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Have you thought about the investment you are putting in to your business? Are you working for less-than-desired results? Or are you satisfied with the return on your personal exertion investment?
I find that about 75 per cent of small business owners have a disconnect here. The issue of maximising the return on each hour you work can be a tricky one and it can be another thing that is holding you back. I call this the Hourly Rate Identity Crisis.
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To see whether you’ve hit this crisis, answer the questions below:
• How much do you charge out for your time an hour?
• How many hours on average do you work a week?
• How much did you pay yourself last month?
Is there a disconnect?
Chances are you have worked out what an hour of your time is worth, based on your skills and experience. This isn’t where the problem usually lies. The issue is: how many hours a week do you actually earn that rate? Time is a finite resource so it’s crucial that you put it to good use. If you have an identity crisis here it can spell trouble.
What activities should you be doing to give your business the best outcomes for each hour you work? Be clear about who you are, what you do, and why. The best opportunity for your business is to build one reputation for doing one thing, then add to it. Ask yourself: what’s my one thing? What am I actually worth an hour? Why? What are the activities that I do daily, weekly and monthly that help me ensure I achieve that rate?
The next question is: how many hours a week do you work on average? Most business people I know can answer this question quite easily, so now you should have two figures: an hourly rate that you believe you are worth and the average number of hours you work per week.
Now you can calculate what you are worth per hour multiplied by how many hours you work on average per week.
But here’s the kicker: when was the last time you took home a weekly pay cheque close to that amount? Sadly, for some business owners the answer is never, which may indicate you have the mindset of an employee or a self-employed person instead of the mindset of a business owner in growth mode. If this is you, this is a huge wasted opportunity for your business.
So if you’re not taking home close to that amount each week, what’s the problem? If you’re not skiving off and going to the beach then clearly you’re spending time at the office doing tasks you shouldn’t be doing. I’m not saying those tasks don’t need to be done, just that they don’t need to be done by you.
What about if you are achieving this every week? Does that mean everything is peachy? Not at all. If you are reaching this target every week your hourly rate is too low! Nobody can work at their maximum achievable hourly rate every single hour for a whole week, let alone week after week, so if you think you are doing this you need to increase your hourly rate. There is clearly room for you to do so and you are currently missing out on this opportunity.
Now comes the key question: once you’ve embraced how to spend your time more profitably, what would it look like if you invest just one hour per week with an added zero on your hourly rate?
If you’re worth $100 an hour, what sort of high-value strategic work could you be doing that generates $1,000 an hour? What long-term planning could you do that will give you a 10-times return? What new product or service can you come up with? What new market can you identify? In this one hour, you can knock on that big door you never thought would open, you can call that big client you were always scared of, you can tackle that competitor who is currently 10 times your size. It’s about daring to dream. For just one hour, throw away all those restrictions you’ve placed on yourself and just go for it. This is another disturbance in your business. Think big.
If you can’t think big and dream big then you’ll never be big. It’s a barometer for your future success. So, in this one hour, don’t just think about growing your business, think about its true potential, what it could be if you broke all the chains holding you back right now. Whatever you aim for is the best you will achieve, so if you think you can only grow by 10 per cent in the next year that’s the best you can hope for because you’ll make all of your decisions based on this assumption. But what would happen if you went for 100 per cent growth in the next year? Impossible? Certainly not. I’ve seen it happen many times. A key ingredient has always been thinking big and believing it can be done.
When you start to see the results of thinking big you’ll want to find two of those hours. And then three. That’s when the miracle occurs. That’s when the light-bulb goes on and you can see that maybe you’re not deadwood after all and that you can turn things around. Now you are working at a higher level. This is how you turn an everyday business into a profit machine.
Stefan Kazakis
Stefan Kazakis is a business strategist, sought-after presenter and speaker and author of the new book, From Deadwood to Diamonds (Major Street Publishing, $29.95). He is a futurist and an inspiring communicator with the voice of experience. For more information please visit www.stefankazakis.com or email
