3 Reasons Your Decisions Should Include Time Value
This last week we had a small tornado come through my neighborhood. There was not much damage at my house – just a couple of broken fence posts. I ended up spending four hours this weekend taking out a fence post, setting a new one, and securing the fence. After doing this, I suddenly realized how I had made a horrible decision. I wondered how, after all that I know about productivity and valuing time, how did I fall into this horrible trap, and what can I do to protect myself?
Now you might be wondering what mistake I made. I should never have spent four hours fixing this fence post. There is a guy in my neighborhood who will take out and set a new fence post for $50, and he knows what he is doing. I just worked for an hourly rate of $12.50 an hour. Not only that but I was supposed to spend time with my family and relax, which did not happen as planned. How do I put a price on that?
We all do this with our time. We don’t think of things we do in financial terms unless we are working. I started thinking about how I could prevent this and how this relates to any business.
Below are three reasons why assessing decisions based on time and money will help your business.
1. Be Proactive
Take the example of the fence again. I knew that I had old and rotten fence posts that could break at any time and should have replaced them. Believe me, I plan on replacing the last remaining four. We do this in business. Have you waited too long to put together a business development or marketing plan? Are you not spending time working on your business? Do you have the accounting and financial reporting needed to be successful?
2. Work Where You Add Value
We all have value at a certain hourly rate. If we have the capacity of bringing in $200,000 in revenue for our business, then we work at about $100 an hour. If you are a business owner of a $2 million business, then your hourly rate is much higher. Each hour that you spend doing routine tasks that are not your strengths is an hour not spent on high-value activities. What if your value is $300 an hour but you spend all day doing routine billing and accounting? I am sure there are many accountants or fractional CFOs who will help you out for much less than $300 an hour.
3. Be Ready for Unexpected Distractions
It is very easy to be distracted, tired, or in a hurry, and somehow you make a decision that puts you in a bind. This can happen quite easily. I know that my fence project was not planned to take 4 hours. Unexpected distractions from a phone call or email can happen quite easily. Do you justify doing something because you tell yourself it is faster if you do it yourself. Do you feel you don’t have the resources? How can you be more intentional about your time resource?
The next time you have a decision to face a particular task, consider if you are the best person. Be prepared for distractions to take you off of where you need to be. Be proactive so the distraction and time sucking tasks do not easily fall in your lap.