Exploding the “time equals money” myth for business owners
Most discussions about the relationship between time and money start with Ben Franklin’s simple take that “time is money.”
Much of the pace and stress of the workplace, which eventually carries over to the rest of life, is caused by this very myth. This, combined with higher productivity afforded by high-speed communication, creates an overwhelming urgency to make every moment count.
This affects all aspects of our lives. It permeates our thoughts, daily routines, our meals, our vacations, our family time and even our relationships with our children. It becomes the air we breathe with no respite. It puts walls around our mental space and affects our ability to take pleasure in experiences.
To my mind, it’s a pernicious myth. Worse than that, it is a myth that has very much taken hold among business owners in western society, and all over the world. It suggests that only a Stakhanovite attitude to your working life is acceptable, and that business owners should continually be the servant of their business, rather than its proprietor.
I prefer to see it from a different perspective following my conversations with business owners.
Here are some key points to help you free yourself from the “time is money” treadmill and set yourself on the path to a genuinely happy and contented lifestyle.
1. Understanding the key difference between time and money
The first step is to understand the key difference between time and money. In very simple terms, your time is a finite commodity – there are only a certain number of hours in the day, days in the week and so on. Once time has been spent, it’s gone – you can’t get it back.
Against that, the amount of money you can earn is unlimited.
Because of this key difference, time for business owners is a scare commodity. Once it’s gone, there is nothing that you can do to earn more of it. It’s illogical to sacrifice it for what really matters in our lives – yet I see the damage on a regular basis as it’s easy to be constantly consumed by our businesses.
Most business owners set up their own entity to give them control and freedom of time, money and relationships and less stress. In reality, the complete opposite happens.
2. More work isn’t necessarily more productive work
Sometimes spending too long working can become self-defeating. Despite your physical effort, you can end up tired and unproductive, meaning the work you complete isn’t up to your usual high standard.
Consider it like golf. The immense effort you can put into a long drive could just as easily result in the ball ending in the bracken beyond the rough as on the fairway. Sometimes the smarter golf shot is the one that doesn’t involve brute strength. This is why I have had a golf coach for the past five years since I started – to make sure I don’t waste too much time and frustration and can get to a reasonable standard fairly quickly so I can enjoy it too.
It’s even more fun now that my seven-year-old son wants to come along!
That’s not to say that hard work and long hours aren’t necessary when you’re building your business. It’s just that sometimes you should look at investing in your work in the same way you invest your money.
Ultimately, you’ll reap the reward from smart work in the same way you will from long-term investment.
3. The relationship between time and money as a business owner
In some instances, many individuals also equate time to money in the workplace. They will calculate a fixed rate and, therefore, a fixed number of hours necessary to accomplish a particular objective.
While it is a proven way to ensure that needs are met, it fails to consider the time factor once again. Income can vary by job, but the time spent earning is indispensable. You can always make up for lost revenue in subsequent jobs, but you can’t buy back time.
Many business owners will use a similar equation. They will assess an amount that reflects their business costs for a particular project, either on an hourly basis or as a flat rate, rather than seeing each client as an individual entity and maximising effort and value for each.
An extreme example of this is “lawyer’s time” and the notorious “billable hour”, where lawyers sometimes carve up their billable time to increments as small as 0.1 hours. That’s just six minutes!
4. Invest your time the way you invest your money
In the same way that salmon swimming upstream eventually reach calmer water, the early, time-consuming effort you put into your business can ultimately result in long-term success.
Likewise, the time you spend with individual clients.
The initial hard effort should result in you creating a productive and mutually beneficial long-term relationship. Remember, 89% of consumers are more likely to deal with a company again after an initial positive experience, so the investment of time at the outset of a client relationship is usually well-spent and a financial boost to your business.
5. The importance of working smarter
It is important to understand that no matter how hard you work towards accomplishing objectives, time cannot be purchased.
Therefore, you should focus on making the most of each day and living a richer life because once the time passes, you can never retrieve it.
Although you can’t change the number of hours you have, you can increase how much you earn in that time.
By working smarter, and recruiting the right people, you can free up time to reap the rewards of all your hard work and investment in the early years.
6. Crucially, work out what is “enough”
The other key point is knowing how much money you need to live the life you want.
Business owners will often ask me when they will be able to afford to have the choice to go to work because they want to and not because they have to. Knowing this financial magic number is extremely liberating and empowering as you have a very clear idea how near or far you are from it, and what options you have. We all have choices. Often, my clients realise they can live the life they want far sooner than they’ve been led to believe.
By investing their time heavily in the early years after setting up and then establishing their business, they find that they have more of it later in life and can stop work to enjoy it sooner than they’d thought. It’s just that they make far too many fearful assumptions in their heads. That’s very natural and common but doesn’t really help you.
As with golf, you can’t see your own game. For example, my arms would come in when swinging and a coach helped me correct that fault. It’s the same with our thinking. We have too many assumptions running through our heads and the unconscious ones are harder to spot.
It therefore helps to work with an experienced financial planner with good coaching skills, who has gone through the same process that they share with their clients.
The initial investment means you can spend more time doing the things you want to do – time with your family, following hobbies, and enjoying nice holidays.
If one legacy of the pandemic is that wealth can be measured in terms of personal happiness and fulfilment rather than the size of your bank account, then that can only be a good thing.
Get in touch
Using the right cashflow forecasting modelling tool is one of the ways I can help you understand when you’ll have enough so you can choose if you want to keep working. And if you don’t have enough, I can help you understand what your options are, so you do not need to worry about ever running out of money.
If you think I can help you, please get in touch. Complete the contact form or call me on 020 3813 8265.