Question: In business, time is money. But I don’t know how much my own time is worth. If I am asked to do a job at an hourly rate, how will I know what would be an appropriate cost?
Answer: One way to do this is to determine your hourly rate. If you do so, then you can estimate how much time is sensible to spend doing a particular task.
For instance, if you work eight hours a day from Monday to Friday, this means you work 40 hours every week, or 160 hours a month. If your annual net income is P750, 000, then your monthly income should be P62, 500. Applying the number of hours of work that you put in the business, your hourly rate should be about P390. If this were the price of your time, would you spend one hour negotiating to get a discount of P100 for office supplies?
The better option might be to delegate this task to a member of your team whose time is priced lower than yours. Let’s say you assign the task of negotiating for office supplies to your staff that has a salary of P12, 000 a month. Assuming there are 22 working days in a month, the daily rate of your staff should be P545, which gives you hourly rate of P68. If your staff is competent enough to negotiate on your behalf and Finish this in half an hour, then you will have a net gain of P66 (P100 minus P34).
Calculating your hourly rate is one way to know how your time is priced and valued. The more you earn the more valuable your time becomes.
You can also price your time in terms of your personal situation. How much is your time worth when you factor in the time you spend doing something that’s not related to work?
There are 24 hours in a day, which translates to 168 hours a week. Assuming you sleep 8 hours a day, or 56 hours a week, you are left with 112 hours of available time.
Using the same income in the previous example, your hourly rate would be roughly P139 (P62,500 divided by 4 weeks=P15,625/112 hours). With this as a guide, you can estimate the costs of your daily activities, which in turn should help you in prioritizing tasks. For example, how any hours every day should you spend checking your e-mail? How long should your meetings take? How much time should? You devote in developing a business? Every hour that you spend is an investment.
Of course, time is not all about business. You must balance your work with leisure; time spent by yourself or with your family is also an investment. If there is a return on investment for time spent in the business, there is also the same return derived from personal leisure.
If you travel abroad with your children for a few days, the expense is the price that you pay for precious memories that you will keep forever. If you exercise at the gym or play tennis, the time you spent in sweating out is the price you pay for your health. There are so many things that you can do with your free time, but it is important to be prudent. There is no time wasted when you use it to achieve your aspirations.