From the bedroom of his college apartment, Mike Schmidt started his own business, AnchorWave Internet Solutions, in January of 2003.  What began as a way to earn extra income through college became a full-time entrepreneurial endeavor, upon graduation.  Schmidt chuckles as he recalls bringing clients over to his bedroom apartment to get progress updates and see the finished product of the websites that he had developed. 

Since then, Schmidt’s business has come a long ways and is now housed in a much larger office suite.  With a staff of four, AnchorWave is again poised for another year of solid growth and has built a strong reputation for their work over the past several years.  Of course, AnchorWave’s success hasn’t come without its share of challenges along the way. 

Schmidt attributes many of the tough lessons he’s learned through the growth process (and still learns each day) to the relationship between the technician, manager and the entrepreneur as discussed in Michael Gerber’s book, “E-Myth Revisited.”  Schmidt read Gerber’s book several years ago and, as a young entrepreneur, it completely changed his outlook on his business and made his re-look at his entire business model. 

For Schmidt, technology always came easy; so starting up a website design business seemed like a natural fit.  He comments that, “early on I had dreams of building a business around my skills, but never gave much thought to the idea that I needed to spend my time working ‘on’ the business instead of ‘in’ it.” 

As AnchorWave grew, Schmidt began outsourcing different parts of the production process to help him handle the increased demand for his services.  This approach worked for some time, but it was when Schmidt landed a very large project that he decided to hire his first employee, a programmer.  However, even with the help of his own employee and other independent contractors to get the production work out, Schmidt still found himself looking for opportunities to perform the work himself.  He figured this approach would drive more profit to his firm.  He neglected to fully understand just how valuable his time really was and the opportunity cost of doing the work himself.  Schmidt now acknowledges that his time would have been far more wisely spent seeking out new clients and gaining expanded wallet share from his current client base. 

This is mistake we often see with small business owners.  The urge to do the work themselves is strong and they truly don’t consider the revenue and profit opportunities they’re likely missing by not having someone else do the work.  As a business owner, consider how much your time is worth, in terms of dollars/hour?  Now think about the work you find yourself doing now in your business.  How much (dollars/hour) could you pay to have someone else do that work?  If you’re truly honest in your analysis, you’ll likely find some staggering differences.  No doubt, it’s a leap of faith for many – but one that must be really assessed if you truly want business growth. 

It didn’t take long for Schmidt to apply his new found learning to other important areas of his business.  He unloaded several key tasks from his plate by hiring a project manager, enabling Schmidt to focus more on sales.  He recently outsourced his bookkeeping work, saving him countless hours of frustration and mistakes, while increasing cash flow. 

AnchorWave also recently addressed another key frustration area – server management.    Previously, AnchorWave managed their own servers and backups locally.  However, after several outages and frustrations, Schmidt decided to outsource this function to an outside company specializing in server management.  The annual investment is significant, but Schmidt has determined the investment benefits far surpass the “lost sleep” and downtime issues previously experienced, in addition to having the added benefit of a 24/7 support team. 

The overriding lesson here for business owners is to step back and ask, “Where am I spending my time and is it the most profitable use of my time?”  From there, determine what you need to stop doing and choose the tasks that you can outsource or delegate to others in your business vs. you doing them yourself. 

Back to Articles