How to Make the Best Use of Your Time in Business
As business owners, we have to make decisions every day about where to spend our time.
Time is money, as the saying goes. Cliché, but true.
Today I want to share an interesting story about this...
A while back, I spoke with a holistic practitioner who wanted to double her monthly profits. She was doing alright, but wanted to take home significantly more income.
Now, simply speaking, you can increase profits in one of two ways:
- Increase your revenue
- Decrease your overhead
(Doing both increases profits even more, of course.)
This practitioner’s overhead was already pretty low, so we took a look at how she could generate more revenue quickly.
The first thing we did was review her offerings.
The good news was she was already offering packages, rather than charging per visit, which is something I had taught her how to do in one of my courses a few years back. I was happy to hear that this was working out well for her.
But I did see a problem. Based on the number and variety of services included in her packages, I suspected she was undercharging.
We calculated the true value of her packages using a formula I’ve developed. We discovered that she was, in fact, undercharging — by quite a lot. By about $1200 per client, over a 6-month engagement.
So I suggested that she raise her prices for all new clients.
This increase would virtually guarantee her an extra $2000 the following month, based on her current sales numbers, and eventually an extra $6000+ per month as she implemented and fine-tuned a new client attraction strategy.
Now the issue confronting us was how to carve out more time for her to focus on her marketing, because she already felt quite busy.
So we did an inventory of where she was spending her time in her practice, and one thing became immediately clear:
She was doing a lot of low-level work that could be automated or done by an assistant.
She needed to offload some of these activities as soon as possible so she could focus on the higher level activities that would generate more income.
Here’s an example of one of the low-level activities that she was handling:
She was spending about 3 hours every month manually inputting and charging credit cards of clients who were on payment plans.
How it worked was she had clients' credit card info stored on paper in her office. She would use a virtual terminal to enter that information every month and process the charges, one by one. (The terminal offered no ability to store or charge cards on a recurring basis.) She did this for some 15-20 clients every month.
Not the best use of her time.
Three hours might not seem like a lot, but considering that her hourly rate was $200, that’s $600 worth of her time doing something that could be completely automated.
I suggested she switch to Square and use their recurring payments feature. This would allow her to enter in a client’s credit card ONCE at the start, and Square would automatically bill their credit card every month thereafter, per the details of their payment plan, without her ever having to think about it again.
Voilà! Three hours saved every month – valuable hours she could now use to focus on revenue-generating activities.
But here’s the kicker.
I thought my solution was a no-brainer.
Yet this practitioner didn’t agree. In fact, her response was not what I expected. She replied:
“Oh no, Square is much too expensive. They charge $0.30 per transaction. I don't pay a transaction fee now. Let me do some research and see if I can find something cheaper. If not, I’ll just keep doing it the way I do now – it’s fine.”
I was surprised. In my view, $0.30 per transaction fee was nothing compared to the value of her time saved. If 20 clients were on a payment plan, that would be just $6 in fees each month. In return, the practitioner would reclaim 3 hours of her time, a $600 value, every month.
Plus we had just raised her prices significantly and she could expect a big boost in revenue. For these reasons I didn’t think it was worth a minute of her time researching a cheaper solution. I explained all of this to her, thinking she would agree.
Only she didn’t.
In her view, $0.30 per transaction was too high. Even if it only resulted in $6 in fees by the end of the month.
I can't say for sure, but I think it was almost a moral issue for her. I suspect she felt like the $0.30 fee was unfair and therefore she wasn’t going to accept it. Never mind that the fee was, in reality, miniscule.
I think this is a fascinating example of how we can make poor decisions when weighing the relative costs and benefits of certain actions in our businesses.
This is not to poke fun at this business owner. Because the truth is, we are ALL guilty of making these kind of mistakes.
We all occasionally have distorted views of certain costs and benefits. We all occasionally let our emotions run the show instead of logic. Sometimes, we let old habits and fearful mindsets around money hold us back from making smart choices.
The point is, we all get in our own way. It’s called being human.
In business, the goal is to be intentional about how we’re spending our time. To avoid waste our time on activities that don’t move the needle. To avoid being “penny wise, pound foolish.”
This doesn’t mean that we outsource everything we don’t like or find beneath us in business. Part of keeping our overhead and expenses low is doing some of the grunt work ourselves – especially the stuff that we enjoy (or at least doesn't make us miserable!).
But when doing a particular lower-level activity means we don’t have time for the higher-level stuff that will actually generate revenue, then it’s imperative that we free up our time by delegating or automating.
When our time is worth $200/hr, why are we spending a bunch of time doing $20/hr work?
Or, why are we doing work that a piece of software can do, automatically and in the background, for pennies?
Now, I’m curious about you.
What is one thing you know you really should delegate or automate so you can reclaim valuable time?
Is there something that investing a small amount of money in will pay dividends by giving you the freedom to spend more time on the activities that grow your business?