What is your hourly rate?
I found the news on the BBC this morning that a third of new jobs in Wales are generated by some form of self employment thought provoking.
Kate Jenkins (the woman behind the very lovely Gower Cottage Brownies) described how she has had to become a 'Jack of all Trades' in order to run such a successful business and she's right - just because you can make an excellent chocolate brownie doesn't mean you are an overnight expert in managing your cashflow. The article suggested that business owners need additional support from government to help them learn these new skills.
Entrepreneurs are clearly very motivated, as this statistic shows - in a region where jobs are not easy to come by, people are creating their own. That level of motivation will be essential if they are to learn new skills on top of the pressures of providing the goods or services that their business was established to offer; they will surely have to be willing to put in some serious working hours to achieve all of this.
The Alternative Board research suggests that the average business owner works between 50 and 60 hours per week; however a Reddit survey shows that new business owners work much longer hours than that, mostly down to the additional work involved in trying to build a client base and the steep learning curve associated with the new skills that have to be learnt...cue lots of discussion on how to achieve that elusive (and according to some on linkedin much detested phrase) 'a work/life balance'.
It may be a phrase that we're bored of hearing (and one we're even more fed up trying to chase!) but if your business starts to take up more and more of your waking hours, not only do you potentially put a strain on your relationships and your health, but there must come a point where you have to ask yourself 'What is my hourly rate?'. It may seem obvious when you sit down and work it out -if you're working on average a 60 hour week, with no holiday and only taking £20,000 salary from your business because you're reinvesting everything you earn, then technically you're not even earning the minimum wage. Interestingly, one Reddit user states that he uses this calculation as a tool to ensure quarter on quarter growth for his business, against an 'hourly rate' goal.
If it is a useful method as a perception of growth, it is also an essential way to assess the tasks you take on. If you are aware of your own hourly worth to the business, you can begin to evaluate where your time is best spent. There may be some tasks you have been staunchly unwilling to delegate, thinking that you are saving money by doing everything yourself, but when you consider that there are some tasks that others may be able to do quicker than you (because it is their area of expertise) knowing your hourly rate gives you an opportunity to assess the most economically efficient way of ticking off all the jobs on your ever expanding 'to do list'.
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