Becoming an Online Entrepreneur: What's Your Time Worth?
out how valuable your time is is important when becoming an online
entrepreneur. In fact, figuring out what your time is worth will help you
understand how important your time is. So here’s how to figure out how much
your time is worth.
How Many Hours Do You Work?
When I was in the Air Force, we had contractors who worked for us. Every year we had to figure out how much money we needed to pay for their time. We did this by figuring out how many hours we expected them to work. Typically a full time contractor worked 1880 hours in a year, given holidays and vacation time.
So your first step is to figure out how many hours you work in a year.
How Many Hours Do You REALLY Work?
Usually when you’re working, time is spent in meetings, talking to people, answering phone calls, and other things that keep you from being productive. Productive time is time spent on things that pay, those activities that are considered revenue producing.
Typically only 1/3 of your time is actually productive. So your next step is to figure out how many productive hours you work.
Divide the total hours your work per year by 3. This result is the actual number of productive hours you work in a year.
How Much Do You Want To Make This Year?
The total cost for the contractors who worked for us would be the number of hours for the year times the price for that contractor, which is based on the contractor’s specialty. On average a contractor would cost about $180K per year.
Decide how much money you would like to make this year. Don’t be afraid of the number. Really consider how much you want in your bank account.
What Is Your Time Worth?
To figure out what your time is worth, divide the amount you want to make this year by the number of productive work hours.
For example, using the cost and hours of a contractor, let’s say I wanted to make $180,000 this year. Using 1880 as the number of hours I work each year, I only have 627 productive hours. So my time is worth $287 per hour.
Now imagine if I could increase the number of my productive hours at the same rate of $287 per hour …
So how much is YOUR TIME worth?
Happy Business Building,