We’re kicking off our “What Drives 90% of Your Business Success” blog series by talking about how time does really equal money
Learn how to put a value on your own time
If hard work is 90% of your business success, you need to make sure that the work you are doing is delivering a return for your investment. Too many times we see entrepreneurs spending hours on parts of their business that aren’t going to provide a good return. In the early days, this is important. Every euro in the bank is the difference between your business getting off the ground, or dragging you down.
Spending too much time on the wrong areas means two things 1) you don’t invest properly in the areas that will bring in revenue and 2) your profit margins are being shaved on any revenue that is coming in.
A quick and easy way to evaluate where you should be spending your time, this tip will open your eyes and help you prioritise your efforts.
How to do it – Step 1
There are a few different ways you can evaluate the monetary value of your time. We are going to use a simple and quick method. If you want to do something that’s very accurate speak to an accountant or anyone who works in a time-measured billing environment.
Say, for example, you want to earn €30k this year. * Work out how many hours you will work during the year. We suggest a formula like this
240 days ** times 7 hours per day *** equals 1680 working hours in the year.
So, your hourly working rate €30k divided by 1680 is €18 ****
* Remember there is difference in turnover and take-home pay
** Working days in the year = 52 weeks x 5 days – less 20 days holiday
*** This is the number of hours you would like to work – we know that start-ups can work 10 and 12 hour days. We’ve used an 8 hour working day minus 1 hour for breaks
**** €17.85 rounded up
How to do it – Step 2
Now think about where you spend your time and how much that investment costs you and your business. For example, if you spend a day doing your accounts every month, it’s costing you €126/month. If you spend a day per week on social media and branding, it’s costing you €504/month.
Are you seeing a return for your investment? If you were paying someone external the same money to do the job for you, would you be happy with the returns? Now you have the data to make decisions about where to spend your time, start to measure it’s impact. What should you drop? Where do you need to spend more time?
How to do it – Step 3
Keep a track of how you are spending your time over a few months. We often don’t have a realistic view of where we are spending our time over the longer term. Using a tracking tool will give you a lot of insight. For example, putting your time reports alongside your sales or lead generation reports might show you trends on which of your time investments gets the biggest impact.
Let us know what you learn!
We’d love your feedback on what putting this tip into practice has revealed for you. Have you changed your work focus? Are there things you’ve started doing more of? Do you have any other tips for getting best value out of your time?
Connect With Us!
Want to talk about anything in this article, or need any other support for your start-up business? The BASE is here to support you and your business start-up and growth plans this year. Give us a call on 087 607 5555 or email us at email@example.com.