Are you in charge of time, or does it rule you? Do you allocate time, or do you simply manage it? The distinction may appear subtle, but the outworkings are profoundly different. Time is a precious commodity for business owners, but do you factor it into your budget? Do you count time as a resource or consider it only as it relates to deadlines?
It’s easy to treat time as never-ending and renewable, and while the sun does rise every morning, once a day is over, it’s gone for good. Most of us fail to factor time and labour into our businesses, resulting in an effective hourly rate far lower than we realise.
Time is a gift. How we spend it reveals where our values lie.
Are you looking for volume or value?
Think of time in terms of volume and value. Every minute has the same volume but not necessarily the same value.
Take a step back and look at the time you spend in your business. Do you think of labour as a resource to further your business or as a sunk cost? Labour costs are the way we ascribe a monetary value to time. It’s also one of the biggest mistakes I see business owners make. They fail to monitor labour and match it with activity. For example, many neglect to include labour costs in their cost of lead or in their customer acquisition cost.
By failing to keep track of labour, I’ve seen many businesses underestimate timeframes when quoting for jobs, leading to frustration for customers, exhaustion for them and their staff, and a general lack of productivity. Sound familiar?
A hard truth
It’s genuinely scary to come face to face with your effective hourly rate. If you’re always working with no time for what’s important to you, I guarantee you’ve treated labour as a sunk cost. In real terms, you’re putting the weight of expectation on volume rather than value.
But what’s feeding the beast? Why do so many business owners resist calculating the time it takes to do their work? I believe there’s an underlying belief that clients and customers won’t want what we offer if we charge what it’s truly worth. If we stick with this belief, we have no choice but to rely on volume to bring enough money to live.
It’s a vicious cycle that’s hard to break but can be done. The first step is to understand and, yes – get frustrated and even angry with the lack of value we’ve assigned to time. Then we have to start making small steps towards valuing our time and that of the people who work with and for us.
The Power of Purpose
Time allocation is easier when it’s fuelled by purpose. What’s your purpose? In recent years, many businesses have discovered that when time is tied to people, it becomes infinitely valuable. Take the slow fashion revolution that’s emerged in the last decade.
Unfortunately, it seems to take tragedy or a disaster to wake us up to what matters most. The Slow Fashion Revolution has its genesis in uncovering sweatshops and inhuman working conditions. Take, for example, Fashion Revolution.
Fashion Revolution was founded in the wake of the Rana Plaza disaster in 2013, which killed over 1,000, mostly young women, and injured a further 2,500. The tragic events in Bangladesh put a human face on the devastating human toll of “fast fashion”. Fast fashion relies on volume and speed to sell garments at ridiculous, unrealistically low prices. The actual price is paid by thousands of people earning next to nothing. We sacrifice the well-being of others so we can buy the latest trend, only to discard it within months of purchase.
The uncomfortable truth was that we in the West were willing to sacrifice the quality of products and the dignity of the creators for our quick fashion fix.
The uproar and disgust at the lack of ethics demonstrated by the fashion industry was deafening. We were outraged when faced with the outworking of consumer demand and the lengths producers went to meet it. We started comprehending that these workers’ time and effort were undertaken in dangerous conditions without fair compensation. There’s still a long way to go to ensure proper working conditions and remuneration for garment producers, but organisations such as Fashion Revolution are bringing together citizens, brands, retailers, producers, unions, educators, and journalists to take a stand.
Yes, it’s an extreme example; however, the underlying mindset is one that many small business owners embrace without even realising. They undervalue the time it takes to produce the product or deliver the service. They don’t place a monetary value on their time, effort, and expertise, and if they don’t do it for themselves, how likely are they to value the time and effort of others?
I’ve worked with client after client whose budgeting starts (and usually ends) with how much revenue they believe they can make, ensuring expenses are covered and calling the remainder “profit”. The problem is that they consistently fail to include the time they put in to achieve revenue. And if we don’t value time, all we have left is volume. Whether it’s taking on too many projects as a freelancer or compromising the quality of our products for the sake of mass manufacture, in the end, everyone loses.
Efficiency versus Effectiveness.
How often do you quote for a project while looking at time management through the lens of efficiency? When we think about time only in relation to efficiency, we fail to consider how effective we will be.
Effectiveness is directly linked to how we allocate time, while focusing on efficiency leaves us at the mercy of deadlines.
But what if efficiency is a false economy? Efficiency is tied to volume over value, it’s connected to the speed of delivery over quality, and while it may initially satisfy the need for instant gratification, people will subconsciously connect your product or service to a lower value.
When effectiveness outguns efficiency, we’re starting to allocate time rather than manage it.
Where do you spend your time?
Time allocation is all about where you spend your time. Are you spending time on the right things? What can you do to make the most effective use of time?
What do you do with time?
Do your work deadlines take your discretionary time into account? Do you sacrifice rest and sleep to get the job done? There’s no judgment here; we’ve all done it. We work late to meet the deadline, whether self or other imposed. Yet, in our desire to be efficient, we fail to consider what will be the most effective use of our time.
Efficient time management doesn’t consider other factors. For example, if you’re most productive when well rested and relaxed, do you consider sleep and recreation when you quote? Efficiency is linked to money; we’ll discuss billable hours later, but my experience and recent observation tell me that when time and money go head to head, unfortunately, money is usually the winner.
It's time to flip the narrative.
It’s time for a mindset change. Rather than being the last thing you think about, time is the first resource you need to consider in your business. You need to allocate time to three critical areas; sleep, personal time, and work. Instead of focusing solely on work efficiency, how about assigning the right time to rest and look after yourself?
For many, that’s a revolutionary thought. We’ve grown up believing we must do whatever it takes to get the job done. Speed and efficiency have been held up as values to hold and virtues to aspire to, and we’ve even made them proof of productivity.
But are they? We’ve cheated ourselves, customers, and clients out of our best for the sake of expediency. Quicker doesn’t equate to better. If you’re meeting unrealistic deadlines but depleted physically, mentally, emotionally, and spiritually, no one’s getting value for money. If your quoted timeframe means sacrificing rest, sleep, and recreation, you won’t deliver the best outcome for your customers. You’re working with a false economy.
Embracing Rest & Rhythm
Rest and rhythm don’t come naturally for most people. And it’s more than grabbing some rest and stumbling about until you find a rhythm for your business.
When I talk about rest and rhythm, it’s an intentional process. It starts with establishing a rhythm of rest, a way of incorporating rest into your life that means you don’t need a rest from your activities because rest is part of the rhythm of your life.
Once you’ve established rest, it’s time to look at the rhythm of your whole life, including your business. It feels counterintuitive, but if you set rest and rhythm as the foundations for your business, they will help you develop the right pace. When you start valuing your time, you’ll feel more comfortable setting a monetary value for your products and services.
Productivity and growth happen when we make room for what we love
Time allocation is about knowing what to do and when to do it. I’ve been in networking meeting after networking meeting, and hands down, the most common thing I hear from business owners is their focus and fears around productivity and growth.
But scratch the surface, and they are really talking about volume and efficiency. We need to flip the narrative and start talking in terms of value and effectiveness. The key to productivity and growth isn’t pumping out products and services cheaply while our well-being and relationships suffer.
The key to true productivity and growth is establishing rest and rhythm, making room for the people and activities we love. Prioritising our inner circle, be they partners, children, parents, or close friends, is a great start. Looking after yourself, whatever that looks like, is a fantastic productivity boost.
Getting up and exercising first thing in the morning has been a productivity booster for me. I’ve discovered that exercising in nature refreshes me more than pumping iron in a gym, so I start my days walking the hills near my home, often in the dark.
The key is to do what works best for you!
As I’ve talked to business owners, I’ve discovered an assumption that they’re being productive if they charge billable time. Many companies look to achieve 80% for billable hours and disregard the remaining time. The underlying message is that activity is only really commercial if money is directly attached. But the reality is that time spent on foundation and creativity can be equally commercially valuable because people become drained, exhausted, and lose productivity without it.
Time to make a change?
It’s all very well to recognise the issue, but the critical next steps are understanding how you got there and finding the way out. It’s where a business diagnostic comes into its own.
Life is short; it's time to make your business work for you
Ultimately, time is our most precious resource and the one thing we can’t get back. If you’re ready to work on your business, not just in it, we’re here to help. Our mission is to help you move from constant busyness to effective business.
If you’ve found yourself at the mercy of timelines and deadlines, it’s not too late. You can take back control and turn time into a resource that works for you, your life and your business.
So how do you learn to value and allocate time?
You were created to allocate time, not just manage it. You were born to use your time wisely to create personal freedom, flexibility and fulfilment.
You can create a recipe with your time that allows you to find your unique rest and rhythm. It needs to be based on value, with time allocation determined by the value you ascribe. A genuinely effective hourly rate provides the time to complete your work while providing freedom, flexibility and fulfilment.
Choose your big rocks wisely
You must ensure you have personal and business big rocks in place to calculate your effective hourly rate correctly.
Personal Big Rocks
Sleep is foundational to life. Establishing a healthy rhythm of rest will set you up for everything else. Then there’s personal time, which includes family, friends, recreation, and discretionary time for yourself. Taking care of yourself and those you love helps you enjoy life, not simply survive it.
Business Big Rocks
Administration and finance are the foundational daily tasks that help you execute strategy and deliver for customers and clients. Marketing and innovation are those activities that drive you forward, creating value in your business and allowing you to build leverage. These activities are about value creation. Sales and operations are the pointy end of your business, value execution. You need to allocate time to the foundations, the value creation, and the value execution of your products and services. Protect these big rocks, and you’ll reap the return on investment.
It’s never too late to start valuing your time and effort in business. And while it seems like a significant and even fundamental shift, I guarantee it’s one you’ll never regret.
Book a 15 15-minute complimentary Discovery call today and start the journey towards a sustainable rhythm for business success.