What is your time worth?

Most business owners struggle to find enough hours in the day to achieve their goals. As a business owner, your priority is to satisfy your customers and generate revenue. Time is our most precious resource.

Growing a business is tough. You often get caught up in the dayto-day activities of running the business, but is this the best use of your time? We tend to take our own time for granted and rarely stop to consider the true cost of trying to do it all.

First and foremost, have you calculated the value of your time? Do you understand how much you earn by working in the business and taking care of those everyday tasks yourself?

So, what is this “value of your time”? It is not the per hour rate you charge. It measures the return on your time, i.e., what financial benefit do you receive for all the hours you put into your business? The formula to calculate this is highlighted below to make it easy.

Your hourly rate = Financial return divided by the number of hours worked each week

The first step to calculate your hourly rate is determining how much you pay yourself via wages, drawings, profits, etc. Say you pay yourself an $80,000 annual salary from your company and make a $20,000 profit. Your total financial return would be $100,000 a year. You might look at that and think that’s pretty good since most people don’t make $100,000 working as an employee. But how much effort is required to generate that salary? Now, things start to look slightly different.

Say you work 50 hours per week in your business. Based on a $100,000 financial return, by putting in 50 hours a week over 50 weeks per annum, you earn $2,000 each week; or $40 per hour.

An important consideration for business owners is they don’t get sick pay or paid annual leave or any other employee benefits. Unless you want to work every day of the year, if you factor annual leave etc. into your $40/hr, it starts to look more like $30/hr.

So you can start to see the importance of considering the value of your time as a business owner and the reality of what owning a business means in reaping the financial rewards vs the amount of effort we put in.

As a business owner, you need to start thinking about how much your time is worth.

• How much do you want/need to make from your business?

• How much effort do you want to put in to achieve that financial return?

• Do you want to earn more and work less?

How do you increase the value of your time:

• Look at everything you do in your business. Answering emails, speaking to your clients, getting your invoices sent out and your marketing activities etc. Subscribing to a time tracking app can help you identify where your time goes.

• Identify all the high-yield activities that will increase your hourly rate.

Once you have figured out the high-yield activities, focus on putting more of your time into them.

Next, list the low-value activities that decrease your hourly rate. They are the activities where you are wasting your time. These tasks need to be:

• automated; or

• delegated; or

• outsourced.

Ultimately, the less time you spend on activities that are not a good use of your time means more time to do what matters most to you.

Remember – you only have 24 hours a day. You have to sleep, eat, play, grow with friends and family, and find time to relax in those hours. Your most precious resource is TIME because it is the only thing that is limited, so be more discerning with it!