How Do You Spend Your Time?
Most people don't like to
think about sales, but regardless of your endeavor, finding the source of your
cash flow is the lifeblood of your venture.
Time Allocation Formulas
Experts disagree on exact
percentages about how to spend time. Keep in mind that needs change over time.
A new venture will require almost all sales and marketing, 80% to 90%, with
little time devoted to the actual product or service. Later, when a customer
base is established, less selling will be required.
60 - 30 - 10 Rule
30% on making or providing products or in service
delivery (= 12 Hours)
10% on administration and management (= 4 Hours)
- Or simply, prioritize your time as marketing - making - managing.
40 - 20 - 30 - 5 - 5 Rule
Allan and Steve at LessEverything
advise:
40% Doing work that pays = 16 Hours
30% Marketing = 12 Hours
20% Learning new things = 8 Hours
5% Running the Company = 2 Hours
5% Getting Inspired = 2 Hours
- Are you spending at least 12 hours per weeks on marketing yourself? Probably not.
- Can you live on 16 hours of paid work a week? If not, time to change things. You need a higher hourly rate or to cut your living expenses.
24 Hours a Week on Sales and Marketing
Allan and Steve’s numbers work for them because
they have a partnership. Businesses that have more than one owner tend to
generate better profits and are more likely not to fail. While Steve and Allan
are only putting 12 hours each into marketing and sales, together they are
completing 24 hours, equal to what Sue needs to stay in business as a sole
proprietor.
While companies may hire marketing or sales help,
most small businesses don’t have those kinds of resources. Likely all the sales
and marketing duties will fall to the owners in companies that generate less than
$5 million.
Doing Work
Sue spends 12 hours a week on delivery of her
services, while Allan and Steve have a combined total of 32 hours. The latter could
be a more labor intensive business, which requires more working hours from
Allan and Steve.
If Sue owns a business which competes directly with
Allan and Steve, she must be able to charge higher rates (best choice), hire
help, or be able to live on 12 billable hours instead of the 16 billable hours per
owner generated by Steve and Allan.
4 Hours a Week on Running the Company
Sue is spending 4 hours a week on running her
company, while Steve and Allan’s combined 2 hours apiece also equals 4 hours.
Learning New Things and Getting Inspired
Allan and Steve have allocated 10 hours each, or 20
hours per week combined, to learning new skills and getting inspired. Sue,
while running her business by herself, doesn’t have time to engage in these
activities during a 40 hour work week.
Is Sue wants to have the same level of learning and
inspiration as Steve and Allen, she must work 60 hours a week instead of 40.
Otherwise, she is spending her time on running her business without being able
to focus on new markets and expansion.
Conclusion
Both rules advocate only spending 4 hours a week on the actual administration of a business, and 24 hours a week creating a sales pipeline and generating exposure. If you aren't sure how you measure, spend a week tracking your time. You may be amazed to find it's time to change your schedule.
Not sure how to proceed? Business coaching can be a good start.
