What Is Your Time Really Worth?
Many time management seminars begin the skills development process by asking you to calculate how much your time is worth an hour. The assumption is that you have 220, eight-hour workdays in a year. Based on how much you want to earn a year, you can calculate your hourly "worth." An income of $100,000 a year is $56 an hour.
The information this exercise provides is interesting, but misleading and undervalued because the model is based on eight productive and billable hours a day. It's an Industrial Age model applied to an Information Age reality. Unless you're working an assembly line, it's unlikely that you really have eight productive and billable hours a day. If you think you do, you're probably lying to yourself. In an office job, you may be in the office for eight hours, but you're probably only truly productive for one quarter of that time.
Productive time is an important concept here. If you want to achieve something, you have to think it terms of your productivity. That's the time spent towards the achievement of a result.
If you're trying to develop a business, give seminars, workshops, market products, write a book or whatever, how many hours are you truly productive when it comes to working on that?
A very liberal estimate grants you about two productive hours a day. This changes the math substantially.
If your annual target is $100,000 and you have 220, two-hour days to apply productive time towards that target, your time is now worth about $227 an hour.
Here's the math for this example. ($100,000 / 440 = $227 ish)
When you know your time is worth $227 an hour instead of $56 an hour, does that change how you value your time?
It might not always be easy to tell a client your time bills out to $227 an hour, when trading your time for money. You do need to make considerations for what the market will bear. Think about ways to create additional value so you're not simply being compared to the next person in the phone book. However, knowing what your hour should be worth should give you the incentive to not undercut your own worth when setting your billable rates.
With a $100,000 annual target, an hour-long workshop that brings in a gross of $300 puts you on target for your annual goal and leave you a lot of time for other projects. What if you add more attendees or provide opportunities for additional business at the event? What could you do to add value and increase that hour to $1,000?
* How about a special report on sale for your clients? A 30 page report, at $10 each can sell like hotcakes. In fact, some people spend more on real hotcakes!
* Offer a membership-based web site and provides value to your clients and regular, residual income for you.
* Sell a DVD of a previously recorded workshop or talk-it doesn't even have to be yours.
* Is there a product you can resell to your clients which gives them extra value from the services or product that you currently provide? There's a reason coffee shops sell pastries too.
If you work an office or production job and don't have any other type of business, knowing how much your time is worth is still a valuable number. As long as your efforts make the company more than you cost, you are a productive value to your company. Learn to think of yourself in those terms and your management will notice the change too.
You might not want to tell your boss you only have two productive hours a day, but understand that he or she is lucky to have the same. Management is often less productive than those they manage.
Understanding how much your productive time is worth is a very important tool in your bag of time management skills. Who you are, what you know and how you can help others is valuable. Knowing how much your time is worth helps you focus on your value. Your time management skills will come more naturally as a result.
The information this exercise provides is interesting, but misleading and undervalued because the model is based on eight productive and billable hours a day. It's an Industrial Age model applied to an Information Age reality. Unless you're working an assembly line, it's unlikely that you really have eight productive and billable hours a day. If you think you do, you're probably lying to yourself. In an office job, you may be in the office for eight hours, but you're probably only truly productive for one quarter of that time.
Productive time is an important concept here. If you want to achieve something, you have to think it terms of your productivity. That's the time spent towards the achievement of a result.
If you're trying to develop a business, give seminars, workshops, market products, write a book or whatever, how many hours are you truly productive when it comes to working on that?
A very liberal estimate grants you about two productive hours a day. This changes the math substantially.
If your annual target is $100,000 and you have 220, two-hour days to apply productive time towards that target, your time is now worth about $227 an hour.
Here's the math for this example. ($100,000 / 440 = $227 ish)
When you know your time is worth $227 an hour instead of $56 an hour, does that change how you value your time?
It might not always be easy to tell a client your time bills out to $227 an hour, when trading your time for money. You do need to make considerations for what the market will bear. Think about ways to create additional value so you're not simply being compared to the next person in the phone book. However, knowing what your hour should be worth should give you the incentive to not undercut your own worth when setting your billable rates.
With a $100,000 annual target, an hour-long workshop that brings in a gross of $300 puts you on target for your annual goal and leave you a lot of time for other projects. What if you add more attendees or provide opportunities for additional business at the event? What could you do to add value and increase that hour to $1,000?
* How about a special report on sale for your clients? A 30 page report, at $10 each can sell like hotcakes. In fact, some people spend more on real hotcakes!
* Offer a membership-based web site and provides value to your clients and regular, residual income for you.
* Sell a DVD of a previously recorded workshop or talk-it doesn't even have to be yours.
* Is there a product you can resell to your clients which gives them extra value from the services or product that you currently provide? There's a reason coffee shops sell pastries too.
If you work an office or production job and don't have any other type of business, knowing how much your time is worth is still a valuable number. As long as your efforts make the company more than you cost, you are a productive value to your company. Learn to think of yourself in those terms and your management will notice the change too.
You might not want to tell your boss you only have two productive hours a day, but understand that he or she is lucky to have the same. Management is often less productive than those they manage.
Understanding how much your productive time is worth is a very important tool in your bag of time management skills. Who you are, what you know and how you can help others is valuable. Knowing how much your time is worth helps you focus on your value. Your time management skills will come more naturally as a result.