Hey It’s Darsweil, your Executive Business Coach!
I am truly pleased to present to you a very simple 4-part series looking at how to leverage your time and that of your employees, consultants, contract workers and suppliers to tap into the unlimited potential that exists for you to achieve higher profits and greater success in the future.
Time Management, or “not having enough time,” is one of the two most common reasons that business owners and managers give for their inability to realize their business and personal goals. I am truly excited to share these simple concepts that can immediately give you a new view on how to FIND the time that you need.
Before I jump right into this first Time Management strategy, I want to share with you a very simple truth about being successful. It takes a commitment on your part to continually get better. So I congratulate you for taking the time and committing to the process of learning some very simple yet very powerful concepts.
Analyzing Your Time
This is the first of a 4-part series looking at how to use your time to improve your profitability. Remember that it is the application of information that makes a difference, so I encourage you to stop, focus and apply this information. If you do this, it is guaranteed to be effective.
One of my mentors told me that you start everyday with 3 key elements, Time, Energy and Mindset.
We can adjust our Energy level and we can adjust our Mindset, but we cannot adjust the number of hours in a day. I am going to show you a new way to view your day so you can make better decisions about how you spend your time.
Step #1 Determine the current value of your time
What is an hour of your time worth? It is not your salary!
To begin, if you run a business or a division of a business or you are in sales/marketing, start with the total revenue that you or your team generates on behalf of the business. Here is a very simple example of what I am talking about.
|Profitable Time Management Example||
|A. Target Net Revenue||
|Net revenue equals your gross revenue minus any returns or charge-backs. In this example the company makes $1 Million in annual net revenue|
|B. Total Number of Days you will work over a 12-month period||
|Remember to consider partial days of work or activities done at home related to the business. In this example, this person works close to 6 days per week|
|C. Average # of Hours Worked / Day||
|D. Total Hours worked in a year (B x C)||
|This is the total number of hours you invested in the business in a 12-month period|
|E. Effective Hourly Wage||
|Your Effective Hourly Wage. (EHW) Remember this number for the rest of our analysis|
Complete this exercise using YOUR information
What is your Effective Hourly Wage (EHW)?
Step#2 How do you use your EHW to improve profitability?
Lets break down this very simple analysis or your EHW and give you specific actions to take to realize your unlimited potential. The first thing I ask my clients to do is consider the activities they do during a week. How many responsibilities do you do yourself where the task can be done by someone that earns a lower wage than you?
Let’s use the EHW in my example of $333/hour. Below are some examples of activities many business owners and managers spend time doing.
- Collecting and tabulating employee payroll – Wage Value $10-$20/hour
- Inputting financial information into the bookkeeping system – Wage Value $15 – $25/hour
- Cleaning up the office or store during or at the end of the day – $8-$12/hour
- Typing letters and documents – $12 – $30/ hour
- Setting and confirming appointments – $10 – $20/hour
In our example, if this manager is engaged in doing any of these tasks that range from $8 to $30/ hour while their time is worth $333/hour, there is a genuine opportunity to free up some time by transferring (delegating) these activities (or other lower wage activities) to someone else. When you transfer these activities, you should then focus on activities that generate a higher wage, for instance generating new clients or improving processes that can eliminate waste. This translates into the opportunity for higher profits.
Your ultimate goal is to optimize how you spend your time for the overall betterment of the company. The other thing to do with your additional time is take it for personal or family time, i.e. work – life balance. When you get away from the business and allow yourself personal time, it improves the quality of your life and can translate into higher performance when you return to work.
Step #3 Dealing with your what ifs…
What if your EWH is very low?
If your Effective Hourly Wage falls in the range below $100/hour, and you have employees or contract workers supporting your business, you need to get creative in how you leverage your very valuable time. You may say to me that you cannot afford to delegate the responsibility because you just don’t have the money.
Addressing your lack of money
I hear this comment all the time from so many entrepreneurs and business owners. Here are a few questions to ask yourself.
- If you allocated more time to prospect for new clients / customers, are you confident you can generate additional income? If the answer is yes, you need to decide to make prospecting a priority. A few hours more a month on new business can pay the compensation of your new support person and as you continue to spend time focused on prospecting your revenue base will expand even further giving you greater flexibility.
- If you are not confident that allocating additional time to prospecting will generate additional income, you must decide to quickly address the value proposition of your business.
- Who is your ideal customer?
- Are you selling what your ideal customer wants?
- Have you differentiated your offering from your competitors?
- Do you have a compelling marketing message to get your ideal customer’s attention?
- When your ideal customer contacts you do you truly deliver on the value?
- If any of these questions is no, stop right now and click here for marketing assistance.
What if you cannot find the time to implement the strategy?
As an Executive Business Coach, I have heard this issue many times. You say that you are too busy to implement changes to improve your business and your life. It sounds like a real dilemma, yet what is true about all of us is we all find time for those things we truly want to do. So what I share with my clients is the following: You are not prepared to implement any changes because you imagine your current situation (your comfort zone) is less painful then making the changes that may make things better in the future. I want you to seriously consider this. Also, remember nothing can change until you make a decision and act!
Finally, Coming Soon Part-2 of the Time Management Series on Rapid Decision Making
Executive Business Coach