As a business owner, would you pay someone $200 an hour to pick up supplies, post on social media, or perform customer follow-up? Probably not. Yet every day, small business owners overpay for such things by doing it themselves.
What Is Your Time Worth?
We all value our time. But do you put a value on your time? When you work for someone else, it’s easy to do – your rate of pay. But as a business owner, we don’t tend to think that way. But it’s a great tool to help you prioritize the work YOU do versus what you delegate or outsource to others.
If you have never done this, here is a simple way to approach it. Let’s consider three things:
- What is your personal income goal? What you want to earn in salary or draw?
- How many hours per week do you want to work?
- How many weeks vacation do you want to take? Yes you should take time off and get away!
Using this information, you can easily calculate your hourly ‘value’ rate. Here is a simple example to demonstrate this:
Let’s assume you want to pay yourself $150,000 annually, work 40 hours a week and take two weeks off for vacation. Then your hourly value would be annual pay ($150,000) divided by number of weeks (50) divided by number of hours (40) or $75 per hour.
Of course as the owner and leader of your company, you drive results. So shouldn’t you consider that when calculating your value? Here’s a good incentive — replace your personal income with annual sales. For this example, let’s assume $750,000. So your hourly value would be $750,000 / 50 weeks / 40 hours or $375 per hour.
Whichever approach you take, you will quickly realize your time is worth a lot more than you realize. Stop spending time on tasks that you could easily delegate or outsource. Focus more of your time doing the things that only you can do — things that move you and your business forward.
You may not be able to rid yourself of all low-value tasks tomorrow. But there is a cost to doing it yourself. So start eliminating them over time and you will get there.
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