Remember that Time is Money. ~Ben Franklin
Ben Franklin may have said it first, but many people have said it too.
How you spend your time is just as important as how you spend your money. In this section, we’ll look at some principles to help you spend your valuable time more thoughtfully, to grow your Frugal Business.
As the saying goes, “work smarter, not harder.”
What does “work smarter” really mean? Working smart is about using your valuable time in ways that can get you to business success more quickly. Time and money are always a trade-off. Both are in short supply, and must be used wisely. You spend money instead of spending time, and you spend time so you don’t have to spend money.
Considering Both Time and Money
Growing a Frugal Business means considering both time and money in everything you do.
The Important-Unique Grid
The following grid should change the way you view your time in your business. Think of this grid as you go through your daily activities.
Look at it this way, as a grid. I call it the I-U Grid. The two axes on the grid are:
Important and urgent. Tasks vital to the success of your business and which need to be done quickly and correctly. You could argue that every task is vital to your business, but some are more so than others. It’s vital that you have the cash flow to keep going and that you have customers who pay the bills, but it’s not vital that someone plan all the details for the grand opening or the details for the web site.
Unique to you. You’re going to have to make some tough decisions about the tasks that only you can take care of and the tasks that don’t need your personal touch. Doing the work for clients, making sure you get that bank loan, or signing checks are unique jobs that only you can do.
The Important tasks that are Unique to you are the ones you should be focusing on more and more as you work smarter. Here’s a grid I put together to explain what I mean:
By viewing the grid on two axes — Important vertically and Unique to you horizontally — you can fit individual tasks in their appropriate quadrants.
If you think this looks like something Steven Covey might have created, you’re right. I took the idea for this concept from his book First Things First. But even further back, it’s a concept in psychology called a Johari window.
Look at the grid quadrants
Quadrant C is the bottom level of business tasks – taking out the garbage, cleaning the bathrooms, making sure there is coffee for employees. These are neither vitally important (except for cleanliness and the coffee drinkers), and none of these tasks must be done by you.
Quadrant A is tasks are high in importance but they are tasks that don’t have to be done by you. This is what I would call the “specialist” quadrant. Quadrant A tasks should be turned over to high-performing specialists. Let’s take marketing, for example. We can’t all be marketing experts. So why not hire someone to do web marketing as quickly as you can to someone who can make sure the web marketing gets done right.
Quadrant D looks different. This is the area where tasks are unique to you but they aren’t terribly important. You still need to do these tasks, but they may not have to be handled immediately.
Quadrant B is your goal. You should be spending most of your time doing tasks that are both important and that only you can do. This is the negotiation for the bank loan, the personal relationship with a top client or customer, and the focus on the overall direction and strategy for your business.
Working smarter is about finding someone who can do some of the tasks you need to get done. I’m talking about tasks that are needed to move your business forward but that either require specific expertise or that extend your ability to work smarter.
What is Your Time Worth?
For business owners who are working from home, their time is worth what they can get for the work they do. Let’s look at that concept for a minute, because it applies to all business owners, even people who don’t do freelancing.
You need to arrive at a figure of what your time is actually worth. This is hard in the beginning, especially if your business isn’t making a lot of money.
James Clear has an excellent article on properly valuing your time.
Once you’ve placed a value on your time, there are some other things you need to consider.
Is it really worth it to have the satisfaction of doing something new, when you have so much to do?
Every new thing you learn to do has a learning curve. If this is a new task, is it really essential that you spend the time figuring out how to do this?
Should you hire someone to do it? That way you don’t have to spend the time mastering the learning curve and you might get a better result.
Is this work essential to my business?
Every business has to do some bookkeeping and financial record keeping. It’s just part of running a business. The question is, do you need to do it yourself? How thoroughly do you need to learn which account goes where in your balance sheet?
I was taught a long time ago to consider the value of your own time against jobs that need to be done. Is the pay for this work greater than or less than the value of your time? If it’s greater, do it yourself. If it’s less, hire it out. Here are a couple of examples:
An attorney bills $200 an hour for her services. She would pay about $50 an hour to have her house cleaned professionally. She’s much better off paying to have it done and spending her time on billable services.
On the other hand, a bookkeeper makes about $45 an hour. Should she pay to have her house cleaned at $50 an hour? It’s close, but I’d say if she can — and WILL — work at getting new bookkeeping jobs during that hour, she should pay someone else to clean her house.
What is the time of a business owner worth?
It’s more difficult to determine your time as a business owner, so let’s look at your priorities. Business owner priorities should be:
Client service. Which clients are most important? What client interactions are most important? As you begin your business, you will want to spend all of your time doing whatever clients or customers want – what you are being paid for. But as time goes on, you’ll realize that you can’t – and shouldn’t – interact with clients about everything.
Making the high-level decisions. Your time should be spent with the big picture. For example, deciding if you should have a website, the overall look and purpose it should have, and how it fits into your business budget is a high-level decision. Creating the site and deciding on details should be left to a web professional or someone who can do it quickly and easily. You always have oversight, of course.
Hiring excellent professionals to do those jobs that have a steep learning curve and require experience is usually a good investment. If you can find people to do those less skilled, but just as important jobs for your business, you will save your valuable time and be further ahead.
Working Smart is figuring out what only you can do.
Then find talented professionals to do the rest.
How to get started saving time:
When you have a few minutes:
- Look at your calendar and your to-do lists.
- Mentally assign each item to one of the quadrants.
- Consider which of these activities in the C and D quadrants can be eliminated or postponed.
- Which activities are in the A quadrant and how can you hand them off to someone?
- Do this every day for a while, until you can quickly evaluate time demands by using the quadrants.
Appreciate the Value of Your Time so you can work smarter on your Frugal Business.
Here’s to the Success of Your Frugal Business!