How Much Is Your Time Worth?
It's an old cliche that we all know and understand, but to what extent do you really apply it in your business? Be honest with yourself, how much is your time worth?
As a business owner, you can't afford to spend your precious time doing $10/hr work when your hourly output needs to be $50/hr in order to turn a profit with your company each week. That's when opportunity management, having a productivity system with regimented rules in place and being willing to hire help comes into play.
For example, do you make a phone call when an email would do just fine? Sure, there's something to be said for spending a little extra time building rapport with your clients, but phone calls often stretch out into 10, 20, 30 minutes when taking five minutes to craft an email would have gotten the job done. Remember, your clients and strategic partners are busy too already. They may appreciate the efficiency of an email instead of a phone call.
On the other hand, are you an "email person," who insists on going back and forth via email, when a phone call is clearly necessary to iron out the issue? If something is going to require a lot of back-and-forth, a phone call may be more efficient. If you're trying to come to an agreement about something and you exchange more than two rounds of email, it's time to just pick up the phone.
What about picking up checks from clients? Entrepreneurs are always in a hurry to get paid, it seems, and again, there's something to be said for building rapport with clients.
But often, picking up a check may mean the only person you actually speak to is the receptionist at their office. Is it really worth an hour of your time to say hello to their receptionist and get paid 1-2 days sooner? Just ask them to mail it to you.
How Much Is Your Time Worth?
Have you figured it out?
If not, you should. To figure the minimum, figure out how much money you're making per year and divide it by 2,000, which is about how many hours the average person works per year. To figure the maximum, consider how much you make for your most productive time—closing a deal, a speaking engagement, billable client time, etc. Somewhere in between, there is the real value of your time.
There's a saying which I recall reading somewhere (I thought it was Harvey Mackay, but I haven't been able to track down the quote):
Don't pay someone $25 an hour to do $7 an hour work.
Plug your own numbers in there. Maybe it needs to be, "Don't pay someone $50 an hour to do $20 an hour work." You're the first number. Whatever your time is worth, think about each and every activity that you're spending time on a regular basis. Could you outsource it to a bookkeeper, a virtual assistant, a web designer, a copywriter, a part-time employee, your spouse or even one of your kids? It's very difficult for most entrepreneurs to relinquish that control and delegate, but it's one of the best ways that you can ultimately increase your income while decreasing the number of hours you work.
If you're a freelancer,
Remember—most resources are potentially unlimited.
There's no limit to how much money you can make (someone can pass up Bill Gates, right?). There's no limit (other than self-imposed) as to how many customers you can have, or employees, or locations, or products or anything else.
But there are only 24 hours a day, 7 days a week, 52 weeks a year, and you have to spend some of that time sleeping, eating, playing, relaxing and growing with yourself, your friends and your family. Time is an entrepreneur's most precious resource, because it is the only one that is truly scarce. Be stingy with it.