As a business owner, do you still have a hard time letting go of all the clutter (low-value, low-priority tasks) that surrounds your work day? A hard time letting go of the "trivial many" tasks? Are you still trying to be competent at every role and task in the company? Still wearing too many hats and juggling too many balls? Well, here is a simple exercise that may help you learn to let go of technical and administrative tasks you should not be touching on a daily basis. What are you worth per hour? That's right. Picture a specific number in your head. What is it?
Did you think $35 per hour? $50? $100? $150? $250? $500 per hour? What did you think your time was worth per hour?
Whatever number popped in your head is quite revealing about you, your role, your work, and your self worth. It also reflects on if you are working "on" your business or "in" your business. Working on strategic matters or tactical matters. Whether or not you already had a number in your head is also revealing. Most owners never assign an hourly rate to their time. Therefore, they don't value and protect their own time, seldom differentiate between the value of various daily tasks, and end up costing the company money.
It is also revealing during our business coaching sessions to understand an owner's thought process to determine that number. Was it logical or emotional? Off the gut or well thought out? Honest or fabricated? Did they base it on what they charge customers or clients per hour? Or was it simply a number in their head, even if from years ago? Or, did they take their salary (usually below market rates) and simply divide by 2,000 hours. That last approach just tells you what you are paid per hour, not what you are truly worth per hour.
No matter what number you came up with or the process you used, odds are that your number was too low. Since The Growth Coach serves thousands of clients each and every year, we know that most owners write down a number that is too low when they begin our coaching process. However, through our coaching process and time, that hourly rate soars.
As a business coach, I have concluded that most owners, doing this exercise the first time, can probably double whatever number they wrote down and that would be closer to a true worth number. Because most owners are handling so many menial tasks, they undervalue themselves. So if you thought your time was worth $100 per hour, in reality, it's probably closer to $200 per hour. The worth of an effective owner to the success of a business is nearly priceless. If an owner is working "on" the business and "on" strategic matters, that number should be well over $250 per hour.
No matter what number you came up with, examine it. Challenge it. Revise it if necessary. Now I want you to pledge, whatever the number, that you will not touch tasks unworthy of this rate. That you will delegate, outsource or eliminate tasks not worthy of your hourly rate. Did I hear you say a loud "yes?"
For example, let's say you still do the bookkeeping and payroll for your company and that your hourly rate from above is $100 per hour. Let's say you can hire or outsource bookkeeping and payroll at $15 per hour. Therefore, you are stealing $85 per hour ($100-$15) from your company every time you spend an hour doing bookkeeping and payroll. As a strategic business owner, that task is not worthy of your time and odds are, others can do it better and quicker than you can. The same goes when you do IT, paperwork, collections, administration, shipping, customer service, answer the phones, accounting, basic marketing and selling, scheduling, training, handling most fire drills, etc.
Whatever your hourly rate, start holding that number up to the value of the tasks you are doing on a daily basis and ask if that task you are about to start is truly worth your time. If not, delegate, outsource or eliminate that task. Learn to value, respect and guard your time.
Daniel M. Murphy
The Growth Coach
Business Coaching Franchise System