The subject of this post is one that Lynette and I have discussed with many of our members on a personal level.
So, let’s talk about Time and Money and Free. We treat time and money delicately when in reality, they should be two of the clearest aspects of our business.
In fact, when it comes to charging for or placing value on time, we do our research, we nitpick…and especially when it comes to putting a dollar amount on it, we are well…frugal (to use a nice word :).
And then there’s FREE. Have you ever really thought about the value of FREE? I could go on about this topic, but will let you continue reading this post which, in the end…makes my point.We’ve discussed the importance of investing (not spending) in ourselves as we are the greatest asset in our businesses.
Free Isn’t Free
What is you ROTI (Return On Time Invested? I’m not talking about the time your clients pay you for. I’m talking about the time you spend doing administrative tasks, creating a DIY website, or customizing a free service for your needs.
Your time is yours, correct? Yes and no.
Yes, you own your time and no, you don’t need to pay someone else for it. But your time is an asset and it has value, so how you spend it determines if your return is more or less than its value. Make sense?
In fact, time is your most precious and irreplaceable asset.
How you spend your time will directly impact your bottom line. Unlike other assets, you can’t save it up for a rainy day. You can’t buy more time. You get 24 hours in a day like every other business owner out there and when it’s gone, it’s gone.
“I just want to make a living. I’m not interested in dissecting the meaning of life,” you may say.
What DIY Really Costs You
You decide that you are going to build your own website from scratch.
You will have complete control over the structure, the layout, behind the scenes SEO, and more. There’s no waiting for an outside firm to update your site. There’s no risk of looking like 50 other sites because you used a template.
Sounds great, right?
Not so fast.
- What FTP will you use? Do you even know what an FTP is?
- Do you know any HTML? Do you even need to know?
- Have you ever created your own CSS file?
You’re smart. I’m sure you are able to learn all of these things. The real question is how long will it take? Let’s assume it would take you 120 hours, or one month, to learn these things and build your own site.
When you perform work for clients, you are earning $50 net profit for every hour billed. If you were to pay yourself a fair market value, the cost would be $6,000 ($50 X 120 hours).
Before embarking on this DIY adventure, you request proposals from a couple of reputable web developers. You learn that it would cost roughly $3,000 for someone else to create the website of your dreams.
The reality is, you don’t actually have to pay yourself. So, why spend the cash on someone else?
First, and most importantly, if you do it yourself, you will miss out on the chance to earn $6,000 if you had been performing work for a paying client.
After paying someone else $3,000, you would still be ahead by $3,000 ($6,000-$3,000 = $3,000)
Not convinced yet?
More reasons why you should consider outsourcing:
- Total project time: An expert is going to be able to complete a project faster than a beginner. If you need to hit a deadline or simply need it done fast, outsourcing helps.
- Expertise: While your result may be “good enough”, an expert will bring all of their tools, tricks and insights to the table.
- Better than cloning: You can’t be doing two things at once. By outsourcing, you can ensure that two things are getting done at the same time in a professional manner. This can accelerate how quickly you will hit revenue and profit goals.
This my friends is the reality of doing business.
There are certain circumstances in which you may still wish to build it yourself. You may just be starting out and simply don’t have the capital available. You may not be established enough to use that time serving profitable customers. Each business is unique.
All of this is ok, just recognize that you are in essence paying yourself less than market value, and your path to profitability will be longer.
Remember, your time has value.
Take a minute to calculate how much your free resources and services are costing you. If your time was an asset you could record in your financial statements, would you be ok with showing others how it is being spent?
Do you still think free is free?