What's your time worth?Tweet
For every person in every business, they perform a mixture of tasks; Some tasks are worth very little and some tasks are worth a very high value. I often ask a business owner “How much is your time worth per hour to the company when you are doing the most valuable work?”. Almost no one ever knows the answer.
Often, as we grow and develop a business and our own capabilities we tend to hold on to a bunch of things that we have always done, because… well… because we’ve always done them! Maybe no one else knows how, or maybe we even enjoy those tasks, but the harsh reality is that we should no longer be doing those things.
I often take out a pen and draw a simple graph with £ per hour on the vertical axis and time on the horizontal axis. Then I ask for some examples of some tasks that the business owner does, how long they take, and how much that work is really worth per hour? They still do invoicing, it takes a few hours each month, but the ‘going rate’ to have someone else do that is perhaps £25 per hour. So we draw a little red cross on the graph low down and to the right (not worth much and takes a few hours).
We get a few more examples - they still like to open the mail, they like to answer the phone when it rings, they ‘have to’ wash-up at the end of the day because no one else will! You get the idea, lots of red crosses - low-value work.
We draw some blue crosses for things like staff appraisals, meeting key customers, and all those other things that are valuable enough that it commands a relatively high value. These are tasks that seem like a better use of a business owner’s time. But it’s still not where they should focus.
I ask “Who’s your largest customer and, if you work it out, how many hours of work did it take to get them and how much will they be worth over the whole time they buy from you?”. The answer is usually quite interesting - imagine the answer is that it was a long process over three months but the actual number of hours invested was 50 hours and the customer will probably spend £500,000 over the next five years. That means those 50 hours invested were worth £10,000 per hour. I’m told I often ask quite annoying questions, so I’ll follow this up with “are you sure you still want to spend your time opening the mail?”.
Business owners, when they spend their time most appropriately, can be worth a huge amount of money per hour. Actually almost anyone at almost any position in a business can usually be worth a lot more, provided they gain awareness of true value of what they do and what they could do, then select wisely.
Often it’s necessary to first free the time to be more selective, but that’s a whole other story about Outsourcing, Delegation, or applying The 3D rule which you can read about elsewhere on our blog.
Take the necessary action and focus your time to be most productive and earn more while working less.
By: Rob Pickering