How much is your time worth?
Updated: Jun 4, 2020
When starting a business people often struggle with the pricing side of things. Pricing a product can sometimes be a little easier if there is a RRP (recommended retail price) or an industry suggested markup, but when there is an element of time involved it can be difficult to put a price on just how much is your time worth? People tend to undervalue their time initially, however, once your business is up and running, you quite quickly realise that time is your most precious commodity and there never seems to be enough of it.
The next point at where time becomes an important consideration is when you or your team is working at full capacity and yet there’s still more work in the pipeline. What are the options or solutions that could solve this issue? Many people think that employing their first member of staff or a new person to the team is the answer, but is this the right thing to do?
It is at this point that we would ask you to consider the question ‘can you be an expert at everything?’ Are there tasks within your business that only you can do, things that you are exceptional at and others where you lack knowledge, understanding or interest? If there are then we would invite you to consider whether you need to employ someone or you should look to outsource that task?
Outsourcing not only provides a solution to getting a task completed, but you will benefit from the work and knowledge of an expert in that field. For example, if you were to carry out the bookkeeping tasks in your business and it’s something that you don’t enjoy or that you are not particularly confident with, it may take you one day a month to complete the task. Whereas if you employ an experienced bookkeeper, not only could they do it in half of the time, but they may even save you money by working smarter with their expertise! Additional income could also be generated from you being able to charge for this newly found time at a higher rate than the new outsourced service you are employing.
So if you are struggling to accommodate the demand for your business and you really do value your time, we would advise you to consider outsourcing some of the running of the business tasks, because sometimes the right thing to do is to ‘speculate to accumulate’.