Time is money: you’ve heard it said over and over again in the business world, but does anyone really give significant thought to what it truly means way down in the weeds? What’s the formula for determining how “money” time really is.
Clearly, it’s not algebra I stuff. We all have an idea of what we think we’re worth, but that must be tempered by industry, ability, and actual market value. Whatever science there is involved, it’s a formulation that you have to figure out if you’re going to negotiate with confidence.
In my own profession, I’ve made as little as $15 an hour and as much as $100. The $100 hours don’t happen very often. The $15s? More often than I’d like. But honestly, I can’t use either one if I really want to know what my time is worth.
The approach I’ve used in the past is to think about how much money I want to make each day, how much is feasible given the clients available to me, and what I can realistically expect given the proverbial lay of the land.
Once I determine a more realistic number, I multiply it times seven, and then divide by the amount of hours I prefer to work (42). I don’t use the actual number (between 70 and 80), because I’d like to earn more than minimum wage.
(If most entrepreneurs used actual time they worked as the divider, we’d all be getting skunked by pre-tip waitstaff.)
If a job can exceed $15 per hour for me, I’ll typically take it. If it’s an ongoing thing, I’m pretty confident that number will rise to around $36 per hour as I get a better system in place and learn more about what I’m doing.
I say all that to say this: yes, time is money, but the value is dynamic, especially if you run your own business. After all, sometimes you’ll need to renegotiate rates; sometimes you’ll need to attract new clients; and still other times, you’ll need a benchmark to determine whether a job you’ve been offered is truly worth it.
Before signing off I’d like to leave you with these words of wisdom from Entrepreneur contributor Michael Moroney: “If we all treated our minutes a little more like dollars, there might be less time spent on Facebook and fantasy football and more spent moving our organizations forward.”
Time is money, regardless of what it’s worth. Use yours wisely.