Blog: The Organized Entrepreneur
How Do You Value Your Time?
Last week, I had the opportunity to work with a client who has a successful, full-time career in direct marketing. She is motivated, outgoing and constantly working to reach the next milestone.
After our meeting, I realized that this client, like so many entrepreneurs, underestimates the value of her own time. I am convinced that simple adjustments to how we assign value to our own time can help many entrepreneurs break through to the next level.
Here is a brief example of how most business owners and commission-based sales reps approach the valuation of their time:
Susie works an average of 160 hours per month and her average total sales are $8,000 per month. Therefore, one hour of Susie's time is worth $50 in sales.
If Susie's profit margin is 50% (or she is paid a 50% commission), she is making a "salary" of $25 per hour.
Therefore, Susie should outsource any non-revenue producing tasks that can be delegated to someone else for less than $25/hour.
This is a great system if Susie is content to pay herself a "salary" of $25/hour.
My client, like many entrepreneurs, has bigger dreams.
To break through to the next level, our friend "Susie" needs to look at her time from a new perspective.
Susie works an average of 160 hours per month and her total revenue goal is $12,000 per month. To reach this goal, a one hour investment of Susie's time needs to be worth $75 in sales.
With Susie's profit margin of 50%, she is paying herself a salary of $37.50/hour when she devotes her time to opportunities that will yield $75/hour in sales.
When Susie invests time in the administrative, non-income producing tasks of running her business she needs to ask herself one question – "Would I pay someone else a salary of $37.50 per hour to do the work I am currently doing?"
What is a reasonable salary for the tasks on your to-do list today?
posted on: 5/31/2008 8:30:00 AM by Shana Prichard
The Organized Entrepreneur: < Previous Post - Next Post >
Blog Central: < Previous Post - Next Post >
Discuss This Post
There are no comments.
The Organized Entrepreneur
by Shana Prichard
View This Blog
Subscribe To This Blog
Shana M. Prichard, MBA owns realign, llc, a professional organizing firm. realign, llc provides small business organizing services including filing system design/implementation, desk and time management and QuickBooks set up and training. realign, llc also provides home-office organizing services to individuals.
What I'm Reading . . .
- "Raising Financially Fit Kids", Joline Godfrey
Common sense ideas and insight into raising kids who are wll-prepared to manage their own finances as young adults.
- "The Success Principles: How To Get From Where You Are to Where You Want To Be" by Jack Canfield
This book really got me excited about pursuing my goals and growing my business. There is a heavier emphasis on materialism than what I am comfortable with, but overall this is an inspiring book.
- "The Organized Executive", by Stephanie Winston
- "No B.S. Time Management for Enterpreneurs" by Dan Kennedy