I recently did a wholly unscientific survey on Twitter to find out what hourly rate people were earning working for themselves and taking payment as drawings or salary plus dividends.
The shocking, but unsurprising, result was that 25% were earning below minimum wage.
A further 8% were earning less than they had in their previous employment. In spite of taking on additional business risks.
Whilst in start up mode it may feel necessary to reinvest your profits into the business or to work longer hours to save a salary. This is still a problem but there is a finite period. If you have not recovered your hourly rate by the 3 year mark then you need to get some expert help to tweak your business. (This may be me or another favourite coach)
Look at your pricing, look at the type of work that you’re doing, and look at your internal efficiencies before taking on any more work. It’s no good pouring water into a leaking bucket so fix your bucket first.
Please don’t continue working too many hours for too little reward.
Too many people seem to be adopting a long hours culture. It’s partly because of the lack of options during lockdown but now it is time to STOP.
Your productivity decreases throughout the day. My average work week is just 25 hours with perhaps 90% of the output of a 40 hour week. A lot of my work requires my brain to be firing on all cylinders and that’s not the case as I start to tire.
So why do people work 60-80 hours per week instead of employing a second person for the job? It’s usually because they’re not making enough money to employ somebody else. On a quick Twitter poll the other day 25% of respondents were making LESS than minimum hourly wage. And a further 8% (33% altogether) were earning a lower hourly rate than in their previous employment.
So increase your prices (we run regular webinars on this) so that you can afford to employ/outsource. When your own hours reduce you will probably find that your productivity increases so that you can provide a better service to your customers.
I heard this in a PSA (professional Speaking Association) talk and it really resonated.
Are we putting off the joy that we intended when we set up our businesses?
Are we reinvesting our profits for faster growth when we should be taking some of it for ourselves?
Are we spending silly hours working to grow the business faster when we could be spending that time with friends and family (now that we’re allowed out again).
If you knew you only had, say, five or ten years to live how would you spend your time?