Managing Your Business’s Scarcest Resource

If you’ve tracked the way you spend your time you should have crystal clarity about how you are currently using it.

Any surprises?

Are you doing things that you shouldn’t be doing? If so, it’s costing you a lot more than you think, here’s why…

Your business is a system. When you study systems you learn that the maximum output of any process is set by its scarcest resource. And what are the key resources needed by your business? They are; Money; People and Time, aren’t they?

Let’s remind ourselves what’s involved, starting with the first of the trio.

Money – If you have the right business model and you are effectively progressing toward your business goals you should either have, or have access to enough money. And the ability to get more isn’t constrained; there are plenty of investors for the right businesses.

People – There is no limit usually to the people you can recruit or outsource to, especially when you have enough money.

Time – Of the 3 major resources time is scarcest. It’s also totally perishable and cannot be stored. Yesterday’s time is gone forever and will never come back.

Everything you do and your business does requires time. All work (whether useful or not) wears away your time. But, most business owners (at least the unsuccessful ones) take for granted this unique, irreplaceable, totally perishable, and necessary resource.

Competent business owners realise that time is the limiting factor. So, ask yourself the question:

1. What are some of the activities that I am currently doing that do not contribute to my effectiveness?

And once you come up with some answers the next question to think about is:

2. How can I eliminate these time thieves, automate them, or pass them off to someone else?

Then once you’ve done that ask yourself;

3. What are the productive activities that I should be working on?

If you are not sure what activities you should be doing, let me explain how you can arrive at the right answer.

Just imagine for a moment you were going to New Zealand for a year or so and you were going to recruit a manager to grow your business while you were away. Before you left, the new manager asked you – what were the activities that he had to concentrate on, on a daily basis if he was really serious about growing your business as quickly as possible?

What do you think your answer would be?

Surely it would be something like: “Where do you think you should be spending your time.” If you are running your business and if you want to be effective you should be able to answer these two questions.

strong>1. What am I getting paid to do?
2. What should I be paid to do if I am being paid for the right things to be done in my position?

Once you are clear about that – you can then begin to chop out activities that don’t make the list. In my upcoming notes to you I’ll show you how to do exactly that – and get rid of the wasteful activities that clog up your cash flow.