Business Owners: How Valuable is Your Time?

Whether you are hiring new employees or contractors or you are looking at year-end raises for your staff, it is common to assess the hourly and salary rates that are being paid out to the team. But, there is one area that often falls through the cracks when you are considering the value of time and skills that are offered for business projects. Ask yourself one important question: How valuable is YOUR time?

Wearing Many Hats as a Business Owner

Since you aren’t working for another company, it can be hard to put a price tag on what your time is worth. As you are launching the business and putting new systems in place, it is common to spend time on lower-level tasks that could be handed to others. During these start-up phases, new business owners are often looking for solutions to reduce overhead expenses, which means that they are often wearing many hats throughout the day.

It takes time for a business to become profitable, so it’s no surprise that you are willing to take on some of these entry-level tasks. But, it is essential that you consider the future growth of the company so that you aren’t dedicating a significant number of hours to tasks that should be handed to an employee or contractor. If you are undervaluing your time, then it means that you won’t maximize your Return on Investment (ROI) or the profitability of the company.

Financial Benefits from the Time You Spend on Business Building Activities

How valuable is your time? When you put in a specific number of hours in business-building activities, is there an anticipated amount of revenue that you can expect in the future? It depends on the type of activities that you are choosing to complete each day. For example, if you are spending your time taking out the garbage or organizing inventory shelves, then these activities won’t likely have a direct impact on your revenue. On the other hand, you can focus that time on improving industry connections or optimizing marketing efforts, which could have a measurable impact on your business profitability.

There are several strategies that can be used to ensure that there is a financial benefit for the time that you are spending on your business efforts:

  • Determine the value of your time. When you know that one hour of your time is worth a specific amount, then it is easy to identify the tasks that can be outsourced at a cheaper rate. For example, you can pay someone $10 or $15 per hour for custodial services such as cleaning the bathrooms and taking out the garbage. If your time is worth much more than that, then you need to focus your efforts on the tasks that bring in money, instead of wasting your efforts on things that should be assigned to other.
  • Identify the wisest use of your hours. You only have a certain number of hours available each day, which means that you need to find the tasks that are the wisest use of your time to gain the maximum results in the future. There’s always “good, better, best,” so you shouldn’t settle for good when there is more upward potential available from the best tasks that will help your business grow.

You are the foundation of your company, especially when you are setting up the systems in the beginning. It doesn’t matter if you are selling a product or a service. You need to remember that your time is valuable, which means that every hour should be spent on tasks that will have an impact on profit margins.

Strategies to Assign Value to Your Work Hours

Several considerations need to be addressed if you are going to assign a value to your work hours. The goal is to reduce the time that you are spending on low-profit activities while shifting your focus to high-value activities and business development efforts. These efforts can help with the optimization of your efficiency so that you are receiving the right compensation for your work. It can be disheartening to know that you are putting in the blood, sweat, and tears only to bring in a minimum wage.

If you want to improve your business profitability, then you can’t sell yourself short in the evaluation of your time. Understand that time is one of the most precious commodities used to help your business grow. So, you need to take advantage of opportunities to leverage your hours whenever possible.

Whether you employ others or you hire outsources to help with business tasks. You should be the highest-paid team member, with the lower-paying tasks being handed off to team other employees or contractors. Not only do you need to consider the hourly rate that is being paid to these people, but you also need to factor in other details that will affect your out-of-pocket expenses, such as overtime pay, benefits, employment taxes, and more.

Also, it can be wise to do some research so that you can see what other people are charging for similar services. What are the price points of your biggest competitors? It is possible that you are charging an hourly rate that is much lower than the competition, which means that it might be time to notch up your prices so help with the optimization of your profit margins.

Value vs. Price

Keep in mind that the price that you are paid for the products and services that are offered isn’t an exact measurement of the value of services that are offered. Some business owners make the mistake of trying to compete based on price alone, which means that it is a race to the bottom to outperform the competition. If you are always dropping prices in an effort to bring in more business, then it becomes harder and harder to increase your profit margins.

On the other hand, you need to be sure that you are delivering value for the services that are offered to others. If you are overcharging for your time without delivering the perceived value, then it is hard to maintain the consistency of returning customers. There is a “sweet spot” that you need to identify for your industry. It often takes a little bit of trial and error to find the right place that will support your business growth.

Why Delegation is Essential If You Value Your Time

If you truly value your time, then it is necessary to implement a good delegation system to improve your efforts. Not only do you need to hand off the lower-paying tasks as mentioned earlier in this article, but you also need to look for ways to tap into different skill sets that can be used to help your company grow.

For example, if you know that your business finances need to be improved, then you have the option to learn more about the industry or hire someone who is an expert in accounting. It can take countless hours and many years of education to master a good accounting practice. There’s no reason why you should waste your time reading through tax laws and accounting software manuals when you can hire someone to handle these tasks for you.

Hiring a good accounting team means that you can bring in the expertise that is needed without spending your precious time learning an education that is peripheral to your main business efforts. In fact, you are likely leaving money on the table if you are diverting your attention to the side tasks instead of focusing on the efforts that will help your business grow. So, don’t enroll in an accounting class at the local college. Instead, look for a team that provides the services that you need so that you can maintain focused efforts on the tasks that you are good at, such as the things that will bring more sales into your company.

Yes, it can be difficult to rely on others when you are unsure about the performance that will be offered. But, as you understand the importance of delegation, it will help you see the best ways to improve your business efforts going forward. Micromanaging every aspect of your business process is a practice that will inhibit business growth and stop you from reaching the highest levels of success that are available.

As you hand over these responsibilities, you will undoubtedly have more time for higher value activities, helping to increase your income potential. It can result in a snowball effect that results in great results for your company overall.

Our experienced team at Easier Accounting is here to assist with your business financial goals. We invite you to consider the question: how valuable is your time? Then, bring in a team of experts that can assist with maximizing the overall results that can be achieved in your company. We are here to help with all of your accounting and bookkeeping needs. If you own a small business, then we invite you to contact us so that you can learn more about the various services that are offered: (888) 620-0770

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