Do You Know What Your Time Is Worth?
By Mary Oquendo
My time has value. So, in the back of my mind, was this vague notion of what I thought my time was worth. But that’s just what it was—vague.
I opened my first business in 2002 and Pawsitively Pretty Mobile Grooming is still going strong today. I had already been the highest priced shop groomer in my area and raised my prices even higher when I went mobile.
I was sitting in the kitchen of a client that followed me from the shop. Her price went up $20. Based on the average price in the area, I was about $30 higher or almost double for most breeds.
I felt comfortable enough with this client to ask how she really felt about my pricing. At the time, mobile grooming was unheard of and I had several people call me and express sticker shock. She just looked at me and said that I just gave her back two hours of her day. That’s the time she spent driving back and forth to the shop where I worked. Those two hours were worth the extra cost to her.
That was kind of an eye–opener for me. My time has value. So, in the back of my mind, was this vague notion of what I thought my time was worth. But that’s just what it was —vague. So, lets change that.
Okay ladies and gents, time for some math! Say I want to earn $100,000 for the year. And, let’s say my business expenses are $30,000. Then the total income I need is $130,000 to clear that $100,000. I plan to work 48 weeks of the year, and mustn’t forget my vacation time.
This puts a different light on things when you’re futzing around on Facebook during the time you are supposed to be working. If I’m not making $68 every hour, then I’m losing it.
Once you are out of your workweek, your spare time is up to you. Spend it with your family, play and network on Facebook or read a book. It’s not billable hours anymore.
Let’s take this article. If it takes me two hours to write it, the cost to me is $136. If I write a little, run over to FB, and now it takes me four hours, my investment to my business jumps to $272. I doubled my expenses.
The financial goal of a business is to keep expenses to a minimum while producing quality products. Will this article generate the cost of my investment? Time will tell, but a $136 investment is easier to recoup than $272.
I use the word investment rather than loss of time. Investment is a business expense and is factored into my cost of doing business.
Now I want to introduce another principle called ‘Deliberate Practice’.
I first heard this term in the book “Badass Making Users Awesome” by Kathy Sierra. The intent of Deliberate Practice is to make the most of the value assigned to your time. Deliberate Practice is when you work on one particular skill until you master it and then move forward.
Many times, entrepreneurs in their quest to be the best in their field overwhelm themselves with trying to learn several things at once. What happens is you might be adequate in those skills, but you don’t master them. How many of us are doing our own financial books, designing and up–keeping a website, responsible for marketing, grooming of course, and so forth? Instead of being exceptional, you are ‘meh’.
Say I want to develop a one–hour e–course and I need training in developing the program and how to write an effective sales page. I could buy both courses at $100 each and learn both at the same time. The sales page is taking me six hours and the program development is four hours. At my $68, I have invested $880 in this e–course. And it’s ‘meh’ because I haven’t mastered any of these skills and the generated income will suffer for it. I eventually get the time down to three hours for the sales page and my costs drop to $476. Your time may vary, but I’m still not mastering these skills.
But what if I took the time to master each skill? Statistics show that when Deliberate Practice is effective, it should take three sessions to master. If it is taking longer than three sessions, you need to re–evaluate your learning process. If I reduce the time spent on the sales pages and program development to an hour and two hours respectively, the program costs, in my time, is now $204.
Then there are the jobs as a business owner that you are responsible for but dislike doing or you don’t want to take the time to master. In such cases, I hire out. It’s why I have a business CPA. I hate doing my taxes and figuring out my quarterly obligations, or even knowing what the tax laws are to take advantage of them. If it were left up to me to do my taxes, I would probably be writing this from a federal penitentiary.
My other hire is a business coach to help me with organization and systems. That coach has saved me hundreds of hours in helping me streamline my processes.
When you know precisely what your time is worth, you can make better decisions that propel your business forward rather than just spinning your wheels.