The main reason I have found why so many small businesses do not perform to their appropriate level is because the owner does not properly use his or her time; that is, they don't prioritize which of their efforts create their best results so that they know where to focus their time. Without knowing who your best customers or clients are or what the best use of your time is, you inevitably waste time on things that don't produce desired results.
Let me give you an example. Say you want to earn $200,000 per year and let's say there are 1,000 productive hours. By the way, the number of productive hours i use in this example is very generous, because according to one study of Fortune 500 CEOs, the amount of productive time in a day was 45 minutes equating to 225 hours for the year. For this example, let's say it is 1,000 productive hours for you. This means that each hour you work should be valued or billed at $200/hours. ($200,000/1,000 hours.)
My question to you is: Are you doing the type of work that pays you $200/hour?
If you engage in any type of administrative work it would probably be valued at $15-25 per hour.
Any bookkeeping related work would probably be valued at $20-30 per hour.
Answering the phone, dealing with customer queries, etc is probably valued at a similar hourly rate.
These are just a few examples of the activities that many small business owners find themselves engaged in on a daily and weekly basis. As a small business owner, it is easy to become distracted by tasks that seem important and urgent, otherwise called ‘fires'. While these fires seem crucial at the time and certainly do need to be addressed, they are not the best and highest use of the business owner's time.
You are probably asking yourself what type of work do you need to do to get paid $200/hour? Using the example above, this is the dollar figure that best represents your financial worth on an hourly basis.
To reach this dollar figure per hour, you would need to be engaged in “strategic” work. Some examples are:
- exploiting new markets
- developing new products/services
- creating new marketing avenues
- generating new leads or prospects
- improving on your ratio of leads to sales
- increasing your client retention
Every month, set aside at least twenty percent of your time to dedicate toward such activities. These activities should not only be scheduled within your calendar, but they need to be tackled first. If you leave these activities until the end of the week, it is unlikely that they will be completed. Things will pop up and before you know it, the end of the week will be staring you in the face and you will not have accomplished the most important tasks which have the potential to increase revenues and profit in your business.
