Dan Kennedy’s book on time management begins by talking about how most time management gurus are wrong. And from there he continues with the harsh reality of the grueling battle entrepreneurs must face if they are to make the most of their time.
What the Time Management “Gurus” Teach
Dan explains that most time management experts begin by looking at how much your time is worth per hour. And although there is nothing wrong with beginning by determining how much your time is worth per hour, there is something wrong with assuming that you’re productive a full eight hours a day. Dan points out that it’s completely unrealistic to be productive that many hours on any given day.
Here’s what most time management gurus start with:
“How much do you want to make next year? $200,000? Okay, great!
Now most people work an average of 220 days each year (by the time you subtract weekends, holidays, and vacations), so let’s divide $200,000 by 220. That gives us just over $909.00 each day. Now let’s divide that by eight hours of work each day – and that means we only need to bill/make $113.63 per hour. Seems doable – right?”
Why the Time Management “Gurus” are Wrong
Think for a minute about your average work day. If you’re completely honest with yourself, how many productive hours do you get out of each day? Don’t ignore all the distractions, interruptions, and plain ol’ lack of focus. For me, I’m only left with a small fraction of my eight hours.
Dan says that it’s best to assume that you’re productive 1/3 of the time. That means you can only bill clients for approximately 1/3 of the time you’re working. If we use Dan’s formula, we’ll need to multiply our hourly rate by 3, to account for the 2/3 of the hour for which we can’t bill.
So, our $113.63 now becomes $340.92 per hour. And that figure needs to become your billable hourly rate if you’re going to hit your target income of $200,000. This was an eyeopener for me! I’ll admit, I was guilty of using the “guru” formula – and was wondering why I was never able to hit my income target.
But What If I’m Just Starting Out?
When you’re bootstrapping your business, the first couple of years can be harsh when it comes to your personal income. I remember far too many weeks wondering if we would have enough money to pay our personal bills. It was an extremely stressful time. Like most entrepreneurs, I would pay myself what was left once all my business expenses were paid – and often this wasn’t much. Here’s what Dan says about this approach:
“Since you are your own boss, you write your own paycheck, and you decide how much that paycheck is going to be. For most entrepreneurs, that number is – whatever’s left! This is a huge mistake, for two reasons: it indicates zero planning, and it means you pay yourself last, the number one reason entrepreneurs wind up broke. So, let’s reverse all that, and start with the planning. You’ve got to decide how much money you’re going to take out of your business or businesses this year, in salary, perks, contributions to retirement plans, and so on. What is that number? I’ll tell you, eight out of ten entrepreneurs I ask cannot come up with this number.“
Talk about convicting! For the past 10 years I’ve been diligent about setting income goals each year. But I’ll admit, just coming up with a good sounding number was the extent of setting my income goal each year. I gave no thought or consideration for perks, contributions to retirement plans, etc. This lack of planning has cost me and my family greatly.
“If you don’t know what your time is worth, you can’t expect the world to know it either.” – Dan Kennedy
Notes from No B.S. Time Management for Entrepreneurs
If you’re guilty of wasting time and you’re ready to get paid far more for your time, then you need to grab a copy of Dan’s book. Here are a few excerpts/notes from the book.
Leadership is not about outworking everybody. – pg. 21
You cannot reasonably hope to have others treat your time with respect if you show little or no respect for theirs. – pg. 38I think this is a secret true of a lot of very successful people. I think they are secretly lazy and become exceptionally self-disciplined out of necessity. – pg. 52 In business, there are good strategies poorly executed, poor strategies executed well, but rarely is there a truly new, revolutionary strategy. – pg. 55 … if you are not achieving what you feel you should in life, it is because your goals are not defined well enough. – pg. 61 Ideally, you should schedule your day by the half-hour, from beginning to end. – pg. 66 … if you can’t control your thoughts and manage your mind, you can’t control or manage your time. – pg. 128 This is one reason why a person fails to advance much from one year to the next: he is so busy whining about how unfair everything is and feeling sorry for himself that he has no time left to make anything happen. – pg. 136
If you’re an entrepreneur looking for a great book that won’t take too much time to read, then you should grab a copy of Dan Kennedy’s No BS Time Management for Entrepreneurs. It will challenge your assumptions and give you a solid foundation for making each moment count.