Working On Your Business Is Valuable
I want to talk about how saving a job is costing you a fortune. What I mean by this is if you’re a business owner and you spend a lot of time working on the tools it means that you don’t spend the time working on your business to help grow and improve it.
As an example I work with a plumbing business with six people and the key guy loves to work on the tools. As a tradesmen you’re forever drawn to working on the tools but if that displaces much more important things like working out how to win the better projects that have better margins or training your team to take over roles that the business owner is currently doing then chances are it’s actually costing your fortune.
Your Hourly Rate Will Surprise You
This applies to every business owner that I know out there. So what to do about it? What we do is look at your hourly rate and as an example this business owner makes $200,000 profit a year which works out to be about a $120 an hour for the business owner.
That’s how much he’s earning so lets make a list of all the activities that this business owner is actually doing and assign an hourly rate to those activities. If they happen to be less than his rate of $120 per hour he should be on a mission to delegate that work or hire someone outside that business to do it.
In this case of the plumbing business they pay their staff about $30 an hour for most plumbing work so if the business owner is doing jobs that he could pay another plumber to do he is actually spending $120 an hour rather than spending $30. Whereby he should be using his time on $120 hour tasks like effective quoting, customer relations, marketing and other business growth activities.
Real business growth comes from valuing your time and doing activities that are difficult or way too expensive from other sources.