Where does your time disappear?
Most of the small business owners frequently run out of time to complete their work tasks and end up working long hours. This often sacrifices their leisure time and generally reduces the potential earnings. Business owners generally spend time in the following areas:
- Creating referral partnerships and attracting new leads
- Converting leads into paying customers (eg settling loans)
- Administrative and auxiliary tasks (personal development, accounting, compliance, etc)
Larger organizations employ staff to cover each of these tasks. Small businesses however often cannot afford to employ staff and quite often one person is doing everything in the business. As a result, your time becomes extremely valuable (Have you placed yet a $ figure on the value of one hour of your time?). Due to lack of time, some businesses (e.g. mortgage brokers) often end up with the ‘seasonal’ sales volume patterns. For example, one month they will work on getting new leads and the other they spend entire month converting these leads into revenue and run out of time to attract new leads. As a result revenue distribution is uneven (seasonal) and income is reduced.
Focusing on the value added work
To resolve the ‘disappearing time’ problem, we need to understand a difference between value added and non-value added work. Every business activity undertaken consists only of the value added and non-value added time. The following example shows a difference between value and non-value added time:
Value added time refers to those activities that directly contribute to your revenue:
- Creating new referral partnerships
- Attracting new leads
- Converting leads into revenue
Non-value added tasks are those that do not add a financial benefit to the business. The examples of non-value added activities are:
- Data entry tasks
- Most of the phone calls
- Invoicing, payments and accounting
- Reporting
- Staff training and supervision
- Legal aspects of the work (contacts, policies, etc)
- Compliance related tasks
- Following up on any sales activities
Some non-value added tasks are important and have to be completed, for example the compliance-related work and accounting. However, as a rule, non-value added activities should be avoided or outsourced where possible. Have you worked out the percentage of non-value added time you or your staff spend in your business? This type of analysis is the basis of the improvement strategy in many organisations.
How to maximize own time
The following steps can assist in focussing on the value-added and thus getting the most out of your time:
- Review your work and identify which tasks are value added and which are non-value added;
- Work out which (if any) non-value added activities can be simply removed;
- Identify non-value added activities that can be done by someone else, better or cheaper than completed internally;
- Create an action plan with responsibilities and specific dates to remove/restructure/outsource relevant non-value added work.