How do you know the right projects to work on at the right time?
This is a PLS Newsletter topic on following the money to achieve success. Sign up for the PLS Newsletter today!
In business and life there are really only two important commodities: time and smarts. Of those two, time is in very limited supply while smarts are in fact abundant, but often underperforming.
Time is in limited supply for all of us, so until you discover how to make a 25 hour day, I suggest you learn how to manage your time more wisely. Smarts, on the other hand, can be gained through learning, being focused, and by applying your creative and intellectual facilities.
So, what does this have to do with money? Well, today, I’d like to discuss how you might analyze your own time and smarts to improve your earnings. While my focus is on the business owner and self-employed, I still think that even if you’re an employee that you’ll identify areas for improvement - you’ll just need to convince your boss!
Unless you are earning sufficient income from your efforts then you are a hobbyist. “Professional hobbyist” do what they love, often at the expense of their financial success. I think we all know more than a few surveyors, engineers or architects that are great at what they do - and love what they do - but are dismal at business. Heck, in the past I’ve fallen into this trap. The best way to change from being a hobbyist to becoming a successful business person or entrepreneur is to use money as the metric to find the best use of your time and smarts.
Just like purchasing a new car based on miles per gallon (MPG), you can evaluate your business and efforts using dollars per hour (DPH) and by maximizing dollars per smarts (DPS), or mental effort if you will.
Determining DPH for your existing products and services is very straightforward. Simply take the revenue you make for any given service and divide that by how many hours (yours and others) it takes to earn that fee, and that’s your DPH. Even better is to use profit instead. Let’s look at two examples using two different $2500 services:
DPH Example No. 1 - Boundary survey: Say that your typical boundary survey fee is $2500, which takes a total of 24 hours to complete. Doing the math, that calculates to $104.17 per hour.
DPH Example No. 2 - Septic design: Say your typical septic design fee is also $2500 and it takes a total of 10 hours to complete. This service calculates to $250 per hour.
The math and examples are simplistic and obvious, yet I regularly see clients miss this obvious point and waste significant time working on the wrong services. Follow the money! Simple, right? But, why is it that this simple analysis is routinely overlooked by many people? I’ll tell you, it’s because they’re hobbyist, albeit doing what they love, and they’ve confused “busy work” with profitable work.
Maximizing dollars per smarts (DPS) is a little more subjective, and in the end often is an analysis of how to maximize earnings by getting the biggest return on your “smart work”. Unlike the above examples, where you can use actual hours worked to divide into your fees, I like to invent a “smarts” factor for every service I provide.
In Example No. 1 above that could be a 10 out of 10 because boundary surveys can be complex and take a lot of mental work on my part. This calculates to a DPS factor of $250. In contrast, Example No. 2 is more like a 5 out of 10, which calculates to a DPS of $500.
So, as is, the first example is both less profitable, overall, and results in half as much income per hour based on your mental efforts (smarts)! This leaves you with two options. One, you can adjust your fees accordingly, making the boundary survey example more profitable, or two, you can concentrate your efforts on those services with the greatest return on your time and efforts. The former is often harder to do than the latter.
It took me too long to embrace these simple evaluations. All the while, I was underperforming and unwittingly missing opportunities. The sooner you learn to follow the money in your business and your life, the sooner you’ll increase your earnings, reduce stress, and increase your happiness. Money isn’t everything, but it is helpful for purchasing food and keeping a roof over your head!
There’s an old saying that goes something like this:
You can’t live like a king at night if you earn like a pauper during the day.
I love land surveying. I do, really. But, it’s often a difficult business with too little return for the effort, in my opinion. And, I’ve done it for a long time now, so the honeymoon is long over. In April of 2008, I started on a journey of blogging and exploring into social media. My goal was to build a new business and to step outside of my own comfort zone. Early on, I decided that I wanted to transition to this new career by this year, when I turned 50.
I only had a broad idea of promoting surveying and helping surveyors at first. I tried a few different things, but in the end I followed the money. For example, as it became clear that AutoCAD Civil 3D caused heartburn for many surveyors, I turned my experiences with learning and setting up Civil 3D into training and consulting services. I’ve also been successful in helping companies improve their productivity, customize their software and enhance their marketing efforts. Thanks to social media, the internet, and a lot of hard work, I’ve been able to build an international consulting business - how crazy is that!
It’s very exciting creating a new company and it’s rewarding when that company succeeds. What I’ve discovered is that you’ll be more successful if you set goals and write them down. This has proven true for me many times and particularly in this case. I’ve met my goals this year and my consulting business really took off. More important to me, though, is that I’m helping others to build their businesses and be successful, too.
There will be more to follow on this news, but for now what’s important is that by following the money I’ve become very focused on solving many of your problems. So, I’ll be sharing more on solutions to improve your work and business, often through innovative technologies. Please let me know your struggles if you think I can help.
While not at all a drastic change to what I’ve been doing, my focus will be more on helping you to do and earn more. Some technologies and strategies might be incremental improvements, while others are disruptive game-changers. There are solutions and companies I will share that I have no connection to and others that I am working with. Either way, I will give you my honest opinion and be transparent with my business relationships.
Ultimately, I want to help you be more successful by discovering your maximum earning potential. To achieve this you must evaluate what you are doing now and identify that work which brings the greatest rewards for the least amount of effort (which leaves you with more time to do and earn more). When appropriate, adding a sprinkle of useful technologies and techniques is helpful, too.
Thank you, work smart and be brilliant!
- Eric D. Colburn, PLS
Land Surveying & AutoCAD Civil 3D Consultant