Do you remember the excitement you had when you first opened your business?
I do. Thoughts of financial independence, leading a team, helping the world through my work, and being able to experience life with my family and loved ones filled my heart and soul. Mixed in with excitement was the natural fear most business owners experience of no longer having a paycheck. It was a dream come true.
After a couple of years, my dream of owning a business turned into a nightmare. Although sales were growing, I found myself working 80-100 hours a week, seeing my family far less than I would like, and not making the money that I was seeking to make. Many nights I stayed up thinking of all those people working for someone else getting paid the same I was while working a lot less.
Then, I asked for help. I learned at a young age to find someone that has accomplished what you wanted to achieve and then follow their path. The first truth that I learned was that a business owner’s most effective use of time is one of three things: selling their product or service, investment in their team, and establishing the vision for their company. I compared this list to the tasks I was doing each day and found that I was spending a ton of time doing things that could have been delegated to other people without hurting cash flow.
Once I started freeing up my time, I found that the quality of my work went up because I wasn’t exhausted all the time. In addition, I began to the things that I love to do versus the things I had to do. This made all the difference in the world. For the rest of this article, I am going to lay out for you the exact steps to take to make more money while working less.
STEP 1 – CALCULATE YOUR HOURLY RATE
The only asset you cannot get back is time. However, few people have an understanding or value how much one hour of their time is worth. As a business owner, your time is worth the previous twelve-month revenue number divided by 2,000 hours per year multiplied by seventy (70) percent. Therefore, if your previous twelve-month revenue number is $1,000,000, then your hourly rate is $350 ($1,0000 divided by 2000 hours per year multiplied by 0.70).
The rate calculated in the paragraph above is the average hourly rate of all the tasks that your do in your business. This means that there are tasks that you do each day that are worth more than your hourly rate and tasks that you do that are worth less than $350 an hour. The key is to delegate low value tasks so that you have more time to do the higher value tasks such as marketing your services, selling your services, investing in your team, and establishing the vision for your company.
STEP 2 – USE CONTRACTORS OR VIRTUAL ASSISTANTS TO DELEGATE TASKS
We live in a global business worlds. There is talent all over the globe that is dying to tasks those low value tasks off your plate. One of the best places to find part-time talent is upwork.com. Upwork.com is a database of specialists in accounting, payroll, operations, project management, human resource management, website development and design, social media specialist, data miners, PowerPoint specialists, Excel specialists and a whole host of other talents that can easily free up your time.
Upwork.com rates each of the specialists within the network so that you can have a good idea of what you are getting them prior to hiring them. In addition, you can set a ceiling on how much you pay them each week so that you can control your costs.
STEP 3 – TRACK YOUR ESSENTIAL BUSINESS METRICS
After working with over 250 businesses in my career, I find that the business owner and the employees are often busy being busy. On other words, employees are working hard but not much is getting done. This is because the business owner has not established specific, measureable, and time-bound results he or she expects from each team member. If your team members have not been given clear direction then your employees are left to their own discretion, which may or may not be what you need.
Therefore, set up Key Result Areas (KRAs) for your company and Key Result Indicators (KRIs) for each of the roles in your company. A KRA is a big picture number to hit that properly detects the health of your company. Popular Key Result Areas include year-to-date sales, year-to-date profitability, number of leads the business generates, number of new client, employee retention rate, and client or customer retention rate.
Key Result Indicators come after you establish your company wide metrics (your KRAs). KRIs translate the Key Result Areas down to a position. For example, if you chose one of your KRAs to be sales, then what do you need your sales team to produce monthly to hit your sales goal? If your KRA is to retain ninety (90) percent of your existing client base, then what results do your need your operations team and your customer service team to realize that goal? Keep this simple for your first iteration by having no more than three KRAs for your company and no more than three KRIs for each role in your company.
STEP 4 – ESTABLISH YOUR ACCOUNTABILITY SYSTEM
Whatever the boss checks gets done. When you establish your KRAs and KRIs, then set up a weekly meeting to go over each of the numbers with your team. This meeting should last no longer than 30-minutes because your team will provide you their numbers one hour prior to the start of the meeting. The purpose of the meeting is to discuss ways to improve upon their performance and honor those that hit their numbers.
Here is the blatant truth: your employees want to come to work each day feeling good about their work and their performance. The reason many business owners are frustrated with their team is because they do not have time to specify the exact results they want from their team. By having a recurring weekly meeting based on their Key Result Areas, your team will start to become more and more effective and it will free up your time to do what you want to do versus what you must do.
STEP 5 – GO SELL
No one will ever be as good at selling than you, the business owner. Many business owners make the fatal mistake of hiring a sales person to go sell because the business owner is so much into the weeds that he or she has no time to go out and sell. An Outside Sales person is the last person you hire because it will take four to six months to find out whether you have the right person at a burn rate of at least $5,000 a month.
The key is to delegate all the operational tasks first to free you up to sell, invest in your team, and establish the vision for your company. Once you have done that, then go out and hire a sales person if you want to further leverage your time.