Most business owners undervalue their time for a simple reason: They’re not thinking about what they’re giving up when they do work that should have been done by someone else.
For every hour spent fighting with QuickBooks or trying to fix a website or plowing through a mountain of paperwork — and doing everything but the business itself — there’s a cost.
The cost is what could have been done instead.
For example, on the wishlist for your business there’s probably a lot of ideas. Perhaps there’s an idea for a new product, or an idea for how to make an existing product even better, or an idea for how to reach a whole new market. These sorts of ideas might come to you all the time. Entrepreneurs are creative by their very nature. But now that you’re drowning in the daily humdrum tasks of just keeping your business afloat, your ideas get relegated to a wishlist — or, more accurately, a when-I-finally-have-time list. At this rate, it’s difficult to imagine ever having time to get to those ideas, even though they have the potential to grow your business in new and exciting ways.
That’s the cost of doing your own bookkeeping. That’s the cost of managing HR and payroll on your own, and sitting on hold with the cable company when Internet service goes down. For every hour you spend on those boring tasks, you’re giving up an hour in which you could have made your business better.
That’s why it’s time — not money — that ultimately drives your bottom line.
Your business will be successful to the extent you’re using your time to become the very best in your niche, whether that niche is container shipping or practicing a specific type of law or serving pizzas in a small town. To the extent that you’re making your business the very best it can possibly be in its niche, you’re carving out a powerful place in the world. But to the extent you’re not, you’re not.
That’s why transitioning your business from one that’s bogged down in operations to one that’s hyper-focused on the business itself means fundamentally changing the way you think about your time. Every hour you spend on QuickBooks is an hour you didn’t make your business greater, and that’s a cost you can’t afford. The key is to transform the way you use your time, from DIYing to focusing on what you do best and how to do it even better.
Changing your mindset in this way requires putting a dollar value on your time — and that value is probably higher than you think. Once you know what it is, it acts as a guide in helping delegate the tasks that are inefficient for you to do yourself. This is how you move toward the most powerful three-word business plan in the world: Do less, better.
To illustrate what I mean, think for a second about a Silicon Valley entrepreneur who’s lucky enough to have someone invest in her startup. Let’s say the investor ponies up $5 million for the entrepreneur’s idea. The entrepreneur then has to devise the smartest way to use that $5 million to build the business from scratch.
You might think that scenario is nothing like your own since you’re bootstrapping your business by patching together savings, running on a scant budget, and DIYing everything you can. But no business gets off the ground without startup capital. It’s just that in the case of the Silicon Valley entrepreneur, there was an outside investor, while you are self-funding. You don’t have $5 million to dedicate to self-funding, of course, but you are using something else of value: your time.
Remember, you gave up your old salary in order to work for yourself. Every day that goes by in which you decide not to go back into the labor force — either part-time or full-time — you continue to double-down on that decision. Well, the salary you’re giving up is like that $5 million of investment capital. Instead of using your time to earn wages from someone else, you’re investing it into growing your business. And just like an entrepreneur carefully spending $5 million of start-up capital, you should be focused on how you’re using your time, because your time is your start-up capital.
There are three key questions you should continually ask yourself. These questions will help you maintain focus and thus make smart decisions with the precious 24 hours in each day:
- Where am I spending my time?
- What is the cost of my labor?
- How much value am I adding to my business?
Return to these questions again and again once there’s a dollar figure on the value of one of your hours. This will help make clear which tasks are — and aren’t — worthy of your personal attention. This allows you to zero in on the value you add to your business by doing the things only you can do.
Think you can’t afford to delegate? You can’t afford not to. Delegating actually saves money while also freeing up more of your time, which is the most precious nonrenewable resource any of us have. Download The Golden Formula Whitepaper to dig even deeper and unlock some practical application of the power of these principals for your business.
By Justin E. Crawford