How can your small business begin boasting annual revenues of $1M or more? It’s a question virtually every start-up asks. So when former finalists of Count Me In’s Make Mine A Million $ Business Contest started breaking the million-dollar barrier, the organization was eager to find out what the common denominator was.
Was it education? Marital/family status? Angel investors?
The real answer puzzled everyone: The million dollar women all had their groceries delivered.
USA Today Board of Contributors member Laura Vanderkam tells the story:
When I caught up with Count Me In founder Nell Merlino at the competition in Newark last week, she told me that these women had something else in common: They all used grocery delivery services. Before they made their millions.
Strange? Sure. But I soon realized that it made sense — and that all of us could benefit from the same mind shift in how we view time and money.
So, what’s the connection? Simple. These women understood, even from their start-up days, that making the highest and best use of their time was a profitable strategy.
That insight kept them from making the classic start-up mistake of trying to do everything themselves to save money. Instead, they leveraged small amounts of precious start-up cash to buy themselves time to do what they do best. In economic terms, they understood the concept of opportunity cost.
How can you follow these stellar examples? Here are three questions you need to answer:
What’s the highest and best use of your time?
To develop this million dollar mindset, first stop and think about everything that needs to be done in your business. (Is your head swimming yet?)
Now, take that list and, item-by-item, identify the highest value tasks. For instance, some may decide that prospecting and product development are top of the list. Others may choose networking and participating in social media.
Remember, this exercise isn’t about urgency, and it’s not even about what you find most appealing. It’s a ruthless assessment of what tasks, executed consistently, will bring in more business. And it’s not just a one-time exercise, either. Chances are, this list will shift as your business grows.
What’s the likely return on investment (ROI) for these tasks?
Here, it’s important to develop a vision beyond a “to do list” mentality. This vision will drive how you view your time.
For instance, if you picked “networking” as one of your high-value tasks, consider what one additional hour per week spent here would yield in a year. Be specific here – put numbers to it. If you meet 5 more prospects or referral sources each hour, you will have contacted 250+ more potential sources of business in a year. Out of those 250 sources, what percentage could become (or refer) customers? What’s the average lifetime value of a customer for you? Do the math, and the motivation will take care of itself.
Where can you buy more time for these tasks?
Here’s where the million dollar women got creative. They knew that the hour they spent at the grocery store each week buying milk and bread would be far more profitably spent chasing that $50,000 contract. The extra $10 or so they spent each week on “frivolous” grocery delivery actually yielded far more value than the annual amount of money they would have saved.
You can probably think of half a dozen “time drains” in your own life. Some of them may be personal tasks, like grocery shopping; others may be business tasks, like bookkeeping. They’re all necessary. But in every case, the litmus test is: What’s the value of your time versus the money you invest in outsourcing?
(But don’t sacrifice activities vital to your health and sanity. That exercise class and those family dinners are high-value, too.)
These women prove outsourcing is for start-ups, too
Don’t think that being in start-up mode precludes outsourcing. As these million-dollar women demonstrate, creativity is key. With little or no cash, you can still:
- Barter for services with other start-ups (but be sure to consult your tax advisor about IRS and state guidelines on records, etc.)
- Use high school and college students who may need portfolio pieces for their art, copywriting, web design, etc., classes.
- Join groups that allow you to leverage common activities. For instance, you can cut the time it takes to prepare family meals by joining a once-a-month cooking club in which members prepare meals in quantity and swap dishes.
- Form a “brain trust” of like-minded entrepreneurs you can bounce ideas off of. Other members can help you brainstorm ways to save time and effort.
As you grow your business, though, keep re-evaluating the “highest and best” uses of your time. Remember, the thing that separates these million dollar business owners from their competitors is understanding the value of their time. The results prove it’s a profitable mindset worth emulating.
Where are the “time drains” in your life, and what high-value million dollar business building tasks could you be using that time for?
Deborah Savadra, a.k.a. “That Blogger Broad,” is a freelance marketing writer and blogger. For more information on her services, go to http://www.savadra.net and http://www.thatbloggerbroad.com, or email her at deborah_at_savadra.net.