Our most precious commodity is time. You can always make more money. You only have so much time. In order to be successful in business, you must account for your time: the time you spend and the time you sell.
How are you spending your time? Try this…
- Fill out a time card. Yep, you, the boss, the owner, the executive…whatever role you play that allows you to walk past the time clock. Figure out how you are spending your day. Record your activities and hours spent. How much time is spent doing tasks that won’t lead you closer to your hopes and dreams? You don’t need to ‘clock – in’ forever. Just do a study for two weeks and confront how you spend your time.
- Do it, dump it or delegate it. Be willing to make changes. Ask yourself, about each task you perform…
- Is this task necessary to achieve my goals? What if it never got done?
- Is this the best way to do it?
- Could, or should, someone else do it?
Do what needs to be done to get you where you want to go. And be open to letting someone else do things you are hanging on to. If you are not getting to it, or doing it haphazardly, how bad could it be to let someone else take a swing? Drop the perfectionism when you delegate. Getting things done through others is not only time saving…it’s empowering.
Now, how about the time you sell? Are you in the service business? Plumbers, doctors, lawyers, accountants, mechanics, haircutters, electricians, caregivers sell their expertise, their time. Service providers are bound by the number of billable hours that you can sell and deliver your expertise.
If you want to maintain your sanity, and have your family know you by first name, you will want to limit the number of hours you work per day. Eight hours is reasonable, though most self-employed folks work at least ten hours a day. Of those hours, how many can you sell to your customers? How many billable hours can you generate?
Are you tracking your billable time? You can use your timecard, or add up your billed hours from invoices. If you aren’t keeping track, you’ll guess that you have far more billable hours than you really have.
The number of billable hours is a critical number to nail down in a service business. You see, all the costs of doing business must be recouped via the billable hours.
Let’s say that you are a one person company, in the dog grooming business. You decide your salary will be $50,000 and budget another $50,000 for all other expenses, a total of $100,000 in costs for the year. Now, how much time do you have to sell? Assuming that you will take a two week vacation – reasonable idea – there are 50 work weeks in a year.
40 hours a week times 50 weeks = 2000 total hours. (I know, you’ll work more…but is that the point? Stay with me!)
Then, keep track of your time with a time card. Wow! During that 2000 hours you have to sweep the floor, do the books, order parts, schmooze with customers…you may have only 1000 billable hours – dog grooming hours – in a year. Therefore, your break-even cost per hour is:
$100,000 / 1000 hours = $100 per hour.
You need to charge $100 per hour just to break-even. We haven’t even accounted for taxes or profits yet. Hmmmm. (No wonder you aren’t making enough money.)
If you sell products, not just service, you still need to keep track of the selling time. How many hours a day are you open? How many dollars per hour must you generate in sales to ‘float the boat’?
Add the hours and crunch these numbers for your own business. Figure out the hours you spend and the hours you sell. Nail down the time factor and you will be unstoppable in your business.
“Time is money.” ~Benjamin Franklin
PS. The best way to “leverage” is to find terrific people to work with you. They can split the “to do’s” with you. And you can create more billable hours! Nice. I’ll be sharing How To Recruit, Hire and Keep Great Employees on my next Online Workshop. “See” you there!
I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business. The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently. Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.