- If everybody at your organisation
is understanding this principle
in hiring not to add capacity,
but to free their time up so they can work
in more of their genius, their unique ability.
It's a game changer.
(upbeat music)
Hey there, Dan Martell here, serial entrepreneur, investor,
and creator of SaaS Academy.
In this episode, I'm gonna share
with you how to buyback your time to increase your profit.
It's literally, if you feel like you're frustrated,
you've got way too many direct reports,
you've finish your day and you're wondering
what did I actually get done,
and literally growing will cause more pain to you,
then you need to absolutely listen to this piece.
So I'm gonna share with you how
I teach my clients to strategically buyback their time
in a way that's more profitable and it creates a business
they don't grow to hate,
and be sure to stay at the end we're gonna tell
you how to get access to my exclusive,
download the Next Higher Focuser,
it's the worksheet that I use
with my clients to help them walk through exactly
where they should be focusing their hiring plan
to buyback their time in the most profitable way.
So I wouldn't be exaggerating if I said
this is probably the most important topic that I talk
to my coaching clients about.
And the reason why is I've learned that
if we don't learn how to hire people in the right sequence,
that we'll eventually grow a business that is painful.
That the more we grow we'll literally
like be driving with the handbrake on.
We won't wanna push on the gas 'cause it hurts. Okay?
It sacrifices our time, it zaps our energy, you know,
and the other day I was talking
to one of my coaching clients, Owen,
and he ran into the same issue.
Literally growth in 2020, but started to stagnate and slow
because he didn't have the right people infrastructure.
He didn't make the right hiring because for him
a lot of times when we're hurting
it's 'cause we think the next hire is an expensive hire.
Okay? It's a VP. It's an Operations person.
Here's right off the bat.
If you're thinking of hiring an Operations person
and you don't have a Personal Assistant,
start there. Like you never hire somebody to operate
your business if you don't have an Executive Assistant
taking care of that type of stuff to free up your time.
So I'm just gonna give you that quick one
but I'm gonna jump
into the four key strategies that you need
to consider to really understand the mindset,
the beliefs, and the tactics to buyback your time.
Number one, the buyback principle.
So the first off, when people ask me,
"What is what does that mean the buyback principle?"
Here's what it means.
It means when entrepreneurs, okay, will not grow into pain.
So if there's this threshold of pain,
you growing if it means more pain, you won't do it.
How does that show up in your business?
Well, it means that you're slow to reply to emails,
you don't follow up an introduction
to potential partnerships,
you don't aggressively, you know, go for the close
when you have a sales call,
you don't, you know,
build certain features because it's gonna take a lot
of time to map out the product roadmap, or whatever it is.
But essentially it's painful for you to grow.
If you sell, you gotta deliver, you gotta activate,
you gotta onboard, there's all these things.
And what I've discovered is most people when they do hire,
they hire people to just add capacity.
They hire a developer, they hire a support person.
They hire a frontline worker, whatever, which isn't bad.
But the problem is is that if you do that a lot,
eventually usually around 12 employees,
you're gonna get overwhelmed.
You're gonna hire a bunch of people to add capacity
but it actually doesn't free up your time.
So what you wanna do instead is the buyback principle
is 100% focused on shifting the hiring from just hiring
for capacity to instead hire for capability.
Capability means you freeing up your time
to be more capable to invest higher value
time of yours into revenue generating activities. Okay?
So it's to buyback the lower value activities
so that you can focus on higher value activities
from your calendar.
Why is that important?
Because just think about this.
If you had a calendar
and you looked at your calendar, you said,
"Here are all the things I've done the last two weeks."
And you just highlighted, you know
groups of things, either red, they zap my energy
and I hate doing this or green, I love doing this.
And you looked at it.
It could be maybe today, 60% red, maybe it's only 40%,
but imagine this, what if your calendar was all green?
What if you woke up and all the work you worked on,
you did, was stuff that energise you, added value
to your business, generated revenue
and high gross margin, profit to your business.
You would transform the way you attack the day,
you would jump out of bed ready to hit your work.
You would be motivated to talk to customers,
talk to partners, talk to anybody
that could help you scale up,
because it would mean more of that.
And that's the opportunity.
That is the buyback principle.
And that's the number one thing you need to understand
is that we're buying to get time out of your calendar.
Number two, calculate your E.H.R.
So your E.H.R stands for Effective Hourly Rate.
Here's a simple equation.
If you take your revenue, okay,
and you just call it $1,000,000, okay?
Or even your ambition this year, if you wanna get
to $1,000,000 revenue and you divide it by 2000
which is about the amount of hours
that a person's gonna work in a year,
that means your hour is worth $500.
Okay? $500.
Well, if you look at like the list
of tasks that you're working
on throughout a two week period,
there's 80% that are low value.
Okay? The 80-20 rule.
And there's 20% that are high value,
maybe between two to $500 worth of value.
These are things like selling, marketing, partnerships,
product development potentially, right?
But these are things that only you can do
or the things that bring you energy,
that creates a lot of value for your business.
Everything else, this long tail
of activities needs to get off your plate.
So what I say is this,
if you can hire somebody for a quarter of that value,
meaning that if it's $500 an hour, that's 125
you could pretty much hire anybody.
Just even think if you're $1,000
or 100,000 a year, that's $50 an hour.
Is there anything you can hire people for $12.50
to do that's on this line of long tail activities?
The answer is yes.
You can hire people through sites
like Upwork to buy people, to out task certain functions.
Most people think, "I need to hire a full-time person."
No you don't.
Out task that work using
your effective hourly rate as a gauge. Okay?
So a quarter of your E.H.R is where you should be looking
for opportunities to invest to buyback time.
Number three, hire multiple hats.
Most people when they hire,
they hire one person to do a thing.
I need a designer. All they do is design.
I need a Facebook person.
All they're gonna do is Facebook.
I need a whatever, and all they're gonna do is this.
Here's my thing.
If you look at your calendar
and you see these chunks of work, okay?
Maybe what you'll discover is there's two buckets
of type of work.
One's more office and operational,
the other one's more marketing type tasks.
Social media posting, Facebook.
What you wanna do then is say, "How can I hire
for a role that they'll do those three buckets of things?"
Because there's value in that.
So, I think that people forget when we started
as entrepreneurs, we wore seven hats,
14 hats, a tonne of hats. We wore all the hats.
And then what we do is we hire people
and we hand a hat over.
What I'm saying is hire and hand over three hats, you know?
Hire somebody who's gonna lead your marketing and say,
"Here's all the things I do in marketing.
One, two, three, four, five, six, seven.
You now do this.
I know you may not have experience, but I trust you.
And there's free courses online,
and there's YouTube videos,
go check out this guy, Dan Martell.
He's pretty smart.
He's got a bunch of videos on certain things."
And just hand it to people.
I think people underestimate how capable folks
are if you actually empower them
and you coach them as a success and you just say,
"These are the outcomes that I'm gonna hold you accountable
for. Figure it out,
let me know if you're stuck and every week we're gonna meet
and you're gonna show me where you're at
and are you making progress?"
So that to me is one of the big ideas,
the aha moments,
between the buyback principle is you buyback multiple hats.
You give groups of activities
to one person and say, "Hey, you're
in charge of invoicing, client activation and receivables.
Okay?" It might sound crazy, but why?
Well because they're working
with the customer and activate them.
So they should make sure that the invoice get done,
and if somebody hasn't paid, ask them about it
since they have a relationship with the customer.
That's what I'm talking about
when I say hire for multiple hats.
And number four, build throughput.
So my whole thing when I look at scaling companies
is I'm trying to drive revenue.
I'm trying to create throughput amongst my management team.
So for me, it's not even that I buyback my time.
If you have leadership,
you need to teach them how to buyback their time.
If everybody at your organisation is understanding
this principle in hiring not to add capacity,
but to free their time up so that they can work
in more of their genius, their unique ability,
it's a game changer.
If you just ask people to hire folks to add capacity
and it doesn't free up their time,
you're gonna burn them out,
they're not gonna stick around with you,
especially your A-players.
So I have, like I hire Executive Assistants
for all my senior leadership team.
Why? 'Cause it's the cheapest amount
of labour capital I can deploy to have them free
up their time to think strategically, to look like..
Essentially they're in the forest they gotta look up
and look over across the forest and say,
"Where are we going?"
That's strategic thinking.
If they're leading a marketing, a sales team,
customer success, they need the space in their calendar
to do that and that doesn't happen
if we just keep adding people to fill capacity.
We need to increase the capability.
We need to increase the throughput,
what I call management bandwidth,
so that you can scale your company even faster.
So quick recap. Four strategies to buyback your time
to increase your profits.
Number one, the buyback principle in essence. Okay?
Number two, the calculate your E.H.R and use that to hire.
Number three, hire for multiple hats.
Number four, build throughputs.
As I mentioned at the beginning of this episode,
I wanna share with you an exclusive resource
it's called the Next Hire Focuser.
It's is literally the worksheet that I use when
I'm coaching clients through this process
for them to understand. Where are you spending your time?
What brings you energy?
What's valuable to the business?
What are the lists of things that you're doing
that you could group together
and hire that person and make sure
that you have a very clear task list of things
when you bring that person in?
Here's what you're now owning, hand it over to them.
Give them guidance, coach 'em to success,
click the link below to download your copy
of my Next Hire Focuser to make your next hire a success.
It will free up your time
and add tremendous amounts of profit to your business.
I'm really excited for you to deploy that.
Let me know in the comments how that works out.
If you liked this video, be sure to subscribe to my channel,
smash that like button,
and share this with any other entrepreneurs
you know are struggling
and need to consider redeploying their capital
into more effective people time.
So, share that link with somebody you love.
As per usual I wanted challenge you to live a bigger life,
and a bigger business, and I'll see you next Monday.
(upbeat music crescendos)