You know how people love to repeat the old cliché, “Time is money”?
Well, it’s a cliché because it’s true. And if you are someone who’s willing to do what needs to be done to improve the way your business functions (and I think you are), here’s a little exercise for you…
First, take the total wage bill for your team, and divide it by the total number of hours actually worked (so excluding breaks and vacations) and you’ll get a mean hourly rate for your staff. (If you really want to scare yourself, factor in the hourly rates for any chargeable resources you have, such as consultants or contractors!)
Next, for one week, make a habit of looking out for any occasion where you spot someone doing something that maybe doesn’t have to be done. Make a note of the unnecessary task. Make a note of how many minutes that task took, and how many people were involved. Then multiply the total time by your mean hourly rate and you’ll get a dollar amount. This represents how much your business has paid for that unnecessary task to be done.
You’ll probably end up with things like:
“Contractor on-site phones in for alarm code”
(30 minutes, 2 people, $22)
“Admin searching for missing email”
(10 minutes, $10)
“Going through client list to identify services due”
(90 minutes, 3 people, $175)
At the end of the week, total up the cost to you of all those unnecessary tasks.
When you write down the real costs to your business as a BILL, you start to realize how much money we can waste through inefficiency! And remember those were just the ones you noticed!
My tip: before you ask how you can reach more prospects, get more sales, or increase your delivery throughput, consider how you can reduce your hidden costs instead.
RedHorse can help you reduce inefficiency by organizing your shared information and automating routine tasks.
We can help you. Schedule an appointment.