We began to answer that question by talking to several small business owners who have already hired their first, and in some cases second, third and more, employee. Simply enough, we asked: “How do you know when it’s time to hire your first employee?”
The responses were insightful, full of realizations and real-world experience, but when we asked business owners: “How do you value your time?” Everyone was inevitably stumped. Most said something along the lines of: “Well, it’s difficult to put a definitive value on my time.”
While business owners were able to realize the areas where their time was most effectively and most profitably spent, they did not necessarily know how to assign a dollar value to that time.
That’s where Bill Horton, a small business coach at BizFix and educator for Mercy Corps NW, comes in, counseling that it’s absolutely necessary for business owners to put a value on their time.
Horton outlines the following list of questions:
- Time to put a number to an hour of your time. Would you value your time between $50-100 per hour?
- What else could you focus on if you hired someone for $15-20 per hour to do some of your tasks?
- What tasks would you like to take off your plate?
"If you can’t value your time, how are you able to price your product?” Horton asks. “If you're not sure how much your time is worth, how are you able to tell me that bag costs this much?"
And to take that one step further, Horton insists, "For you to be able to cover your living expenses and your business expenses, you have to know how many hours you have to work a month, and... how much are you getting paid for that hour."