If you and I were sitting down for a coffee in the middle of the day and I asked you, “What’s your time worth?”
What would you say? Would you quote your hourly wage? You probably would… and you would be wrong. Dead wrong!
To date, I rarely meet a revenue generating employee (aka, sales manager, sales rep, consultant, etc…) or business owner who truly understands the ultimate value of their time. From small home based businesses to SME owners, my question is often answered the same way… my time is worth $XX or $XXX per hour.
About a year ago I was having a coffee with a friend of mine – let’s call him Zeek for the purpose of this story.
First, some quick background: Zeek and his two partners own a business that generates $12 million dollars a year in sales. Among other things, Zeek is responsible for tweeting from the company’s corporate Twitter account – he tweets regularly inconsistently. Another partner is responsible for the company’s Facebook page updates – posting regularly inconsistently.
In other words, they post away – here and there – without many strategies or result, both admitting that neither are sure if social media even works but feel obligated to do it because everyone is doing it.
I was surprised to see and watch this happen and asked, “Why not hire someone to manage your Facebook and Twitter who is educated in Social Media? Here in Calgary, Mount Royal University has a program certifying students in Social Media. After all, what’s your time worth?”
To which Zeek replied, “I pay myself $100,000 a year ($50 dollars per hour) and I can just do it myself – no big deal.”
Isn’t that interesting?
I’m confident you’ll agree that money is a result of time & energy? (Time x Energy = a Financial Result).
Let’s first consider and remind ourselves of the 80/20 Rule…
20% of your customers contribute to 80% of your company revenues
20% of your sales team generates 80% of your sales
20% of your volunteers do 80% of the fundraising
20% of your investments bring in 80% of your returns
80% of your customers contribute to 20% of your company revenues
80% of your sales team generates 20% of your sales
80% of your volunteers do 20% of the fundraising
80% of your investments bring in 20% of your returns
If I was a financial planner… and let’s be clear I am not… but if I was, which box would you want me to invest your money into?
For every $1.00 you invest in the 20% box, you make an 80% return, in this case, $4.00
For every $1.00 you invest in the 80% box, you’re left with .25 cents – you lose $0.75 cents.
By the way, the difference between $4.00 and .25 cents is 16x. That’s a pretty massive gap.
Next question… if money is the result of the time and energy you’re investing… where are you investing your time? In the 20% box or the 80% box?
[insert the sounds of crickets chipping] …which is the usual response I get when I’m presenting the question to my audience and new clients… followed by an, “ahhhhhh… ah-haaaaa [light bulb going on].”
Now, one more point of clarification. Regardless if you’re a business owner or an employee (personally, I would prefer to be called a Teammate, Business Unit or Profit Centre), how much money you are paid is not relevant to what your time is worth.
Let me say that again…
how much money you are paid per hour is not relevant to what your time is worth.
In other words, in Zeek’s case, if you agree he is responsible for one-third of the company’s $12 million dollars in revenues – that’s $4 million dollars – then to know Zeek’s actual hourly worth, take $4 million, divided it by the 40 weeks a year he works, divided by the 40 hours he works per week.
Zeek’s time is actually worth $2,500 per hour. Which means Zeek is investing $2,500 per hour into Twitter. Isn’t that… interesting.
As for Profit Centre Employees, consider calculating your time’s worth based on the total revenue you bring to your company. If you’re paid $100k per year, it’s likely you need to generate $350k to $1 million dollars in revenues to earn your pay.
Using your revenue targets, do the same math as I did for Zeek. That’s your real hourly worth… roughly $500/hour working 49 weeks a year.
New REALITY – understand what your real worth is… and start acting like it. At the very least, I will bet you find yourself walking a little taller, dressing a little better and behaving like the high performer you were meant to be.
After you’ve ran your numbers based on the total revenue generated, take that new number and reinvest it.
In other words, Zeek’s time is worth $2,500/hour. How many hours a day can Zeek invest his time to generate a 4:1 return? One hour a day… 2 hours… 3… how many. If you’re in business to make measure difference in the lives of your staff, your customers and community, then invest as much time as you can in the right areas of your business.
Suggested time investment strategies:
- Investing time with your current customers, finding out why they buy from you, what makes you different. And if they stopped buying from you… find out why.
- Investing time with your staff, listening and learning about them and what they love to do at work and away from work.
- Investing time with your suppliers, listening and learning what they like and don’t like about doing business with you.
- Investing time with your sales partners and strategic alliances – figuring out what they need (personally or professionally) and positioning yourself as a resource to meet those needs.
Employed as a Profit Centre Employee? Invest your time in the 20% box as many hours in a day as you can. (The same activities above will work for you as well)
Final test… as a business owner or employee, when someone calls you up and says, hey Zeek, let’s grab a coffee… hey [your name here], want to grab lunch? Got time for a quick chat [no such thing by the way]. If it’s during the revenue generating hours of your day, you’re obligated to ask yourself, “is this [time] worth $2500 an hour?”
If it is, all the power to you. If it’s not, just say no and invest your time in the right activities.
STOP acting your wage and start investing in what you’re worth!