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6 May 2008

Cut it out – Westpac research shows small business hung up on red tape

Red tape and administration ties up small business – and it hurts.

Results released today by Westpac's Business Bank and compiled by East and Partners show that some small businesses spend up to 20 hours a week on administration and it cuts into their personal time.

Peter Hanlon, who runs Westpac's Business Banking, said many businesses felt that lack of time and red tape were barriers to growth.

"Generally, businesses spend nearly 18 hours a week on business administration tasks, including the most onerous related to superannuation and tax/GST," he said.

"The smaller the business, the greater the time being spent on business administration tasks. In larger companies, business administration is largely automated.

"NSW small businesses spend more time on administration compared with any other State. At nearly 20 hours per week, this is two hours more than the average and nearly five hours more than Queensland businesses.

"Just over half the businesses surveyed felt that admin cut into their personal time, but this varied depending on the size of the business.

"At the larger corporate end, less than 18 per cent felt that administration tasks cut into their free time.

"However, for small business owners, who tend to do more of the administration themselves, almost three quarters believed they gave up their relaxation and personal time to complete admin tasks for their business."

He said this demonstrated businesses could lose money and opportunities, because they were tied up doing simple, but time consuming, admin.

Tips to reduce administration time

1. Review your business to see if you have the most efficient database and processes in place – are you using accounting and business reporting software to its full potential, or 'double dipping' by duplicating reporting or processes?
2. Designate the time to handle difficult activities – the 'one touch' rule when you manage red tape is essential.
3. Don't be afraid to ask colleagues or peers for their blueprint or template for repeat activities - sharing best practice and tools will streamline tasks.
4. Educate staff about managing red tape – making sure you have staff with the right skill set will enable you to delegate tasks with confidence.
5. Can an external expert help? Hiring a financial, legal or HR expert to carry out complicated or time consuming tasks will ensure that red tape is well managed and that the creative and productive aspects of your business doesn't get bogged down.
6. Document tasks and prioritise with timelines so anyone can understand it - so you don't have to re-create new processes every time and making it much easier for you to delegate or train new staff.
7. Do as much online banking or use systems or processes for your payroll and super as possible. It saves time and money.