Time is a limited resource that must not be wasted and this is something a lot of successful entrepreneurs truly believe in. Sad to say however that some people, who are just starting a small business, still think that money is a lot more important than their time.
To explain this further, let me tell you about a client of mine whom I met with just last week. Though he is a very successful businessman, I was really surprised at how he gave a lot more importance to money rather than his own time.
He just finished typing something on his computer as I entered his office. He told me that he was just punching the numbers into Quickbooks. Apparently, he spends around an hour every day doing this. When I asked him why, he simply said that training or hiring someone to do a simple task which he could do himself is not worth the time.
Though there are companies that have the staff to do this, other companies prefer to hire the services of an accounting firm in order to do this in a more effective manner. Regardless of what you choose to do, you really don’t need to be a bookkeeper to punch daily sales into Quickbooks.
If you think about it, this client of mine earns around $200,000 a year after taxes. With the two weeks vacation, this would mean that he makes around $150 an hour working 40 hours a week.
When you are starting a small business, dealing with a lot of details on a daily basis is expected. However, when you are running a large company and making six figures in profit alone on a monthly basis, you might want to rethink stuff.
The truth is a lot of business owners spend only 20% of their working time creating real value. Now if my client would only delegate the menial tasks to his staff and spend more of his working time being more productive and creating real value, then he would be multiplying his hourly rate by 80%.
Now if you earn around $600 an hour, it really does not make any sense to spend even an hour of your valuable time doing some bookkeeping, cleaning windows, vacuuming floors or anything in the business that you could delegate to the staff for an hourly rate that is a lot less than $600.
I really could not find the logic in why he is doing this. So I politely told him that if he really thinks about it, the 260 hours he spends on punching the numbers every year is worth $156,000 of his valuable time. I also told him that there are a lot of business entrepreneurs who are guilty of making the same mistake. He was completely shocked at what I said…but this sure as heck made him think about things.