Growing up, I always cut the grass at our house. It was part of my contribution of chores to our family. As I got older, got married, and bought a house, I continued to cut my own grass. This continued even after I left the Navy and started working as a broker. I would spend around 4 hours a week cutting, trimming, and blowing the yard. And because we live with the daily Florida rain, it was virtually impossible to do the job on a weekday afternoon in the summer. That means I cut it on Saturday morning. Ugh. I would rather sleep late. I would rather play with my kids. I would rather go to the beach. I would rather do a lot of things. But I soldiered on – pushing, bagging, sweating. Then, within a few months, something magical happened: I started closing deals. I started building my pipeline. I got busier. AND I started making money. As this happened, I found that my time was far better spent doing things besides cutting the grass. Making more calls, doing more networking and research, and managing my deals became a much higher demand on my time. So, I hired a lawn guy. And I pay him $90/month. If you consider the 4 hours a week I was spending in my yard, I was paying myself $5.63/hr to cut my grass – not even minimum wage.
If you’re a land broker like me, then you work for yourself. Sometimes this is referred to as being “self-employed” but I prefer the other language better. It conveys the idea that you are not just an employee of…yourself…but that you actually WORK for yourself. This concept lends itself better to action, productivity, results and, well, WORK. And whether you recognize it or not, you are paying yourself for every hour you spend working. If you spend 100 total hours on a deal and make $10,000, then you made $100/hr. Is that enough? Well, only you can determine that answer. This is why I posed the question in the title directly to you as an individual: What is your time worth?
This leads me to the central message of this article. If you can grasp and implement this concept, you will be in a prime position to effectively boost your income, spend less time working, or both. The concept is this:
If you can outsource a task at a lower cost than what your time is worth, outsource it.
Too simple? No! That’s the beauty of it! It doesn’t require you to over think. It just requires you to decide if you are paying yourself enough to do the task. There are a few other criteria that you need to meet which are below. But the first and most important question is purely about cost.
Here is how you determine if you should do something yourself or if you should outsource it:
- Determine what you need done.
- Are you the ONLY person who can do this? If yes, do it yourself. If no, continue to 3.)
- Determine how much time you would spend doing the task.
- Determine how much per hour you would have to pay someone to do it for you.
- Compare this cost to what your time is worth.
- If your cost to outsource is the lower of the two: OUTSOURCE!
Here’s my personal example:
- I need phone numbers for property owners.
- I am NOT the only one who can do this task.
- I can get phone numbers for myself at the rate of about 15 numbers per hour.
- I would have to pay someone $10/hour to do this for me.
- $10/hour is lower than what my time is worth.
- I will pay someone to research phone numbers for me.
Result? – Outsourced. You can be sure that my time is worth more than $10/hour.
Now, let me pause for a moment to offer a brief caveat. I FULLY understand that there is not always enough money available to pay people to work for you – especially in the early years of your career. It is also true that you may prefer to do something yourself because you want it done a certain way. Or perhaps you expect to gain valuable knowledge through the process, rather than just receiving the end product. Each of these is a valid point of view and each individual needs to determine what’s most important. Nevertheless, I encourage you to really examine WHY you need to do something yourself in order to justify paying yourself very little to do it.
To read more, go to What is Your Time Worth? (Part 2).
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