Why you should calculate the true value of your time — and how to do it right
Don’t let your valuable time slip through your fingers by trying to do it all.
Calculating the true value of your time is a MUST if you want to grow your business.
Most small business owners start a company because they see a need and know how to meet it well. They’re great at what they do, but often quickly realize that owning a business requires substantial time spent focusing on everything but the thing they originally set out to do.
Whether it’s emails, phone calls, marketing, or accounting, it can all bog you down and steal your time.
Not to mention all of the personal distractions, like our phones, social media, or the news. It’s rough out there!
What would happen if you were able to recapture some of those hours?
Would you spend them out getting new business or nurturing existing or past client relationships? Maybe you’d spend them serving more clients well, expanding your available hours. Or you could focus on continuing education or spending more time with family.
Regardless of what you choose, your time is yours — or at least it should be. So how do you take back your time? First you need to understand its true value.
Your time is valuable.
What would having more of it mean for you?
How to calculate the true value of your time
Once you know how much your time is truly worth, it puts everything else into perspective and allows you to make informed choices.
Start by following the steps below or if you’d prefer a printable version of this guide, click the button below to instantly download a free PDF with the same information.
Step 1: Find out where your time is going now.
First, estimate how many hours you work in a normal week: _____ hours/week
Then estimate how much time you spend in the following categories each week. Break this down into hourly blocks of time and feel free to add additional categories if you have other elements in your business.
Administrative - such as emails, phone calls, CRM/software notes, spreadsheets, anything back office related.
Administrative: _____ hours/week
Marketing – such as content creation, social media posting, follower engagement, writing blogs, recording podcasts, digital or email marketing, and networking events.
Marketing: _____ hours/week
Financial – such as banking, billing, bookkeeping, taxes, or budget creation/management.
Financial: _____ hours/week
Add these three categories up.
Total Back Office Time: _____ hours/week
Next, calculate how much time you spend doing your actual job: _____ hours/week
You know, the thing you got into business for in the first place? Aka, your “Zone of Genius,” according to Gay Hendricks, author of The Big Leap.
For example:
If you’re a Massage Therapist or a Naturopath, how many clients/patients do you see in a week?
If you’re a Real Estate Agent, how much time are you spending serving your clients, whether that’s through showings, phone consultations, virtual meetings, or contract negotiation.
Step 2: Calculate the true value of your time.
First, calculate the value of your time in an hourly rate: $ _____ per hour
For some, this is a super easy step, such as “I charge $150/hour.”
For others, it’s more nuanced if you charge a flat fee or package price. If that’s your case, take the hours you normally spend on a package or project and divide that by your flat rate to get an estimate of the value of your time. If you have multiple packages, do this exercise for each one and take the average. Or you can let yourself have a range here.
If your income is highly variable - another simple way to do this is to calculate your average monthly income (I’d look at the last 3-6 months as a reference) and then divide this by the average number of hours you work in a month.
Next, take the hours/week you spend doing your actual job (calculated above) and multiply this number by your hourly rate.
This number is an estimate of how much you’re bringing in a week from your actual work. Let’s call this your “Zone of Genius Value.”
Zone of Genius Value: $ ________ per week
Now, calculate the weekly opportunity cost of the time you’re spending out of your Zone of Genius.
How to do it: Multiply your Total Back Office Time (calculated above) by your Hourly Rate.
Opportunity Cost: $ ________ per week
Normally, this Opportunity Cost ends up being substantial!
Now what?
It can be a shock for small business owners to really see how much time they’re spending NOT doing the work they set out to do. And while it may not be realistic to expect you will do away with all back office work, this number does give you a strong indication of what you’re leaving on the table each week or month.
So how do you unburden yourself when you realize your time is worth so much more if you spent it working with your clients or on business development?
We’ve developed a 3-step process to help small businesses and solopreneurs take meaningful first steps toward taking back control.
Step 1: Take a good look at your business systems and back-office processes.
Ask yourself…
What tasks are you spending too much time on?
How dialed in are your day-to-day processes?
Does the software you use make your life easier or frustrate you?
Do your systems talk to one another or are you duplicating your efforts?
Do you have templates for repeatable tasks?
What have you automated and what needs automating?
Think creatively here. What do you wish you could have someone do for you?
Step 2: Ask yourself, what would it be worth to me to delegate some of these tasks?
If I reclaimed _______ (number of) hours, what would I do with that time instead?
Sometimes the answer is go out and make more money. Other times it’s reclaim my energy, fitness, or become a better spouse, partner, parent, or friend. Regardless of what you choose, it should feel like your choice, not someone else’s.
Step 3: Take action towards delegating tasks that are not worth your time or are not in your Zone of Genius.
This part can feel daunting at first, but taking the time to do this will save you countless hours in the long run.
Start simply and think about your personal life first. Do you need to finally hire that house cleaner or yard service? How about opting for a meal delivery service or Instacart to help you save time? Fun fact, did you know there are companies that will wash and fold your clothes for you?! The opportunities are endless here and remember that the more time you save, the more time you have to go out and make the $$$ you need to automate parts of your life, and then some.
Now let’s focus on your business life. Start with the answers you came up with in Step 1 and ask yourself, what level of professional do I need to accomplish these projects? One of the easiest ways to do this is to think, if I hypothetically hired someone for this role, what would I want their job title to be? Assistant, Executive Assistant, Bookkeeper, Office Manager, Operations Manager, Chief of Staff?
There are many individuals and companies out there who thrive in helping business owners accomplish more, automate their systems, or implement special projects, such as virtual assistants, freelancers, and consulting firms (like ours! 😉).
When determining who you want to work with, look for someone who exudes competence, who you could see yourself collaborating with, who has the expertise you’re looking for, and who is committed to working within the time frame you need.
Looking toward a better future
It can be hard to put numbers to what you already know: you’re likely losing time, money, and sanity by trying to do it all yourself.
What you’re experiencing is normal. Just ask any business owner! We’ve all been there... The question is: what can you do to turn things around, reclaim your time and your sanity, and grow your business strategically?
You’ve got this. And you’re not alone.
At Dickson-Lein, our Zone of Genius is the gift of time. We focus on your back-office operations and special projects so you can focus on what’s most important to you.