Most profitable / effective use of time

Discussion in 'Self Improvement and Being Successful' started by hotwired, May 23, 2011.

  1. hotwired

    hotwired
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    I have been a real estate investor for just over two years. This question centers around “opportunity cost.” I ALSO own and work in a lawn care business, own and run a small web design business, as well as own and manage several single family and multi-family apartment buildings. (43 units)

    When I’m actually earning income in the lawn care business, my gross hourly rate is $60-$70 per hour before expenses. (and expenses are pretty high in that business – fuel, equipment, insurance, etc.). In my web design it’s hard to say. I don’t make ANYTHING “running” it on a per hour basis, but when I’m doing a paid task, it’s $50-$100 per hour with VERY low overhead.

    Now, in my rental RE business, because I’m not trained in carpentry, handyman stuff, etc., I tend to be fairly inefficient in those areas so I hire out. In addition, my cracker jack painter gets $20 per hour (and he’s good, and he’s FAST). My two handymen get $16 per hour. I have a “higher end” carpentry team that gets $25-$30 per man-hour. I want to make an intelligent decision on where to spend my time.

    Where I’m “stuck” is this: When I “avoid” paying my handyman $16 per hour, I’m “making” $16 per hour by “saving” $16 per hour. (A penny saved is a penny earned) It’s very black and white. (let’s forget for now the fact that it will take me 1.5 hours to do whatever they do in an hour!). When I’m working in my lawn care business, earning $65 per man-hour … am I REALLY making $65 that for comparison purposes? Or do I want to find out my “after expense” hourly rate? I know the answer is simple but I’m just STUCK! I usually bring my lawn care business income down to "zero" becuase I sub much of it out, and pay ourselves a salary, but I know my "time value" in that company is worth more than the "before tax zero" bottom line...Thanks to any of you wonderful numbers people out there who can bump me in the right direction.
     
  2. Fergal

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    hotwired well done on having so many businesses, you are obviously very adaptable to be able to successfully run such diverse business types. From what you say it sounds as if your web design business is the most profitable on a per hour basis. If you reduced your hours on your other businesses could you increase the amount of time and hence money you make from web design?
     
  3. hotwired

    hotwired
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    thank you

    thank you for your reply. Yes, I could probably increase time spent with web design. What I did not mention (do avoid topic dilution) was that my web business affords alot of opporutunities to setup (forgive the cliche) recurring streams of passive income! So it may be in my best interest to concentrate here anyway.

    My accounant chimed in and said to make the comparision solid, figure my "replacement" cost vs. what I take in per hour. In other words, instead of comparing $60 gross income for my lawn care business, what would it take to replace my physical presence on the mower or on the shovel earning that amount? In this case, then the web business becomes even more attractive from a strictly $$$ POV.

    The next questions are "what brings me the most satisfaction? what jibes with my mission, purpose, etc?" And of course, no one can answer that but little ol' me!

    Thanks again for your thoughtful response.
     
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  4. Fergal

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    Thanks for posting back hotwired, having a passive source of income is excellent. If you start spending more time on the web design business you will have to spend less time on something else. Do you know what that something else will be yet?
     
  5. hotwired

    hotwired
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    title

    My wish would be to spend NO or little time on the realestate maintenance. I have actually begun to pull away from that. From there, I'd probably cut down on the landscape work, though I DO like a smidgen of it for the excercise. Then next is doing an "80/20" on my time spent in the office. With 3 businesses, there's alot of "stuff" that comes across my desk that all seems very urgent at the time ... My weakness is checking off lists. Sometimes the most efficient use of time is to leave certain lists "unchecked" for a time~!
     
  6. Fergal

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    hotwired maybe what you need to do is to prioritise your time so you are spending it on the most important tasks rather than the most urgent ones. There is always urgent stuff vying for attention, but very often it really doesn't need to be done at all.

    When writing my things to do list I put the most important tasks on top and leave the urgent but unimportant tasks towards the bottom of the list. When you have what seems to be an urgent task, ask yourself if you really need to do it or would you be better off spending your time on something more important. When you get into the habit of working this way, you eventually find that there really isn't that much urgent stuff to be done and you begin to work much more efficiently and without interruption.

    Could that kind of approach work for you?
     
  7. scottytruman

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    I think you should focus your time on your most profitable business and let your trusted employees handle your not so profitable businesses. In that way, you can maximize your earning potential without sacrificing or giving up other businesses.
     
  8. Clint Cora

    Clint Cora
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    You are making the $65 per hour only if you get business. If you are not getting business, then it's better to do something rather than nothing. In other words, you should be spending your time in what brings the most revenue for you at that time.
     

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