How much is your time worth?

What is the most important task of a business owner?

As a Business Owner your focus needs to be on running the business, developing new customers and ensuring you have the delivery capability to support increasing demand. 

Sadly, many Business Owners find they are too busy doing administration tasks such as invoicing and organising to focus on the things they really need to do to build their business.  Sometimes, especially when things are tough, it can be easy to hide in the comfort zone of doing the mundane and not having to think about where they should be investing their time!

What should you be worth to your business?

Now is when you must have a very serious think about your value. Not your value today (income earned divided by the hours you worked) but what your time could be worth if used productively.

If you focussed your time on running and developing the business what difference would that make to the bottom line. If you spent two hours on the phone today instead of doing the payroll, could you bring in a £3,000 order. If you could make production 10% more efficient what is that worth to your business £6,000 per year, £60k per year?

What is your time worth to your client? The answer is not simply what you think is a reasonable rate for your time! What is the value of all your experience, your access to the manufacturer and the years of study that allows you to deliver the service? If your client has a £10,000 problem and you charge him £1,000 to fix it that is great value!

Putting the theory into perspective: 

Draw up a skills matrix of the activities you do and group them by the employee type who could do them (e.g. Accounts, IT, Administration, Business Development, Managing Director) and next to each task note how many hours a week you spend on them. Then apply an hourly rate to each employee type. The result will shock you!   Are you spending too much time on the mundane, easily delegated tasks that could be done better and quicker by someone else.  

How many people dread the end of the quarter or the year because they must do the VAT return or the tax return?  They go into a cave and spend hours on end trying to prepare something to submit, which invariably their accountant has to redo.

Delegation can be an investment in your business not a cost

If you invest £30 per hour in a part time bookkeeper or PA to free up your time how much more money would you make your business?

• Spend 8 hours a week calling potential customers or meeting with clients 
• Making sure your processes are properly defined so avoiding manufacturing or shipping errors.
• All invoices are sent on time and followed up to ensure they are paid
• Looking after yourself, as you need to be healthy to ensure the business is successful, so make sure you get regular exercise, me time and rest.
• Developing your own knowledge to help you perform better as a business owner either through reading, joining webinars or get a business coach to help you focus on what is important to your business success.
• How much more could you charge more for your services if you gained a new qualification.

Manage your task list: - The Four Ds

Do It, Delay It, Dump It or Delegate It;

Do It seems to be the ideal answer but apply caution. Is this the best time to do it or would your time be better spent elsewhere, would it be better if someone else did it or do you need to do it at all? I’ve noticed over the years that the really busy people tend to the ones who respond to emails almost instantly what is that telling me? (what?)

Delay It until a time that works better for you and is more aligned with your priorities, although you still need to consider carefully if you should be doing it at all before you find yourself working all weekend to do the things you postponed during the week.

Dump It. How often do we find ourselves doing something that does not need to be done because someone else asked us to? We can’t and don’t have to do everything so be selective.

Delegate It. But not all of us have someone to delegate to and if we use outside assistance, we will have to pay for it although as we have seen, it may be worth it!

Time is the one investment in your business you can’t recover

Think of time as an investment in your business success and use it wisely. Have someone else do the work that does not demand your key skills then use the time to develop your business to cover their costs. 

Rich people spend money to get time, poor people spend time to save money Brad Sugars