If you want to increase your earning ability, then you have to learn how to leverage your time better. Being able to manage your time effectively is one of the major differences between earning an average income and living by the beach. Time is money! No matter what you do or how you do it, you are trading your time for money. So if you are ready to take the next step and earn the “big bucks”, learning to maximize your time spent is a must.
Treating Your Time As Inventory
Think of time as inventory in your business. You have only 24 units of inventory a day. How you use those units will depend on how much you make. Almost half of your units per day are going to be used on sleeping, eating, and generally day-to-day activities, so you have to figure how to maximize the return on the other half. If you trade 10 of those units for $100 each, then you have made $1000 that day. However, if you waste 3 units watching TV, 2 more talking on the phone, your potential for income keeps drifting away.
How to determine how to use your units (time)
Given this theory of limited time and units, it becomes harder and harder to determine when and how to use them. Measuring your results is usually the best way to determine your unit usage, but that does not always work. For example; lets say you are working as a bookkeeper. You know that every couple of years you have to take some courses and read some books to refresh your knowledge on the general accounting principles.
So how do you measure the results usage of time when learning something, building something, or working towards something? This becomes a judgement call for the most part, knowing yourself, and what end results you can achieve from taking the action that you are currently taking. You are your own worst enemy when it comes to deciding how you should use your time and whether the action you are taking has value.
Increase your rate until workload goes down
It never ceases to amaze me when I hear about people turning away work because they are already to busy. If you and your business are to the point where you have to turn away work because you already have too much of it, then you are charging way too little.
Your hourly rate should be determined by your workload. If you are charging $80 per hour and turning away work, raise it to $100. If still turning away work, go to $120. If at $120 you find you are not getting enough work, lower it down to $110. Continue the process until you find the sweet spot of charging just enough to keep the work coming in, but not so much that you are turning it away.
Productivity becomes your best friend
We all know that productivity is important and a lot of people are moving to a Getting Things Done (GTD) lifestyle. What most people don’t realize, or even think about, is just how much money is left on the table by not being productive. Let us take an average scenario that everyone here experiences. You stroll into the office (home or outside), you sit down at your desk, and you try to figure out what to do first today. Right off the bat most people spend about 30 minutes just trying to figure out what tasks they should do first. Another 30 minutes deleting email, mostly SPAM. So after about one hour you are ready to start on the days work, but you don’t have a precise measure of what next action you need to take.
The experience above is common for most of today’s office workers and business owners. If your hourly rate is up around the $100 an hour range, or at the new sweet spot of $110 we talked about, then do you know how much money you are leaving on the table?
(1 hour a day at $110) X (5 days a week) X (50 work weeks)
= $27,500 in lost income
If I had time I could point out all the areas where you are loosing money, but I’ll leave maximizing your productivity up to another article. So now that you have seen just how much money your time can be worth, start making the most of it. Maximize your time efficiency if you want to realize your maximum earning capability.
