Cost Of Your Time: Loss You Incur By Not Delegating
Business owners often try to do most tasks themselves and subdue the progress of their business. Now, the cost of time we waste doing most of the tasks ourselves instead of delegating them.
We will start with the question
Why do most business owners refuse to delegate?
There are a few prominent reasons that prevent business owners from delegating. They feel they cannot risk the output quality or the deadlines. Also, the fear that employees will leave and start their businesses once they learn the secrets. They think delegating it to others will slog the process and consume more time.
So, they choose not to delegate and do most tasks themselves. This work includes closing all the sales, having discussions, attending to new enquiries etc. They also supervise all the other functions like execution, purchase, production, quality, design, service, finance, etc.
However, this leads to inefficiency and prevents the owners from unleashing the full potential of their business.
I have two exercises for you to show the loss you are incurring by doing things yourself and not delegating.
So, I want you to pick a pen and paper and write down everything while you go through the following steps.
For the first exercise
- Write the current annual revenue of your business.
- Now divide this figure by 12 ( monthly average)
- Divide this monthly figure by four ( weekly average)
- Divide this weekly figure by the number of hours you work for your business.
- Lastly, multiply this figure by the profit margin of your business.
Let us take an example.
If your annual revenue is twelve crores, then
The monthly average is one crore rupees,
The weekly average is twenty-five lakhs rupees.
And considering you work 50 hours a week, your hourly revenue will be 50 thousand.
Lastly, multiply 50 thousand with 20% (profit margin). That gives us the value of our 1 hour, which is 10 thousand.
So, it would be wise to hire someone and delegate the tasks to someone whose hourly cost is lesser than yours.
When you recruit a sales manager, you don’t want him to waste his time in trivial activities like sitting in the office, getting documents photo-copied, or organizing files in a cabinet, right? You want him to go out in the field and be with customers. You understand the cost of his time because you are paying him a salary.
However, most business owners don’t calculate the cost of their time. They treat themselves as a free resource and even do the most trivial jobs.
As the owner, you need to work on growth strategies. If not you, I am afraid no one else in the organization will be available for that responsibility. Eventually slowing or even stagnating the progress of the company.
For the second exercise
List all the tasks you did yesterday ( a typical working day).
Now, divide them into three categories based on who was the ideal fit to do the particular task. Was it supposed to be an individual, a manager or an owner?
After that, refer to the following points table, and allocate the points to every task.
- If any individual can do that task, give 100 points
- If it was a manager-level task, give 500 points
- For the leadership level tasks, give 2500 points.
Now, If this was your typical day and your score is less than 5000, it’s time to change.
In most engineering businesses, the owners are deeply involved in technical aspects like design, proposals, costing, production, quality, service etc. However, they miss out on other crucial aspects of business like new customer acquisition, relationship building, exploring new opportunities, marketing etc.
I hope you recalibrate and start working on effectively managing your time.
If you want to know more about how you can get the best out of your business, drop a Grow at [email protected], and I will revert.