A Day in the Life: Time Value of Money

Revenade Managing Director, Tim Phillips, discusses the money value of time.

Transcript

Hello and welcome, this is Tim Phillips with Revenade, and today I want to share with you an idea called the time value of money. I know many of you have studied financial and investment analysis and in that we've all learnt about the concept of the time value of money that a dollar today is worth more than a dollar tomorrow and it is the basis for all compounding and also the discounting of future cash flows and with it we can make sound investment decisions when we have competing alternatives. 

I want you to set aside now though, I want to shift your attention and change your paradigm and the reason for that is that the truly only non-renewable resource that we have is time. And I know many of us in our career have taken time management courses and we have day timers and we have all kinds of electronic devices to help us in scheduling ourselves, but the truth is that we can't manage time.  Time marches on, time has no beginning and time has no end and we are here for just a brief spark as we live our lives and our careers what we do have though is that we have the power and ability to choose which activities we invest our time and we want to invest our time in those activity that yields the highest value. So how do we define this? Hence, the money value of time is that we are having a business conversation that whether you are an executive, or a manager, a sales professional, think in terms of what is the value of an hour of my time. So let's say I want to earn a million dollar this year and there is roughly 2000 working hours in a year, so the money value of that one hour is 500 dollars. A million dollar divided by 2000 hourly equivalent is 500 dollars an hour if you want to earn 200,000 dollars it’s the same concept divide 200 thousand by a thousand dollars its 100 dollars an hour the reason why we are looking at it this way is that we can evaluate what activities am I doing throughout the course of the day that I should be, and I could be outsourcing or delegating to someone else that doesn't yield that higher value. So in essence if I can outsource an hour worth of activity to someone else that they can do effectively for less than 500 dollars an hour, then I should pay them up to 500 dollars an hour to do that to free me to focus my time in those areas and those activities that are going to yield the highest value. So if I'm an executive my focus is shareholder value always increasing shareholder value and the way that I do that is to be making decisions so instead of gathering information and doing analysis and comparative analysis to make a decision, I delegate that. What I want to do though is have as many hours in the day as possible to be focused on activities where I can invest my time that is going to increase my shareholder value. So I really want to be in a position to be making many meaningful decisions to maximum my effective hourly rate. If I'm a sales professional, we all know about the golden selling hours 7:30 am to 5:30pm Mondays through Fridays those are the time I have to speak with prospects to qualify them, to give demonstrations to submit proposals to make presentations in other to close. My activity as a sales professional should be focused on accelerating the sales process by finding more and highly qualified opportunities thereby investing the time to position and to present and to close, I can accelerate my sales performance. So anything that is strenuous or outside that or that will steal away from those hours, I want to outsource or I want to delegate. So I want to turn you on to two really cool web services one is called fiverr.com and the other is Elance.com even if you are a new sales professional or a manager and you don't have a full time executive assistant you need one. Now you have the ability to effectively hire one without having to hire a new employee with a salary and annual burden. What you have the ability to do now is to outsource specific functions that you need to have done to someone or to be negotiated on hourly rate then you can take all those mundane and time eating activities and give them to someone else. So as what, Writing reports, gathering contents, doing research, publishing an article, publishing a book there is plenty to count. Copying all of your expense receipt shipping them to someone who can input them for you these are opportunities that you now have without having to hire the traditional executive assistant. Moreover, what we want to do is to accelerate and maximize the hours of opportunity that we have to leverage all unique skills and abilities to position, to propose, to present and most importantly to close new sales opportunities. That's the way we accelerate sales performance, that's the means through which sales cycle-time, and simultaneously increasing our closing ratios. So I hope you find this helpful, check out those websites they are really great and I think they will really help you. So until we meet again, to your success thanks bye now. For more information about Revenade sales playbook visit our website at www.revenade.com