“Remember that time is money.”
As a small business owner/entrepreneur you spend countless hours thinking about and working on your business operations. The question is – are you using your time wisely? In other words, does the work you do contribute to generating revenue or sales?
No matter if you are selling goods or billable hours as a service based business, you need to maximize your revenues. The objectives of any successful business owner are to:
2) maximize revenues
That being said, what tasks do you accomplish during your working day that meet one of these objectives?
If you are working on a task that does not generate revenues or reduce expenses you need to understand the outcome of doing so. Perhaps, this task will eventually lead to a cost reduction or new revenue source. Be honest with yourself when analyzing your work.
Taking the time to review which tasks can be more effectively delegated to an external resource, whether it’s a family member or another business, is especially important for one person business operators. As a sole proprietor, you need to focus on what you do best.
Here’s an example. Joe, a business owner, is not very skilled in bookkeeping. Joe could spend quite a few hours studying how to do the monthly reconciliation of accounts. This may take 10 hours of “money time”. He may contract his bookkeeping to a sub-contractor for a few hundred dollars per month. Is Joe’s time better off spent studying for 10 hours, as an opportunity cost? Could his time be better spent on generating sales during that 10 hour period? How much does bookkeeping cost his business each month, and would this amount be less or more than the lost revenue from studying bookkeeping? How much revenue could Joe generate in the time it takes to learn and do the books each month? What are the real and opportunity costs?
Benjamin Franklin also said, “Lost time is never found again.” The job of the business owner is to recognize this, use your time wisely and make decisions in the best interest of the bottom line.
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