Let’s take Joe Advisor as an example. Joe is constantly struggling to balance the various operations at his firm. Some of his biggest time commitments include case preparation, data entry, application completion and processing, prospecting, appointment scheduling, workshop mailings, client events and other marketing activities.
Considering all the responsibilities Joe has, what would you guess one hour of Joe’s time is worth? Let’s calculate that figure based on last year’s numbers:
- Joe made $350,000 in gross revenue.
- He worked an average of 45 hours per week.
- He took four weeks of vacation, leaving 48 weeks of work.
Given these numbers, Joe made a wage of $162 per hour. Let’s focus on the time Joe spends on just one of his many non-revenue producing tasks. On any given week, Joe devotes roughly five hours to filling out applications. Would you pay someone $162 per hour to fill out applications? That is exactly what Joe has done by “hiring” himself to do this task.
Joe has finally had enough of this arrangement and hires an assistant to fill out applications for him. He pays his assistant $20 per hour.
So let’s look at the power of delegating this one task. Immediately, Joe has an additional five hours in his schedule each week or 240 hours per year. Suppose Joe is able to replace just one of those five hours per week with revenue-producing activity (meeting with a qualified prospect, for example).
Now let’s suppose Joe averages a case size of $100,000 with a 6 percent commission. He will have brought in an additional $6,000 with his newly available time. Now how do Joe’s year-end numbers look?
- Cost of assistant = $38,400 ($20 per hour x 40 hours per week x 48 work weeks)
- Total additional revenue to firm = $288,000 ($6,000 x 48 work weeks)
- Total net return = $249,600
Joe was able to increase his firm’s revenue by nearly a quarter of a million dollars by taking work off his plate!
This example demonstrates how many of the top grossing financial firms in the country have been able to grow their businesses exponentially year after year. So, what is your time worth?
Sign up for The Lead and get a new tip in your inbox every day! More tips:
- Free yourself to do more by delegating
- Time management made easy
- Advisors: Consider a virtual assistant
Brad Johnson is the vice president of marketing for Advisors Excel. For more information, go to http://www.bradjohnson.biz.