Stop automating the wrong things in your small business!

Transcript

Today we’re talking automation, but not the starry eyed, automate everything garbage you see on LinkedIn. We’re here doing the math that most people can’t be bothered with. G’, day, Mike.

Here I’m back with another episode of Lone Wolf Unleashed, the podcast for solo operators who want to work less without hiring a small army to make it happen. Ex Spelly Armors Automation isn’t magic, it’s an investment. And like any investment, most of them are not worth pursuing.

So you’re scrolling through your feed. Some productivity guru is telling you to automate your entire business. Just use Zapier, they say. Build workflows. They scream.

Meanwhile, you’re wondering if automating your monthly invoice process is worth three days of setup. Hell, here’s what nobody tells you. Most automation projects fail the basic math test. I learned this the hard way.

I spent two weeks building up a complex automation to save myself 20 minutes a month. By the time I factored in my hourly rate and the setup time, I’d basically paid $2,000 to save $100 a year. Genius move, right?

That’s when I started using a simple formula before touching any automation project. And today I’m sharing it with you because I’m tired of watching good operators waste time on automation Theater.

Here’s a formula that will save you from automation Stupidity Current State first, we start with the current state. What is it you’re trying to do? How many times are you trying to do it? And you multiply that by your hourly rate. Future state.

Then we want to do for the future state. Same thing, same calculation after automation. So the time that you take may be zero. What’s the difference? That’s your annual savings.

Then you compare that against what it’ll cost you to build or buy the automation. If you don’t see at least 30% ROI, don’t bloody do it. Let me give you a real example. You do a task 40 times a year. It takes 10 minutes each time.

That’s 400 minutes total, or about 6.7 hours if your internal rate is $250 an hour. That is the opportunity cost if you would actually be doing client work rather than building on your own systems.

And it should be at least what you’re charging properly. That task costs you 16 $75 annually.

Now, if automation cuts that to two minutes per task, you’re down to 1.3 hours annually, or $325, which means you have an annual savings of $1,350 to hit our 30% ROI threshold. You can spend up to a thousand dollars on implementation. More than that, you might want to find something else to automate. The automation.

Projects that actually move the needle aren’t the sexy ones. They’re boring, repetitive tasks you do constantly.

I’m talking about data entries between systems, invoice generation and sending client onboarding sequences, report compilation, file organization. Not the flashy stuff, the mind numbing stuff. One of my best automation wins was dead simple.

I was manually copying project details from emails into my project management system. 5 minutes per project. About 100 projects a year set up a simple automation using email passing and API calls. Cost me $200 to build.

Saves me eight hours annually. That’s a 2000% ROI. So here’s where most people start. Stuff it up. Automating edge cases. Don’t automate the thing you do twice a year.

Automate the thing you do twice a week. Trap 2 over engineering the best automation is the simplest one that works.

Stop trying to build the automation equivalent of a Swiss army knife, forgetting maintenance costs. The slick automation breaks when the API changes, when the software updates, when Mercury is in retrograde.

Or factor in ongoing costs, ongoing maintenance. Trap four, the complexity cascade. You automate one thing, which creates three new manual steps. Net result, you’re working more and not less.

Here’s the uncomfortable truth. Most automation projects fail not because the tech doesn’t work, but because people pick the wrong things to automate.

They automate the thing that annoys them the most, not the thing that costs them the most. There’s a big difference. You hate doing your monthly financial reports, so you spend three weeks building a dashboard.

But you only do reports once a month. Meanwhile, you’re manually updating client records five times a day, which takes two minutes each time. Do the math.

Five times a day, five days a week, 50 weeks a year. That’s 1250 updates annually. At two minutes each, that’s over 40 hours. At $250 an hour, that’s $10,000 in in annual cost.

But the monthly report, 12 times a year, maybe two hours each. That’s 24 hours annually or $6,000. You automated a $6,000 problem but ignored the $10,000 one. It is a classic mistake.

This is where most people go wrong. They calculate roi, get excited and immediately start building. That is the wrong move.

You need to build an automation backlog, a ranked list of opportunities based on actual ROI numbers, not your emotional attachment to specific annoyances. Here’s how it works. Calculate ROI for every repetitive task, put them in a Spreadsheet sort by ROI percentage highest first.

That’s your automation priority queue. Now here’s the key part. You don’t want to just work down the list. You look for patterns.

Maybe your top five opportunities all involve moving data between the same two systems. Suddenly building one robust integration makes more sense than five separate automations.

Or maybe three of your high ROI tasks all happen during client onboarding time to build a proper onboarding sequence instead of piecemeal fixes. The backlog shows you where real automation opportunities are. And just as importantly, it shows you what’s not worth automating.

I keep mine in a simple spreadsheet task. Name current annual cost, automation cost estimate, ROI percentage status.

When I finish one project, I look at the list and pick the next highest ROI item that makes sense to tackle. No emotional decisions, no shiny object syndrome, just math. Here’s what happens when you do this right. You start with your highest ROI automation.

Let’s say it saves you two hours a month.

That two hours you can now spend on the next automation project, which saves you another hour and a half monthly, which gives you more time for the next one. It compounds not dramatically, not overnight, but steadily.

And after a year of smart automation choices, you might have reclaimed six to eight hours weekly. That is a full workday every week. But here’s the thing. You can’t get there by automating the loudest problems.

You get there by automating the most expensive problems first, by being intentional about it. Automation isn’t going to transform your business overnight. It’s not going to solve your time management problems. It’s not going to make you rich.

What it will do, if you’re smart about it, is give you back small chunks of time that add up over months and years. The goal is not to automate everything. The goal is to automate the right things in the the right order. The things that actually matter.

The things that pass the ROI test and make it into your backlog. I built a calculator to make this dead simple. I built a calculator to make this dead simple.

You can plug in your numbers and it tells you whether to automate it or not. No guesswork, no justification gymnastics, just math. You can get that [email protected] automate that is lonewolfunleashed.com automate.

So here’s what you can do this week. Track down everything for three days. Every repetitive task, no matter how small. Use your phone’s timer, don’t guess, measure list.

Every repetitive task you do Monthly everything, even the 32nd ones that happen 50 times. Count frequency honestly. Check your calendar, your task history, your email patterns, your memory lies.

Then calculate the annual cost of each task using the formula time times frequency times your hourly rate. Okay? Time multiplied by frequency multiplied by your hourly rate. Then research automation costs for your top most expensive tasks.

Be realistic about implementation time and ongoing maintenance. You might not build this yourself, you might outsource it to a contractor and that is fine.

But you’ll need to take into account the cost of doing that and still make sure that it’s worth your while. Then you want to build your automation backlog. It’s in a spreadsheet. It’s ranked by roi. This becomes your automation roadmap.

Pick one item from the top of your list and actually research what it would take to automate it. Not planning to plan to research actual research.

Most of you will discover that your best automation opportunities aren’t the ones that annoy you the most, they’re the ones that cost you the most. The backlog will keep you honest about what actually matters. So that’s it for today. Stop automating because some thought leader told you to do so.

Start automating because the math makes sense. The math needs to math.

If you found this useful, forward it to another solo operator who’s draining an automation advice but starving for automation reality. You could have been doing a million other things, like listening to the productivity gurus lie to you about automation.

But instead you chose to hang out with me and learn about how to calculate good opportunities in your business. Until next time, work less and live more.