Time is money, use it or lose it!

money clockHave you ever reached the end of the day and wondered where all your time went? Playing catch-up to retrieve wasted time is what keeps many SME owners welded to their business premises way outside of ‘normal’ business hours.

For many SME owners a number of their customers, suppliers and employees are likely to be friends as well as business acquaintances. This overlap of private and business relationship can lead to requests for assistance or for special deals that can make serious inroads on their time. A lot of small business operators go slowly broke doing work for friends at discounted rates or for free. ‘Mates rates’ translates as ‘at less than your market value’ and that means more hours you have to put in to make up for the lost profit.

Activities justified as building relationships with customers and suppliers can easily stretch out to time wasting proportions whereas choosing an appropriate form of contact in the first place could have sped up the information flow and decision making. Phoning someone to resolve a complicated issue will save time over emailing backwards and forwards with them but for straightforward matters an email that takes 5 minutes to compose and send is more efficient than several phone calls.

Other ‘entrepreneurs’ seem happy to waste time carrying out basic tasks of little productive value. Is it really necessary to run errands such as picking up a cheque from a creditor when it could be mailed to through? How many waste time making duplicate trips because they haven’t planned the most efficient sequence of visits or deliveries, or notified customers in advance of their visit and find no one at home?

Figuring out just how valuable an hour of your time is can be a real eye opener. Understanding how much money you are wasting by wasting time is the best incentive for making changes that will improve how you utilise your work hours. To figure out the minimum hourly value of your time estimate how much money you’re making per year and divide it by 2,000 (a 40 hour week over 50 weeks – plug in your own actual figure if you know it). To estimate the maximum hourly value consider how much you make when you are most productive such as the value of product you could turn out in an hour, what your billable client time rate is, etc. Somewhere in between these figures is the real value of your time. That figure should be your benchmark for deciding which activities are earning you money and which are losing you money and wasting your time.

With a sense of your hourly value in mind look at each task in terms of opportunity cost – what you could be earning if you weren’t doing this. Any job that brings in less than your hourly value figure should be up for reconsideration. You can make arrangements not to do some of those jobs that bring you in less than your going rate or you can put definite limits on how much time you are going to commit to low value work. Could you outsource your financial record keeping to a bookkeeper? Hire a junior to do the mundane low value adding tasks? Automate some of your processes? Use an answering machine or an answering service?

Dealing with people who use up your time in ways that don’t produce any gain for your business, such as obvious tyre kickers or friends who are always dropping by for a chat, can be dealt with by learning techniques to tactfully terminate pointless conversations. On a more personal level you can decrease wasted time if you learn to use some of the proven time management skills like scheduling your daily activities. In essence, the more time you save by working efficiently and effectively the more money you will be able to make. Taking a course in time management can provide a real payback in terms of avoiding time wasting activities.

No one wants to be a slave to the clock but the fact is there are only 24 hours in a day, 7 days in a week, and 52 weeks in a year. Time wasters come from the people around you as well as from within yourself. Curtailing time wasting activity will allow you to earn top income in minimum time so you can enjoy the fruits of your work. Setting aside some time to think about how you could save time, most definitely will not be a waste of time.