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

Time-management timizzerHow 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. I suggest 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, speaking to the letting agent, managing repairs for my properties or queries for my business – 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 8.

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 I know that 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 8 (if we assume an eight hour day) to give you your hourly rate.

time management timizzer woman

As soon as I doubled by income generation hours (green) and reduced the other hours, my 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 I suggest 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.

About Vicki Wusche

Vicki Wusche has gone from single mother on limited income, to financially free with a property portfolio worth £2m, in just 20 months.  Vicki has been investing in property herself for many years and runs a successful business sourcing property for other investors and teaching people how to invest in property. She is author of three property investment books and has helped her daughter buy her own property using the techniques she teaches in her book ‘Property for the Next Generation’. See: www.PropertyForTheNextGeneration.com and www.VickiWusche.com

Source: Panpathic Communications Chantal@panpathic.com and Sophie@panpathic.com

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