Why understanding the value of your time can boost your business income

Property for the next generationVicki Wusche is a successful business owner and she recognised that by understanding the value of her time and then exploring how she spent it, she was able to increase her productivity and achieve so much more.

For example in 2012 Vicki wrote and published three successful books, spoke in front of 1,000s of people at small local events right up to the Business Show, coached clients (property investors and business owners), sourced and bought investment properties, set up a successful local property and business networking event, developed four websites, four e-books, a range of online products and webinars, and still had holidays in Indonesia and Thailand.

She didn’t routinely have to work weekends. She still saw family and friends. She had plenty of time to enjoy life. She gives some advice on how to make the best possible use of your time and at the same time, achieve more.

How are you using your time? Are you using it to make money? To build your business? To see your family and friends?

We all have exactly the same number of hours in a day so why do some people seem to have enough time to do everything they want and others never seem to have enough?

If you want to be more successful then you need to use your time in a particular way, a way that brings you the success you want. To do this you need to understand how you use your time and what it is worth.

Vicki Wusche worked out what her time was worth and how she wanted to spend it, and for the last two years her income has doubled each year.

Here are her tips:

Start by looking at how you spend your time, the balance between business activities and the rest of your life. She suggests you go through your diary and colour code the time as follows:

1) Income Generation – Green – this is direct hours that clients are paying for

2) Income Speculation – Blue – this is time looking for opportunities to invoice

3) Income Saving or admin – Amber – this is time preparing accounts, meeting the book keeper, anything that would save the business money, or prevent money being wasted

4) Fun (income spending) – Red – everything else. E.g. social time, personal time, anything that was not work related.

Notice how many weekends and evenings you are using for business meetings and events. Ask yourself if you are happy with this and if it’s bringing you the benefit you want. If yes, then great. If not, choose not to do it anymore.

Next, understand how your daily activities contribute to your overall business (and life) goals. For example, if you want to double your turnover then you need to work out what your time is worth in financial terms. Here is how:

1) Choose your target salary for a year and divide this by 10 months (10 months allows for time off over Christmas, Easter and other holiday periods.)

2) Then divide your monthly figure by eight

On average (and to make the maths easier) there are 20 working days in a four week month. As business owners we need to work on our business as well as in our business, from experience, on average two days per week are invoice-able.

3) This gives you a daily invoice rate but that does not allow for the cost of conducting business or tax

4) Double this figure to allow for the cost of doing business

5) Divide this by eight (if we assume an eight hour day) to give you your hourly rate

As soon as she doubled her income generation hours (green) and reduced the other hours, her turnover doubled! Last year it doubled again.

Here are some tips to help you focus:

1) Have a purpose, aim or goal for a period of time. You can pick short goals like “to relax this weekend”, “to finish this report”, or larger financial goals “to double my turnover this financial year”.

2) Review the last month / week of your diary. How did you spend your time against the classifications of income generation, income speculation, income saving or fun? Are you happy with that outcome?

3) If your income is less than you would like then she suggests that you are not generating enough income (or invoice-able time) – adjust the balance.

4) Ask yourself the question “Did my “activities” contribute to my goal or purpose?” Is this how I want to spend my time? Think about the balance you are experiencing – lifestyle versus income.

5) Work out what your time is worth. You can use this to choose between certain business activities. It can help you recognise that a book keeper and cleaner are worth every penny, as you reuse the time gained to work for and invoice your own clients. You can make judgements about certain activities and their business value.

Time and money are our two greatest assets. If we use them well then we can create the life, business and lifestyle that we choose. It is our personal experience of time that matters. Are you happy with how you spend your time?

If not then I suggest you review how you currently use your time. Work out what your time is worth, do the maths. Think about what is the best use of your time to meet your goals.

Vicki is a successful property investor and author of ‘Property for the Next Generation; preparing your family for a wealthy future’

 

1 Comment on Why understanding the value of your time can boost your business income

  1. Do let me know if I can be any help, I am speaking at the Business Show Excel on 6th & 7th JUne 2013 – do come by and visit – for free tickets click http://bit.ly/BizShowJune13

    Happy time investing 🙂

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