What is Your Time Worth? A Simple Formula

I recently read a book by Dave Lakhani, a business acceleration consultant, titled “Persuasion: The Art of Getting What You Want,” and there was a particular section that resonated with me in Chapter 15, Identify Qualified Prospects.  Here is an excerpt of that section:
One of the oldest tricks in a sales manager’s arsenal is helping salespeople figure out the value of their time.  Most salespeople will never take the time to do it and, if they do, will lack the dedication to apply it on a daily basis.  If you had 30 days to make $10,000 to save the life of someone you love, would you go fishing with your buddies every other day? Of course not, you would be intensely focused on your goal until you get there.

If you have never done this exercise before, I want you to do it right now. Simply write down the amount of money you want to make next year. Divide that by 2080, the number of hours you work in a typical year. That will give you the value of each one of your working hours. Divide that by 10-minute segments and then you will know precisely how much money you are willing to invest in someone before you move on. Let’s say you want to earn $100,000 per year, the bare minimum for a great persuader. The equation looks like this: $100,000 divided by 2,080 = $48.07 per hour divided by 6 (10-minute segments) = $8.01. For every 10-minutes you spend on anything you are investing $8.01. Every activity you do has a price and none is higher than the amount of time you will spend with an unqualified person and here’s why. Because for every hour you spend on unqualified people or time-wasting tasks you have to subtract it from the number of hours you have left to earn your $100,000 or you have to add back extra hours (nights, weekends, holidays, and vacations) in order to make up for the ones you threw away.  When you do the math and are honest about the amount of time you waste you will realize the value of speaking only with qualified prospects.

How many times in your life or your career have you wasted valuable time pursuing prospects that would not help you achieve your financial goals?  Spending time with family should be your number one priority, followed by time with friends, but wasting time networking for the sake of networking with new people is fruitless.  Whether your goal is to land a new client, find a new job, or merely gain access to a new group of potential clients, it will help you to apply this criteria to evaluate how you are using your time.  After all, time is money!