The Ultimate Perpetual Motion Business
“If you spend a dollar, do you intend to get more than a dollar?”
“If you spend an hour, do you intend to get more than an hour?”
A member of my 3to5 Club got me thinking of how to distinguish an expense from an investment: “If you spend a dollar, do you intend to get more than a dollar’s worth of something in return?” Then I applied this to my use of time: “If you spend an hour working, do you intend to get more than an hour’s worth of work completed?”
This is the clearest distinction between an expenditure and an investment of time or money that I’ve come across. If I properly classify something as an expenditure, I do not expect it to produce additional revenue. It is a sunk cost—it’s what I spend to keep the lights on, the rent paid and the computers running.
Likewise, if I have a random meeting or spend time on a repetitive part of my business, that is sunk time: I will never get it back and I end up having to do the same thing over and over.
Contrast this with these investments of money and time:
- Continuing education: you spend two hours to learn something to improve your service to many clients.
- Hiring someone: this involves a fixed cost and an initial training cost but the desired result is better, more consistent results from someone who’s an expert at that thing.
- Setting up an “organizing/purging” machine that will reduce your time “wasted” looking for things or reshuffling clutter.
Similarly, when you spend an hour on something ask yourself these questions:
- Is this person either your ideal client or able to connect you to your ideal clients? If so, that one meeting has likely saved you countless hours of trying to find that right client or clients.
- Does spending this hour multiply your time? For example, can you block-schedule multiple meetings in the same location to leverage your travel time investment?
- Does this hour allow you to do something for the last time? Can I develop or refine a tool or a template for use with other clients by spending a bit more time now?
- Which expenses might you frame as investments? How much more time will that expense provide? How much more money (ROI) will that investment provide?
- Review your schedule for the upcoming week. How many of your meetings or office times are time expenditures? How can you turn those into time investments?
Originally posted 2013-08-05 09:43:26.