What is Your Time Worth?

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I am a specialist in the areas of Business Intelligence and Data Analytics, so I admit that I have probably thought about this too much.



With website analytics, there are numerous metrics that can be useful, including:
  • Sales per Visit
  • Lifetime Customer Value
  • Marketing Campaign ROI, etc.
It occurred to me that I needed a useful metric for analyzing various projects I am working on and opportunities that come my way.

For my purposes, I created a number that has helped me measure my productivity and make decisions related to how I needed to invest my time.

That Metric is what I call NHP90 - Net Hourly Profit in 90 days. I can look at any project I am working on and determine how much net income I think it will produce in the next 90 days for each hour that I invest.

If I am consulting, then this number is pretty easy to determine - it is simply the hourly rate I am charging minus the amount of taxes I expect to pay on that. So if I am charging $100/hour, and I think that my full tax rate will be 35% this year, then my NHP90 is simply $65.


If I am working on promoting a product launch, then it is a little harder to determine, but let's say that I expect to spend 10 hours learning about a product, testing it and writing a series of email or a video review for my blog. If I make a guess that this new product I will be promoting as an affiliate could bring in $2000 in affiliate fees in the next 90 days, then after taxes I will have an NHP90 of $130.


But what about a membership site or a product I create that is evergreen and could sell for several years? Well those are great, but most of the time it is really hard to estimate the amount of ongoing maintenance and promotion you will need in order to keep that site going or to continue working JV deals or PPC campaigns to keep the subscriber base or sales growing.



So even though my first 90 days may only bring in a fraction of the lifetime income from that project, I will have to re-analyze the on-going investment of my time after 90 days. It hopefully will decrease significantly so that my NHP90 on that project goes way up as I spend less time (rarely no time at all) yet continue to produce revenue.



You can change this metric to meet your own needs, or come up with a different metric altogether, but I encourage you to have a metric that helps you get a firm grasp on the value of your time.


And this goes beyond the time you spend on business projects. Let's say that you spend 3 hours over the weekend working on your yard. If you could have hired someone to do the same work for you for $75, then your NHP90 for that work was $25. If you had other projects you could have spent those 3 hours on with an NHP of $100, then you would have been better off hiring someone to do the yard work while you stay focused on your other project.


I know that things are not always that simple - maybe you enjoy working in the yard. Maybe you hire someone and then spend those 3 hours watching a football game. I don't know your life, but you really need to look at how you invest your time. And then after a project is complete you need to analyze how accurate your projections were.



Have you developed a good way to measure the value of your time? Let me know if this works for you or how you might improve it.
#time #value or roi #worth

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