You can’t make more time. This makes time the most important resource in business. Yet, too few business professionals appreciate that time is one of their most precious resources. Effective time management is an essential element of business success regardless of who you are or what you do as it is the wise investment of time that allows businesses to grow.
Ricardo’s Law of Competitive Advantage explains how focusing on tasks where we have a natural advantage can lead to greater success – in the same way that a country which excels in growing and selling a local product has an advantage. For business leaders, this means concentrating on what you do best and delegating other tasks. For example, think of a star striker focusing on scoring winning goals rather than trying to play every position on the football field.
Imagine an estate agent, Alex, who excels at building relationships, property viewings and closing deals. Alex’s strength lies in personal engagement with clients, understanding their needs and effectively matching them with the right properties. However, without administrative help, Alex spends a significant portion of the day on necessary backend tasks like scheduling viewings, sales progression, managing social media and updating listings.
Let’s break down the Opportunity Cost in Alex’s scenario:
1. Billable Tasks vs. Non-Billable Tasks:
- Alex charges £250 per hour for services directly related to buying and selling properties.
- Administrative tasks, though essential, do not directly generate income and take up roughly 3 hours of Alex’s day.
2. Opportunity Cost calculation:
- In 3 hours, Alex could potentially earn £750 through client engagements and property negotiations.
- Instead, these hours are spent on administrative tasks that don’t contribute directly to revenue.
3. Delegating to optimise efficiency:
- By hiring a Virtual Assistant (VA) for £12 per hour to handle administrative tasks, Alex can redirect those 3 hours to high-value, client-focused activities.
- The cost of the VA for 3 hours is £36, far less than the £750 potential earning Alex could achieve in the same time.
4. Resulting benefits:
- Alex can focus on areas where they have a competitive advantage – client interactions and sales.
- The VA’s expertise in administrative tasks ensures efficiency and accuracy in those areas.
- Alex’s business grows due to increased client engagement and successful deals.
- The reduction in personal workload can lead to better work-life balance and job satisfaction for Alex.
Here are three practical ways to optimise the use of time in your business:
- Prioritising tasks is the key to success: The Most Important Tasks (MIT) methodology works well when it comes to the effective use of work time. This strategy involves creating a pared down list of just three tasks that it would be highly beneficial to complete that day. These tasks should be chosen for their importance and value. To decide on your three most important tasks, ask yourself goal-orientated questions, such as, “What three tasks will have the biggest impact on a desired outcome?” and “What can I get done today to further my progress towards my short-term goals?”
- Delegate tasks that are not on your top three list: Delegation is not a sign of weakness. It is one of the signs of a strong leader. In addition to being the best use of your team’s time in freeing up your valuable time, it will extend your company’s capacity and efficiency as well as empower your team, build trust and help toward their professional development.
- Delegate tasks you are not good at: Delegating effectively requires a lot of trust, communication and coordination. When delegating tasks it is important to choose the right person for the job. Part of being a good leader is understanding your employees’ strengths and preferences – and how their skills complement your own for the good of the business.
People are a flexible resource in that companies can expand as they need extra hands. This is especially true when taking on experienced and versatile Virtual Assistants. But time is finite. If the clock is ticking down toward a deadline, it is impossible to build in the leeway of more days, hours or minutes. Learning to best use valuable time and harness the core hours in the working day while making the most of Opportunity Cost through delegation is one of the skills that are sure to make good business leaders great and it is key to growing a business.
