Productivity is about investment. You spend a little up front, and you get a lot in return. But exactly how much should we be willing to invest?
Financial blogger Michael Kitches is a big believer. His post, titled Why I’ll Spend $100 On Tech To Save One Minute A Day, explains his philosophy:
Software that saves me a minute a day saves me five minutes a week, assuming a five day work week. Which is 20 minutes a month. Which is four hours a year. So spending $100 has saved four hours. And as a professional, that’s actually a really good investment in yourself and your time. Spending on software that saves just a minute a day can save you half a day of work all year!
In other words, I’m basically freeing up my time at a cost of $25 an hour for the software, when I try to bill my time to clients or consulting or speaking at a couple hundred dollars an hour. So if I spend $100 to free up four hours, and I can bill out that time at $1,000, I’m generating a 900% ROI by spending $100 on software that literally saves me nothing more than one minute a day!
These are the kinds of calculations that are always worth making. We recently ran the math on whether or not you should add more screens to be more productive. (You should.) We’ve also talked about whether not the non-profit exec should take time off to cook for the annual event. (They shouldn’t.)
Plus, there are many rules of thumb about these kinds of investments that should not be ignored. For example:
- Hire slowly, fire quickly. It’s incredibly expensive to bring someone on, because it takes weeks or months or even years before people are fully productive.
- Train your employees and risk they leave, or as the adage says, don’t train them and risk they stay. In fact, make them attractive to your competitors.
- Early to bed, early to rise…makes a man healthy, wealthy, and wise. It’s better to be early in almost every regard: early to the office to get things done, early to meetings, early to meet deadlines. By investing in being ahead, you’re saving time in the long run.
- Don’t put off to tomorrow what you can do today. Or as Gretchen Rubin calls, it the one minute-rule.
This is all good advice, but if you’re working in a small business or trying to get ahead in your office or just feeling overwhelmed, how do you decide where to invest? Do you buy new software? Upgrade your computers? Go to that conference? Hire some contractors? Or even just clean your desk? Here’s a simple three question test:
1. How much is this going to cost you, right now?
Everything you might do to increase your productivity has an up front cost. That might be financial, it might be purely the devotion of some time, or it might be emotional. Answer yourself honestly and figure out what you have to spend to make this happen.
2. How much is it going to benefit you in the future
If you take a nap, you will feel rested later and have more energy. If you hire that new employee, you’ll have more capacity. Try and predict how advantageous this choice is going to be: financially, emotionally, and in terms of your time.
3. How long will it take to recoup your investment?
Most productivity gains require time to kick-in. If you’re ready to move your small business from the kitchen table to an office, it will take time for the cost of moving and rent to be offset by the increases in productivity and sales. Balance this response against the first two questions.
4. How far behind will you be in the meantime?
This is the hardest question to answer because we don’t always look at ourselves honestly. If you’re a gadget junkie and and an optimist, it’s easy to invest too much in your business and sink yourself. Make smart choices.
Think carefully, and good luck!