Let me give you an example of how I lost a potential $4,900 a day when I first started out in the training business by spending too much of my time on the wrong sort of work. Like every small start-up business person, I was a one-man show. Naturally, I had to do everything myself.
I had to write proposals to clients, make cold calls, do sales presentations, conduct the training itself, prepare logistics, prepare training materials, do administration and finally, manage the financial accounts.
Now among all my activities, which one do you think created the most profits? The answer is when I was training. Every day I trained, I earned for my business $5,000 (100 students multiplied by $50 per student).
However, because I had to do all the other activities, I only had the time and energy to do a maximum of six training days a month, thus the most I could gross was $30,000 a month.
I thought of hiring people to do the administration, logistics and accounting but I was initially too stingy. I thought to myself, ‘If I hire an administrative assistant, I would have to pay the person $2,000 a month’. ‘If I do it myself, then I would save the money!’
What I did not realize then was that by doing the admin, accounts, logistics and selling myself, I was actually losing money everyday! Why?
You see, every day was worth a potential $5,000 if I spent it doing training.
If I were to hire an administration assistant, I would have to pay the person $2,000 a month, which works out to $100 a day (assuming 20 working days a month).
If I did the administration work myself, I would save $100 a day. However, I would be losing a potential $5,000 as I would not be able to be out training. So although I save a potential $100, I lose a potential $5,000, I end up losing $4,900!
The moment I realized this, I went out and hired an assistant to take care of all my admin work like filing, answering calls, arranging logistics, coordinating with clients and so on.
This freed me of a collective five days a month which I could now spend doing training and earning my business an additional $25,000 a month. Not bad, I invested $2,000 to earn back $25,000!
The lesson is this. You must find the activities where you generate the highest value for your company and spend most of your time doing that! If you can, delegate the rest. Remember time is money and how you spend will decide how mush value and wealth you can create.
Adam Khoo is an entrepreneur, best-selling author and a self-made millionaire by the age of 26. Discover his million dollar secrets and claim your FREE audio CD program ‘7 Steps To Financial Freedom’ here.