Time is money
If you are ever on a call with me, you will hear my growing anxiety if you get verbose, using many colorful words to explain things in painful detail that I already understand.
That’s my internal clock voice going “You have spent $50 talking about an analogy.”
For discussion sake, let’s say my retail bill rate is $185/hr (it actually fluctuates, but that’s a longer discussion). So, speaking 15 minutes costs my company about $50 on any given day. I have staff that are cheaper. I am constantly aware that I am a bottleneck for thousands of dollars a day in payroll.
When I waste time, I waste money.
Every 15 minutes I delay explaining today’s tasks to a team member costs me 25% of their hourly rate multiplied by the number of members in my team waiting on my instructions. Likewise, I can roughly calculate the sales revenues I generate in a given month or the amount of money I pay for services, rent, hosting, etc. by the house. I know that number. And, it is burning up every minute I’m not working.
Because the math is easy, I have a running tally in my mind of what I burn per quarter hour. So, a 15 minute coffee costs me $X. When we’re having coffee, I consider that an investment in our relationship because it is in fact money I chose not to put in my pocket.
When you waste time, you waste money.
When you invest time, you invest money.
In order to grow your revenue, you must grow your team, which means you too will be faced with the problem: time is money, and more potential money means wasting any time costs much more money!
I have decades of self employment experience
If you’re new to self employment or the gig economy, I’m decades of experience ahead of you on launching a new career in self employment or new business ownership. You could experiment with simply taking my advice, or talk to other successful self employed people to validate it. I encourage a combination of both.
In the early days, I made all the mistakes!
Sometimes, it’s easier to just take advice from someone that’s already been there. Test their assumptions in the real world and figure out if their advice works.
Bruce Lee’s philosophy on learning is best applied here. Use what works. Discard what doesn’t.
It doesn’t matter if it fails because your personality is the problem. It doesn’t matter if it fails because you’re lazy or didn’t apply it properly. If it doesn’t work, move on. It’s far easier to find a path that works for you, the way you are, than it is to change who you are.
We can work on upgrading your mind and spirit later. Right now, we’re talking about getting paid. Money isn’t complicated. More is better. Less is almost always worse. Spending more than you earn is bad. Earning more than you spend is good.
Cash is oxygen. You can’t run a business or a life without it.
Prepare to work long hard hours at first
The new business or career crank up is a lot like getting a massive diesel engine running. It requires a warm up phase and an extraordinary amount of energy. If you try to crank a cold diesel engine, it will take exponentially more energy than a warm engine. That’s why old diesel engines had glow plugs. Glow plugs were heaters in the engine that warmed up the combustion part of the engine so that diesel could more quickly ignite.
Just like a big powerful diesel engine, once your business gets going it can provide a lifestyle you’ll never obtain through employment. Those of us that figure this out will never go back to the so called 9 to 5 (by the way, outside of a hand full of government jobs I don’t even know if an eight hour work day exists).
The harder and faster you push the initiation of your business, the faster you can coast into a sustainable quality of life. Expect the unexpected. Problems and learning curves are part of the process. Whether you’re filling the pipeline with prospects or creating policy and processes for your new team, the work you do now will pay dividends for decades to come.
Plan to invest an inhuman amount of time and attention learning your professional and building your business. Even as a contractor, your tools and skills are part of your business. We’ll talk about prioritization later. Right now, you need to adopt the mindset that you are going to what it takes to get things moving.
It may seem backward, but you have to create momentum to realize you are moving in the wrong direction. You could rely on theory and academic processes. But, one sure fire way to know your ideas are good or bad is to test them. In other words, get to work!
This is my hard learned, very firm advice to new self employed or business founders
Have a chat with your loved ones, your family, and anyone that depends on you. You are going to be incommunicado for a while. You are going to miss dinners, skip breakfast, and are not going to be socially available for a while. Whether you want to be a wealthy person or not will determine how long you will be unavailable. But, there is no way you are going to launch a new business by putting in the typical effort for the typical time. It’s going to be a rough. Just like a new military recruit goes through boot camp, you are about to embark on some unpleasant challenges.
Embrace the suck!
Get up early, plan to work late, skip any form of entertainment that doesn’t elevate your mood quickly, and avoid commitments for a few months.
Create a working environment that works
Nobody is going to understand or respect your schedule, need to focus, or consider the consequences of interrupting your work. Your spouse will not associate interrupting you to help with chores or the children with the missed vacation you can’t afford because you missed a deadline.
Just like friends who tell you that you can eat cheeseburgers and still be thin, if only you were more disciplined, they will expect you to do the things that matter to them and earn the money.
Reality doesn’t work that way.
You have to set priorities. Broccoli may irritate your significant other when you skip their prized mac n’ cheese that you once drooled over. But, they’ll appreciate that six pack. Make a decision to sacrifice and dedicate yourself to the task at hand. Do that by setting boundaries.
Create a schedule, a place, and rules about your work. Be completely inflexible.
If someone isn’t bleeding or in immediate danger of dying, do not allow interruptions. Sure, it feels impersonal and unfriendly. If you want to enjoy the benefits of a successful business, you have to focus on your business.
Time is money, repeat time is money
The more time you clock in the early days, the higher your lifetime earnings will be. No matter how true this is, no significant person in your life is capable of fully understanding and embracing this reality. Sure, maybe you married or are dating that saint that does. It’s very unlikely.
Schedule the work time you need and then plan on paying the price for it twice.
You will not only have to set hard rules about work time, but you will also need to make up for it by being a super friend, spouse, sibling, lover, parent or whatever relationship you put on hold to get work done. Expect to do it, and do it gladly!
If you sacrifice relationships to build a business, you will eventually regret it. Yes, it works. People who sacrifice personal time to get rich often get rich. But, they also lose valuable relationships.
It’s going to be tough. There are many good books on this subject (foreshadowing self-improvement). Expect to invest time in becoming a better person. Better people make better earners.
Where you work impacts how you work
In the post-COVID world, more people than ever work at home. This is tough in the real world. If your children are young, this is almost impossible while they are home. Children spend more time at home than most new entrepreneurs or gig workers can attend. Plan accordingly.
CoWorking spaces are a cheap way to leave the house and focus on work.
Skip the coffee shop workspace. There are too many distractions, and it can become expensive.
A designated room in your home may work. But, be alert to conflicts. All too often the absent parent or partner choosing to work instead of share their attention and affection is just too much for our loved ones to tolerate.
Just like I encourage you to choose processes and tools that work for you the way you are now, I also want you to work with your loved ones the way they are now. We don’t have time to change people. We need to get to work. So, a few hundred dollars a month to rent an office in town may be a cheap investment to salvage your focus and relationships.
Keep a journal
Write down your plans, expectations, and measure outcome.
If you realize that what you are doing doesn’t work, change it quickly!
Start day one with a timer on everything. This may sound a bit hard nosed, but you can not control what you do not track. Remember, time is money! You are in the time business whether you bill by the hour or job, because it takes time to produce your work product. The better you track and use your time, the faster you can get profitable.
Remember, time is money. And, money is the ultimate goal of your business. Sure, freedom and all that other touchy feely stuff is great. But, if your business doesn’t make money you won’t have one. Let’s solve that cashflow challenge up front.
List your tools
Every new entrepreneur or gig worker has a set of tools necessary to do a job. Write them down, and schedule some time to learn them better. The better you are at using your tools, the faster you can bill for your work.
Use industry standard tools
Make sure your tools are either industry standard or fit your customer’s needs. Often, we learn cool tools that fit our preferences but don’t deliver files or information in a useful manner. If your tools fail to integrate with your workflow, pick better tools.
List your skills
A shocking number of talented people approach me for work without a clear idea of what they have that I want to buy. You’re selling a product. Sure, you have a cool personality and a wonderful family. But, I’m buying your skills. And, I’m probably too busy to decipher how your skills apply to my needs.
Organize your entire collection of experiences and work in one place and create a clear definition of what you did for each project, client, or employer that delivered value.
This is a portfolio of work.
If you’re a typical CV or resume employee, you haven’t likely spent adequate time explaining the value you created in each project or job. Resumes are designed to be thoughtless filter tools for human resources departments.
A traditional resume is garbage
In the gig economy, your CV or resume likely has very little value. It may get you on a call with someone who could hire you. But, the deciding factor for a gig is evidence you can do what they need done. If your portfolio of work showcases work that is similar to the work I need done, that increase the likelihood I’ll interview you for the job.
Decide what you want to focus on
Experts get paid more. It’s good to be a generalist, and perhaps you will become a well paid generalist that helps customers find experts better. Most high wage gig workers are expert in very narrow and well defined fields. It’s important to pick a field that not only produces revenue, but maintains your attention and interest. Being an expert means you are a career learner. Be careful to avoid channeling your efforts into fields that create cash flow but drain your energy. Instead, become expert at something that excites you so you have the energy and enthusiasm to pursue it vigorously.