This 1 of a 5 part series on “The Five Traps Successful Business Owners Avoid”
#1: Time Trap
Time Trap: Successful entrepreneurs understand the mathematical fact that all people, rich or poor, old or young have exactly the same 24 hours in a day as everyone else. It’s how they protect and invest that time that’s the golden factor. Look into Parkinson’s law to learn more on the 80/20 principle. In the simplest form, 80% of your time only produces 20% of the total value of the day. The 20% productive time spent produces 80% of the total value of the day. In other words, the majority of the activities you do in the “job” part of your business, often given too much priority, aren't the lifesaving critical stuff.
It’s understandable if in the early years an entrepreneur is working overtime to get the business off the ground. But the difference between a job and a business is a business has systems and operations that are independent of the owner. In other words, if you can’t sell your business, retire, and the business still thrives without you…I’m sorry to break the news that you don’t really have a business.
Successful entrepreneurs take time off. Lots of time off and for a variety of reasons. For some, it's spending time making memories with their children before they go off to college. Others need off time to recharge creatively. Personally, my business rapidly improves after an extended vacation. I bring back lots of new creative solutions that otherwise would never have been thought of during the normal work weeks.
Hearing your business story is important to me. If it’s a challenge we have a solution for, that’s win-win. If it’s a unique challenge we or any of our entrepreneurial clients haven’t faced before…well, then we get to rise to the challenge and create a solution. Building a business is an adventure that is shared and understood by your fellow entrepreneurs.
How to avoid the Time Trap:
Start with some simple math. Add up how many work hours you want to spend in the daily grind. Then decide what income you’d like to have at the end of the year. Divide the annual number of hours into annual income. That is now what an hour of your time is worth.
Example: 8 hour work days x 5 days = 40 hour week. Two week’s vacation means 50 weeks worked a year. 2000 hours in the grind. To keep the math simple, let’s pick $200,000 annual income goal. That’s $100 an hour.
Implement the 80/20 rule. 2000 hours x 80% = 1600 hours. $200,000 annual income goal now makes an hour of your time worth $125.
Protect your $125 an hour time by not doing anything that isn’t worth $125. Learn to use one of the most powerful words in the English language. No. Say NO to the things that are busy work. Then outsource, delegate, or decide a task or service is not valuable.
Action step: 20% of a five-day work week is a day. Block that day completely off your calendar from appointments, phone calls, and day to day tasks. Give that day a name. I’ve heard of sharpening the sword, dividend day, and team meetings day. This 20% day will accomplish 80% of the value you bring to your company as its leader.
Outcomes: work on your business finances, your personal finances, goal checking and prioritization of next week’s tasks.
As the Entrepreneur’s advisor, I look forward to the consulting meetings with business owners on their 20% days. It’s truly exciting to participate in the formation of their dreams and visions as we work on their business exit plan and future retirement.
Next in series is #2 Talent Trap