Time is money, but how much exactly

  1. A  quick and dirty calculation of an individual’s hourly cost to the employer is to take 75% of the salary in thousands. So if you pay someone £20,000, they will be costing you about £15 per hour. These ignores benefits like employer pension contributions, private medical insurance or company car provision
  2. But if you sell your staff’s time, you should be looking to charge them out at at least 3 times this cost.
  3. As the boss, your time always costs that three times – but not what you pay yourself, but three times what you would expect to earn if you worked for someone else
  4. Have you evaluated the cost of smokers’ cigarette breaks, there usually being no equivalent for non-smokers. Arguably, smokers should be working a 30 minute longer day than the non-smokers, to compensate for this
  5. It is not unusual for salary costs to comprise 80% of costs (excluding the cost of goods bought for resale). So making effective use of people’s time is crucial. Stuff that uses it ineffectively need routing out, whether its unreliable computers, cumbersome systems or having them do stuff a machine could do. Find out what bugs them, what is boring or frustrating and fix it. It may save you adding another salary and make your staff happier and more productive
  6. A harder balance to strike is internet access at work. The internet can be a fantastic business tool. It can also provide the world’s most effective provider of displacement activity – the equivalent of tidying your sock-drawer the day before an important exam. It is hard to ban outright access to YouTube, Facebook etc but your IT system may well be able to report website usage by user. If you feel the need to do this, staff need to know you are monitoring them
  7. It is a fact of life that everything takes longer than we expect; but it’s particularly true of both getting new business ventures up and running and raising finance. So be warned. Push push push to make things happen. Get tasks that fall to you done without delay then chase, chase chase others to perform at their end. These delays are particularly dangerous for start-ups because they can double, treble or more the period before cash starts to flow inwards. This can result in being uncapitalised and financially stretched from the outset.
  8. Focus on the high risk and critical path items. Watching Grand Designs on TV, it always appears to be the glazing that causes stress and delays. What will it be for your project? Zone in on it, communicate and give yourself a contingency period by demanding your ‘glazing’ be ready sometime before you will truly need it
  9. Some things on the internet are ‘free’, the Linux operating system being an example. But they are often only free if you do not cost up your time. Bare this fact in mind before opting for the free-option that may actually prove more expensive in the long run

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