Do you run a small business? Or does your small business run you?
As entrepreneurs, there are countless things we could do to grow or improve our businesses. It's easy to keep busy 100 hours a week. I know — I've done so countless times throughout my career. Unfortunately, I'm not the only one who has convinced himself that working long, crazy hours is a must if you want to find success.
The reality is, however, that there is a point of diminishing returns. Although more work might produce greater results, the return on the additional effort decreases significantly.
We work too hard
There are many reasons why people work so hard.
Although it's sometimes because there is simply too much on our plates, more often than not, we work around the clock for other reasons. Do any of these sound familiar?
You feel like you're a slacker if you don’t work all of the time.
You worry that if you don’t complete every task, you may lose business opportunities.
You work nonstop because it allows you to avoid dealing with difficult issues in your life.
Or maybe there's some other reason. Regardless of the reason, most business owners work too much.
What if you were only allowed to work one hour a day?
I've been experimenting with this concept for nearly a year and have been relatively successful at keeping my time invested in my current business to about 20 hours a month.
Why am I doing this? There are two main reasons:
1. It forces me to focus on what's really important
Each morning I ask myself, what's the one thing I need to do today? What is the one thing that will create the most value? What is the one thing that only I can do? And that is the activity I engage in for the day. I delete, defer or delegate everything else.
Instead of keeping myself busy and climbing to the top of the “S” curve, I stop at the point of diminishing returns. The Pareto principle might state that 20 per cent of the effort provides 80 per cent of the results, but whether it's 20 per cent or 40 per cent is not important. The key is that you find the point in your business where more effort starts producing fewer results — that's your "star" point — and only you can decide that.
Will you extract 100 per cent of the potential value? Probably not. But is squeezing out an extra 20 per cent of value really worth four or five times the effort? That’s your choice. I could work 10 times harder and only increase my income 50 per cent.
The key is to focus on activities that maximise results.
2. It frees up time to create new business
If you spent only 20 per cent of your time extracting 80 per cent of the revenue from your existing business model, this gives you 80 per cent of your time to do something different.
You could, of course, spend your free time taking a vacation or spending more time with family. You could engage in work that you believe is more meaningful. You could volunteer and give back to society.
Or you could create a new S-curve.
Instead of squeezing out those few extra drops from your current business model, build a new business or new business model that leverages your past success and creates entirely new revenue opportunities.
With the extra time created, I’ve been working on a new book that targets a completely different market for me. I’m working on a TV show concept. And I'm creating new products that leverage my intellectual property.
These items take upfront effort. But when they're done and have built up momentum, I will spend less time on those businesses, freeing me to create new revenue streams.
Encourage creativity and freedom
The purpose of working one hour a day isn't to encourage laziness. And I'm certainly not suggesting you do a mediocre job, as this will kill your business in the long run. The purpose is actually to encourage creativity. This philosophy creates time/space for you to create — to create new opportunities, to create new revenue streams, and to create a better life.
Even if you don’t believe working only 60 minutes a day is possible, give the thought process a try. Use the “hour a day” mantra as a mental exercise. Determine what you might do if you only had an hour. Even if it ends up taking you four hours, it's still better than the 10 you were previously investing. Now, what are you going to do with all that extra free time?
This post originally appeared on OPEN Forum, an online community providing small business owners with information and advice to help them do more business.
This article represents the views of the author only and not those of American Express.
Board of Directors, National Speakers Association