Are You Wasting Your Time?

How Do You Spend Your Time?

 

Whether you own a small business, consult, or just want to create a project--how do you allocate the hours of your days?

 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

 Sue Clement at Success Coaching recommends:

 

 60% on marketing and sales (= 24 Hours)

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.

 

Which Rule Is Correct?

 It takes trial and error to fine tune which formula is best suited to any individual company. I am assuming Sue runs her business by herself while Steve and Allan have a partnership. Let’s look at the numbers based on solo versus partnership.

 

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.