I talk about the value of time quite a bit with colleagues and clients. We talk about what’s eating away the hours, the benefits of delegating, how it works to have a “virtual” team, and the goals we are all trying to achieve.
Then we talk numbers.
I have this handy little chart I’ve used for years. It’s admittedly very elementary, but it’s effective at showing where you’re leaving money on the table by not getting the support you need. This is especially easy to determine if we’re working with billable-hour business models.
Let’s say your billable time is worth $100 an hour (which I’m only using to keep the math simple … I can practically guarantee your billable time is worth a lot more) and you spend 4 hours a week on non-revenue-generating tasks. You’re basically giving up potentially $400 a week in billable hours… or $20,800 a year!
x 4 hours/week
$400 per week
Otherwise looked at like:
$400 per week
x 52 weeks/year
You’ll never bill for those hours because, unfortunately, nobody will ever pay you for those tasks.
Say you outsourced some of those tasks to a service provider who specializes in business support – a bookkeeper, a virtual assistant, a copywriter, a Website expert, a virtual receptionist, etc. You pay that specialist $50 an hour to tackle those 4 hours of non-revenue-generating tasks every week (or roughly 16 hours every month).
At the end of the month, they will send you an invoice for $800.
X 4 hours/week
X 4 weeks/month
If your time is worth $100 an hour, and you just gained back potentially 16 hours of billable time in a month, you’ve just earned a minimum of $800 in potential revenue after paying for some much-needed support.
$1600 in potential revenue
– $800 fee for services
$800 in potential revenue
That $800 per month … or almost $10,000 a year …. will remain out of reach until you have support because you’ll continue doing it yourself. Nobody will ever pay you for that time or those tasks.
As I mentioned, I used these numbers to keep the math easy. Now do the math using what your billable time is really worth. $150/hour? $200/hour? $400/hour?
If your typical billable hour is $150/hour, for example, and you hire an expert for the same $50 an hour to do those 4 hours worth of work, you potentially opened up more than $20,000 in annual revenue.
Now consider the work you do that’s arguably worth even MORE than your typical billable hour … strategic planning, business development, product or service innovation, etc.
The bottom line is the cost of your support team remains the same, but your potential revenue increases significantly.
Business owners need to spend their time growing their business, generating revenue, strategizing, innovating, and exceeding customers’ expectations. They don’t need to spend time managing marketing touch points, or updating their Websites, or researching vendors, or maintaining their social media, or reconciling their books, or answering their phones, or any number of other process-driven, systems-based tasks.
Invest in growing your team and stop bumping your head against the ceiling of capacity.
Rachel Rasmussen is the owner of Rescue Desk Virtual Assistant Services. Since 2008, and she and her team have been an "executive assistant for hire," helping overworked business owners make their to-do lists more manageable. Read more of Rachel's musings on business, life as an entrepreneur, and making the most of all of it on the firm's blog.