In Module 1 of the LinkedIn Business Strategy Course, I walk delegates through a simple process of calculating their hourly billable rate. This works by identifying your annual earning target, identifying the time per week required within the business for admin and marketing, and your available time for working with clients. Once you know the time you have available to sell, you divide this by the annual target to produce an hourly billing rate.
Having this number to hand is absolutely vital within your business because it allows you to quickly see how much each activity is costing you within your business and whether you or someone else, would be better off completing it.
So my question to you is, did you earn that amount of money this week or did you spend time developing new things within your business?
I ask because, while we think that our developments are valuable, they really are only valuable if they deliver a return on our investment. We may think it is just our time, but our time is money. If you’ve completed the calculation above you’ll know just how much.
In the early days of my business, over a decade ago, I spent an entire week creating a brochure to pitch my business (note I said my business, not my packages – there is a big difference). After spending all that time creating it, I never actually used it in my sales process or showed it to anyone.
I calculated that the week I had spent creating it had cost me £1000.
For every hour I spent on it and wasn’t out earning my hourly rate, I was falling short of my annual target. I had to consider the real cost of my living and the opportunity cost.
I would challenge you to consider – do you have £1000 to invest in a specialist to create this for you?
If the answer is no, then you’ll likely have to do it yourself. This is fine for the first draft in the early days of your business. However, sometimes we invest far too much of our time in tasks that will never pay off. There might be other tasks you could be doing today that will help you arrive at your outcome far faster than locking yourself away building something.
Often locking ourselves away to build something can feel like progress, when actually we are avoiding difficult, less attractive tasks like phoning prospects and booking sales appointments. It’s very easy to get distracted.
With all the tasks we undertake in our business, we need to ask ourselves ‘will this task take me further towards or further away from my outcome?’ or ‘is this task the quickest way to achieve my outcome?’ With these questions of course comes the need to be very clear on your outcome and what you are trying to achieve. Strangely, many business owners are often confused as to what their outcome is or have their focus in the wrong direction, just by the slightest point, and then miss the goal by a mile.
A brochure, a website, a quiz… these are all great assets to have in place, but they take time, they take development and they can’t be created in isolation.
Your outcome must be to win new sales. So when you ask the question ‘is this task the quickest way to achieve my outcome?’ you’ll probably find the answer is no! Phoning the person you met the other day that was keen to know more would get you there faster.
The more you get out there and meet people, the more you’ll understand their needs and the more you’ll know the solution they need. The more you talk to people and pitch your solutions (no matter how new) the more chance you have of winning customers and the more customers you have the more results you have to demonstrate the value you provide. As this gets clearer so will the creation of the brochure and the website. And all the while you’ll be making sales to fund them!
Things to consider.