Are you costing your business by penny pinching?

Uncategorized Mar 22, 2021

Remember the movie “Groundhog Day?”

Bill Murry is in Punxsutawney, Pa for the annual “Groundhog  Day” event, and for some reason his life gets stuck on that day.

Every morning he wakes up to find that it’s “Groundhog Day” again - all because he can’t change his beliefs and behaviors.

By simply changing some beliefs and behaviors, he discovers he is free to make each day different.

We all have our “Groundhog Days.”

For many entrepreneurs it’s coming to work and experiencing the same event’s, day-after-day. 

Like when you start a project and without any warning an employee interrupts you.

They ask for your help with an unhappy client and since they don’t know what you want them to do, you take the time to solve the problem.

When you get back to your office, another employee asks for your help in solving some other problem. 

These interruptions, distractions, and the fires that need your attention never end, and projects that could scale your business never get gone.

How does this keep happening?

Often, it’s because you hire people based on what you believe you can afford versus what the business needs, and then accept poor performance.

Your beliefs and behaviors about the cost of getting the right people in the right positions has you trapped.

In fact, you rarely think about the real cost to the business by not having the right people.

You give up the freedom to scale the business, because you’re too busy putting out those fires.

So giving up higher income opportunities and personal freedom to save a couple dollars makes me ask...

What price you put on finding the income and freedom you need to scale the business?

Wouldn’t you be more profitable if you hired high-performing people with much better skills for a little more money?

They won’t create the fires that you have to resolve - saving you precious time and money!

And with that extra time think of all the opportunities to explore to improve and grow the business.

Not every investment I made in people was profitable, but I did learn that hiring average and mediocre people is never profitable.

Take your total compensation (or what you believe you should be making) and divide it by 2,040 – the average number of hours a person works in a year.

That number is your hourly rate.

Track for 2 weeks the number of hours you spend putting out fires, solving problems, and performing tasks others could be doing, but you still do.

Multiply that number of hours spent putting out fires and tasks others can and should be doing, by your hourly rate ,and you have the total cost of your putting out fires for that period of time.

Hiring based on what you can afford can actually increases the cost to the business.

So the next time you look at hiring the right person for a position, are you going to look at them as a cost to you or an investment for the business?


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