Relative Value of Your Time, Internal Cost of Labor and Sunk Time Cost
Robert Braathe
I can find you the job you desire and deserve. Resume writer who fixes careers. Apple, Disney, Gap and UMass alum. Online marketing and management professor. President of the AMA NY Capital Region (Volunteer).
Do you work endless hours of overtime in hopes that it will give you an edge in your bank account?
Recently, I shared with one of my students the true cost of all the overtime he was putting in at work and the opportunity cost of doing so. He was working over 20 hours a week of over time, and after taxes on average was bringing home $15 an hour. By cutting down to 10 hours of overtime a week, he actually was earning more per hour after taxes by picking up projects on the side for those extra 10 hours a week.
Do you spend hours upon hours doing work for your business and don't see a return on that investment?
For example, I once spoke to a person who told me they spent 5 hours a day working on their website. I asked them how much they billed themselves per hour for their work, and they said $200 an hour. When I made them realize that they were spending $1000 of their own time building their website, they quickly hired a web developer. They had spent nearly 40 hours on this themselves which was $8000 in lost time!
I've been guilty of this too. We all often don't value our time as much as we should because we don't calculate the relative cost of our own time, or our internal cost of labor.
I challenge you to put into excel how many hours you've worked on something you aren't getting paid for, and whether you have seen a return on that time investment; these could be things like blogging, training others, HR tasks, marketing, or going to meetings or making travels that don't make sense.
It may be the wake up call you have been waiting for to see that you've spend $10,000 or more of time on things that someone else can do better, or on a business idea that sucks and has not enough customers.
Also, have you invested a great deal of time already in a project but have yet to analyze the worth of this time, or the sunk cost? It may be time to review the amount of time you are personally spending that you could be delegating or outsourcing to others.
When you are done with this exercise (take about 30 minutes to do this), let's talk!
Schedule a 15-30 minute call with Robert at https://meetme.so/RobertBraathe
Find out more about our work at https://www.braatheenterprises.com