We all know the hackneyed old cliche, Time is Money. But how much do you feel your time is worth ?
For some business owners, that is quite an easy question to answer. Maybe you’re in a small business where you charge your time to your customers – you may be a contractor, or provide business or consumer services – so you know what hourly rate you want to earn. For others, where your business is selling or making products for example, valuing time is quite a bit more challenging.
Whatever your situation, answering the question is never as straightforward as it seems. Just for example, take last month. How many hours did you spend in the business? And how much more money ended up hitting your personal bank account by the end of the month compared with the start.? Divide this by the number of hours you worked. How does that compare with what you think your hourly rate should be?
For a start, what are you measuring? Turnover or Profit? Secondly, how many truly productive hours did you work, as opposed to the number of hours you spent in the business? And thirdly, how do you judge the value of the hours you spent working ON the business, rather than IN the business?
Working with a business owner client of mine not long ago, we worked out what the value was of her investing her time in attending a networking group. By looking at the numbers, we worked out that on average she was investing 12 hours each month with the group, with a further 6 hours following up and quoting opportunities that came from that activity. On average she was generating £1,500 of profit for her business for the next 12 months each month from those leads. So her ‘hourly rate’ for her networking activity was over £83 per hour, whereas she was charging out labour at £50 per hour.
So what was the more profitable use of her time? Networking or selling, or ‘doing the work’ ?
By signing up for a free month trial of Small Business Masterclass, you too could be finding hundreds of different ways of making your time earn you more profit.
Graeme Crosbie – masterclass.biz