Are you making the best use of your time?

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 to do and others never seem to have enough?

If you want to be more successful, you need to use your time in 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.

A few years ago I sat down and worked out what my time was worth and how I wanted to spend it, and for the past two years my annual income has doubled. Here are my 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 – direct hours that clients are paying for.
2. Income Speculation – Blue – time spent looking for opportunities to invoice.
3. Income Saving or admin – Amber – time spent preparing accounts, meeting your accountant – anything that would save your business money, or prevent money being wasted.
4. Fun (income spending) – Red – everything else (eg 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 so – great. If not – don’t 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, you need to work out what your time is worth in financial terms. Here is how: 

1. Choose your target salary for the year and divide it by 10 months (10 months allows for time off over Christmas, Easter and other holidays.)
2. Then divide your monthly figure by eight.
   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 eight (if we assume an eight-hour day) to give you your hourly rate.

As soon as I doubled my 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, I suggest that you are not generating enough income (or invoice-able time), so 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 bookkeeper, for example, is worth every penny, because you reuse the time gained to work for and invoice your own clients. You can make informed decisions about certain activities and their business value.

Time and money are our two greatest assets. If we use them well 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 if you are to meet your goals.

Posted in: Start up Business Ideas, Time Management