“If you don’t know what your time is worth, you can’t expect the world to know either.”
Every time I go through this exercise with people it completely changes their perspective on what they do with their time. Underst anding the true VALUE of your time will literally change your life!
Dan Kennedy’s Time Management for Entrepreneurs is a must read for any business owner! I’m sure you have read time management books before, but this one is a little different! What I go on to describe below is one of the BIG NUGGETS I took away from this book. It changed my perspective and I’m certain it will change yours too!
In the book Dan describes how he manages his time when doing his thing, it’s not theory…it is practice. He describes how he applies time management to his life and how he gets the best out of his time. The great thing is that he doesn’t prescribe action, he just tells you what he does and you can take away what you want from his advice.
Underst anding the value of your time
This is a simple exercise but the value it adds is incredible. This is the value it will add to your life: –
- You will know and underst and the value of your time and therefore every time you work on a project you will put that amount of value into it, regardless of what it is;
- You will choose carefully the projects you take on to ensure that it is worthy of your time;
- Underst anding the value of your time will develop your underst anding and respect for the value of other peoples time;
- You won’t waste time and you will choose your actions more carefully, e.g. I try to have no more 40 minute telephone conversations – I answer the phone when I have time; I remove myself from distraction and I don’t spend time doing things that are not worth my time;
- Other people will start to underst and and respect the value of your time.
A great example in the book is where Dan kennedy goes off on one of his rants about $5 per hour jobs. It might come across as quite strong, but I think it is needed to get the point across!
“It used to make me crazy to drive around and see somebody in my sales organisation out shovelling, mowing, or raking. I’d say: if your time isn’t worth more than the $5 an hour that you could give to some neighbourhood kid, then you should be shot. Plus you are robbing some kid out of the money.”
Think about all the things you could stop doing so you can spend time on the things that are much more valuable to you!
Calculating the value of your time
“This little number may just change your life”
Work out what your base earnings target is for the next year – how much do you want to earn in a year?
Divide this by the amount of work hours in a year
– There are 45 working weeks allowing for 7 weeks holiday, multiply by 5 working days = 225 working days
– Multiply by 8 hours to get the total work hours in year
– 1800 working hours per year
Times productivity vs. non productivity multiple (x3) (The productivity multiple used by Dan Kennedy is one-third productive, two-thirds other, which is very generous)
The calculation result is what your time is worth per hour.
Base Earnings target = £100,000 per year
Base Hourly Target = £100,000 per year / 1800 working hours per year = £55.50
Account for non-productivity = £55.50 x 3 = £166.60
In this example your time is worth £166 per hour.
Why you need to do it
“If you do not have a base income target, then you cannot calculate how much your time is worth, which means you cannot make good decisions about the investment of your time, which means you are not exercising any real control over your business or life at all.”
What you should do now
A lot of your decision making gets easier with this number staring you in the face!
Write the number down on large post-it notes and stick them up in your office or anywhere you will see them often. I have mine displayed on my computer monitors, my white boards, etc.
This blog post is based on Dan Kennedy’s Time Management for Entrepreneurs, Chapter 1, Pages 3 – 10
Buy The Book
Comments & Feedback
(The Facebook Plugin may take a few seconds to load)