The number one complaint of many business owners is a lack of time. Here’s how to calculate which activities are most valuable to you and which you should be outsourcing.
“We look at it saying, ‘What are we currently turning revenue at the moment? Where do we want to get to?’,” says Paul Glossop, founder of Pure Property Investment.
“Let’s say, for instance, it’s arbitrary $1 million turnover a year, so let’s work out what that million dollars in a year actually looks like from an hourly basis. You divide it 48 working weeks, five days in a week, and then from there you've got eight hours in a day and that works out to be approximately 500 bucks an hour. Let’s call that every single hour you’re working.
“For me, I'll look at that 500 bucks an hour and I’ll say ‘Okay, based on that $500 an hour, let’s break down everything that we do in this company. Every single thing. From literally going and buying groceries to have fruit in the office, to running media campaigns, to sitting in front of clients, to processing settlements, everything in between.’”
Once this list has been completed, Paul explains, he does exactly the same thing with every activity that brings in revenue. With this laid out in black and white, it quickly becomes apparent which tasks are the most important to keep the business generating revenue and which essentially lose money by limiting revenue-earning time.
“[I look at] what is something that I can pay someone else to do that is less than $500 an hour,” says Paul.
“When we look at it like that, we’re still working on this process, but for me it says everything else that’s not going to be a value-add … then I say that needs to be outsourced. Does it get done straight away? Maybe not, but we need to figure out who can do that and what they can do for that and what's the value on that person.
He adds: “That sort of creates a nice process for us to understand how to value things.”
Hear more from Paul as he discusses qualifying new leads and why he caps his number of clients, on the My Business Podcast now!