of more than 1300 small-business leaders investigated the benefits and barriers to achieving peak performance at work. It comes ahead of the deadline to adopt Single Touch Payroll (STP), which is the biggest compliance change for employers since the introduction of GST almost 20 years ago, and will require more frequent reporting of payroll information to the ATO.
“Most people can relate to the self-motivation idea of being “in the zone” – that is, a flow state of heightened focus, efficiency and productivity,” Reckon CEO, Sam Allert, said.
“Whether running a café, building a house or treating patients, every business owner knows the feeling and benefit of operating at their peak – they’re just held back by distractions, and worrying about things like admin, payroll and compliance that can impact work efficiency.
“Those that can streamline work for peak performance are not only more profitable, but they can invest more time and money in staff, marketing and innovation, to get ahead of the competition,” Allert added.
Getting “in the zone” has proven financial benefit
Over a fifth (22 per cent) of small-business leaders said that the pressure of admin makes it hard for them to get “in the zone” and do their best work to succeed and grow the business. Per week, many spend more time on administration and payroll (at an average of 10 or more hours) than they do operating at their peak (an average of fewer than 10 hours).
Some of the biggest barriers preventing small-business owners from achieving peak performance include having to do administrative tasks, feeling tired or stressed from work, or interruptions from phone calls and emails.
On a positive note, Reckon’s research found nine in 10 (92 per cent) respondents were actively taking steps to get “in the zone”. Almost half (46 per cent) were structuring their work day by doing things like tackling complex tasks in the morning or following a strict routine; while 42 per cent proactively eliminated distractions, including turning off their email or phone. 23 per cent are taking up mindfulness practices such as meditation or “living in the moment”.
Notably, those who achieve more time “in the zone” and make time for daily admin report spending 17 per cent less on admin and payroll expenses than their counterparts. This equates to an average saving of $3385 per year.
Entrepreneur, and CEO and Founder of The Remarkable Woman, Shivani Gopal, encourages all small- business owners to realise the financial and emotional benefits of seeking ways to get “in the zone”.
“Small changes can have big impact. This research shows that even simple steps such as moving to a more comfortable work space, using music or exercise can boost productivity and happiness – to the point of positive financial returns,” said Ms Gopal said.
Sleep sacrificed for salary reporting
To stay on top of their admin, payroll and compliance requirements, respondents are willing to make a number of sacrifices at the expense of their health and wellbeing. 84 per cent said they would make a lifestyle sacrifice because of admin workload or requirements, with 50 per cent specifically saying they would sacrifice their wellbeing, including sleep.
The average small-business owner gets approximately 4.5 hours sleep per night, far less than the recommended 7-9 hours. 13 per cent of respondents even say they do their admin and payroll before 6am.
“Health and wellbeing is a huge cultural conversation, but unfortunately it seems small-business owners are not heeding advice, or simply aren’t able to, due to the demands placed on them, which is a real concern,” Ms Gopal concluded.
This article was originally published by Inside Small Business.