Dan Martell - How To Buy Back Your Time & Increase Profit

00:00:00.080 If everybody at your organization

00:00:02.640 is understanding this principle in hiring,

00:00:05.400 not to add capacity, but to free their time up

00:00:08.920 so they can work in more of their genius,

00:00:11.040 their unique ability, it's a game changer.

00:00:26.600 Hey there, Dan Martell here,

00:00:27.680 a serial entrepreneur, investor, and creator of SaaS Academy.

00:00:30.240 In this episode, I'm gonna share with you

00:00:31.920 how to buy back your time to increase your profit.

00:00:36.060 It's literally, if you feel like you're frustrated,

00:00:38.760 you've got way too many direct reports,

00:00:40.520 you finish your day and you're wondering

00:00:42.160 what did actually get done,

00:00:43.820 and literally growing will cause more pain to you,

00:00:48.060 then you need to absolutely listen to this piece.

00:00:50.960 I'm gonna share with you how I teach my clients

00:00:53.440 to strategically buy back their time

00:00:55.700 in a way that's more profitable,

00:00:57.300 and it creates a business they don't grow to hate.

00:01:00.600 And be sure to stay at the end

00:01:01.440 where I'm gonna tell you how to get access

00:01:02.760 to my exclusive download, The Next Hire Focuser.

00:01:06.120 It's the worksheet that I use with my clients

00:01:08.480 to help them walk through exactly

00:01:10.100 where they should be focusing their hiring plan

00:01:12.980 to buy back their time in the most profitable way.

00:01:15.360 So I wouldn't be exaggerating if I said,

00:01:17.440 this is probably the most important topic

00:01:20.840 that I talk to my coaching clients about.

00:01:23.740 And the reason why is I've learned

00:01:26.180 that if we don't learn how to hire people

00:01:29.220 in the right sequence,

00:01:30.600 that we'll eventually grow a business that is painful.

00:01:34.700 That the more we grow,

00:01:36.280 we'll literally like be driving with the handbrake on.

00:01:39.240 We won't wanna push on the gas

00:01:40.560 because it hurts, okay?

00:01:42.040 It sacrifices our time, it zaps our energy.

00:01:45.320 You know, and the other day I was talking

00:01:46.520 to one of my coaching clients, Owen,

00:01:47.860 and he ran into the same issue.

00:01:49.620 Literally growth in 2020,

00:01:52.880 but started to stagnate and slow

00:01:55.500 because he didn't have the right people infrastructure.

00:01:58.500 He didn't make the right hiring because for him,

00:02:01.040 a lot of times when we're hurting,

00:02:03.160 it's because we think the next hire is an expensive hire.

00:02:05.940 Okay, it's a VP, it's an operations person.

00:02:08.900 Here's right off the bat.

00:02:10.340 If you're thinking of hiring an operations person

00:02:12.580 and you don't have a personal assistant, start there.

00:02:15.620 Like you never hire somebody to operate your business

00:02:18.800 if you don't have an executive assistant

00:02:20.520 taking care of that type of stuff to free up your time.

00:02:22.880 So I'm just gonna give you that quick one,

00:02:24.520 I'm gonna jump into the four key strategies

00:02:27.980 that you need to consider to really understand the mindset,

00:02:31.000 the beliefs and the tactics to buy back your time.

00:02:33.440 Number one, the buyback principle.

00:02:36.020 So the first off, when people ask me,

00:02:37.460 what does that mean, the buyback principle?

00:02:39.120 Here's what it means.

00:02:40.700 It means when entrepreneurs, okay,

00:02:43.860 will not grow into pain.

00:02:46.180 So if there's this threshold of pain, you growing,

00:02:49.520 if it means more pain, you won't do it.

00:02:52.000 How does that show up in your business?

00:02:53.320 Well, it means that you're slow to reply to emails.

00:02:55.520 You don't follow up an introduction

00:02:56.880 to potential partnerships.

00:02:58.220 You don't aggressively go for the close

00:03:01.080 when you have a sales call.

00:03:02.540 You don't build certain features

00:03:05.920 because it's gonna take a lot of time

00:03:07.500 to map out the product roadmap or whatever it is.

00:03:10.360 But essentially it's painful for you to grow.

00:03:12.080 If you sell, you gotta deliver, you gotta activate,

00:03:14.220 you gotta onboard, there's all these things.

00:03:16.200 And what I've discovered is most people, when they do hire,

00:03:19.260 they hire people to just add capacity.

00:03:23.180 They hire a developer, they hire a support person,

00:03:25.520 they hire a frontline worker, whatever, which isn't bad.

00:03:28.400 But the problem is, is that if you do that a lot,

00:03:31.100 eventually, usually around 12 employees,

00:03:33.200 you're gonna get overwhelmed.

00:03:34.400 You're gonna hire a bunch of people to add capacity,

00:03:37.920 but it actually doesn't free up your time.

00:03:40.860 So what you wanna do instead is the buyback principle

00:03:43.340 is 100% focused on shifting the hiring

00:03:45.720 from just hiring for capacity

00:03:47.560 to instead hire for capability.

00:03:50.040 Capability means you freeing up your time

00:03:52.660 to be more capable to invest higher value time of yours

00:03:56.760 into revenue generating activities, okay?

00:03:59.420 So it's to buy back the lower value activities

00:04:02.460 so that you can focus on higher value activities

00:04:05.160 from your calendar.

00:04:07.320 Why is that important?

00:04:08.540 Because just think about this.

00:04:09.440 If you had a calendar and you,

00:04:11.280 or you looked at your calendar,

00:04:12.420 you said, here are all the things I've done last two weeks.

00:04:14.080 And you just highlighted, you know,

00:04:15.700 groups of things, either red, they zap my energy

00:04:18.640 and they, I hate doing this or green, I love doing this.

00:04:21.460 and you looked at it, it could be maybe today, 60% red.

00:04:26.180 Maybe it's only 40% red, but imagine this.

00:04:28.920 What if your calendar was all green?

00:04:31.480 What if you woke up and all the work you worked on,

00:04:34.480 you did was stuff that energized you,

00:04:36.440 added value to your business,

00:04:37.860 generated revenue and high gross margin,

00:04:40.480 profit to your business.

00:04:42.240 You would transform the way you attack the day.

00:04:44.720 You would jump out of bed ready to hit your work.

00:04:47.240 You would be motivated to talk to customers,

00:04:50.200 talk to partners, talk to anybody that could help you scale up

00:04:53.620 because it would mean more of that.

00:04:55.300 And that's the opportunity.

00:04:56.600 That is the buyback principle.

00:04:58.000 And that's the number one thing you need to understand

00:04:59.800 is that we're buying to get time out of your calendar.

00:05:02.760 Number two, calculate your EHR.

00:05:05.240 So your EHR stands for effective hourly rate.

00:05:08.080 Here's a simple equation.

00:05:09.700 If you take your revenue, okay?

00:05:11.260 And you just call it a million dollars, okay?

00:05:13.040 Or even your ambition this year,

00:05:14.560 if you wanna get to a million dollar revenue

00:05:15.980 and you divide it by 2000,

00:05:17.500 which is about the amount of hours

00:05:18.900 that a person's gonna work in a year.

00:05:20.660 That means your hour is worth $500, okay, $500.

00:05:25.840 Well, if you look at like the list of tasks

00:05:29.700 that you're working on throughout a two week period,

00:05:32.580 there's 80% that are low value, okay, the 80-20 rule.

00:05:36.860 And there's 20% that are high value,

00:05:38.880 maybe between two to $500 worth of value.

00:05:41.340 These are things like selling, marketing, partnerships,

00:05:44.920 product development potentially, right?

00:05:47.200 But these are things that only you can do

00:05:49.540 or the things that bring you energy

00:05:51.260 that creates a lot of value for your business.

00:05:53.200 Everything else, this long tail of activities

00:05:56.420 needs to get off your plate.

00:05:57.640 So what I say is that if you can hire somebody

00:05:59.400 for a quarter of that value,

00:06:01.200 meaning that if it's $500 an hour, that's 125.

00:06:04.400 You could pretty much hire anybody.

00:06:05.860 Just even think if you're $1,000 or 100,000 a year,

00:06:08.840 that's $50 an hour.

00:06:10.580 Is there anything you can hire people for $12.50

00:06:14.320 to do that's on this line of long tail activities?

00:06:16.900 The answer is yes.

00:06:17.860 You can hire people through sites like Upwork

00:06:20.440 to buy people, to out-task certain functions.

00:06:23.720 Most people think I need to hire a full-time person.

00:06:25.580 No, you don't.

00:06:26.400 Out-task that work using your effective hourly rate

00:06:29.380 as a gauge, okay?

00:06:31.220 So a quarter of your EHR is where you should be looking

00:06:34.540 for opportunities to invest, to buy back time.

00:06:37.120 Number three, hire multiple hats. 0.99

00:06:39.120 Most people, when they hire,

00:06:40.820 they hire one person to do a thing.

00:06:43.040 I need a designer, all they do is design.

00:06:45.180 I need a Facebook person,

00:06:46.200 all they're gonna do is Facebook.

00:06:47.440 I need a whatever, and all they're gonna do is this.

00:06:49.480 Here's my thing.

00:06:50.320 If you look at your calendar

00:06:51.640 and you see these chunks of work, okay?

00:06:54.000 Maybe there's what you'll discover

00:06:55.880 is there's two buckets of type of work.

00:06:57.720 One's more office and operational.

00:06:59.640 The other one's more marketing type tasks,

00:07:01.320 social media, posting, Facebook.

00:07:03.240 What you wanna do then is say,

00:07:04.560 how can I hire for a role

00:07:06.860 that they'll do those three buckets of things?

00:07:09.820 Because there's value in that.

00:07:11.320 So I think that people forget

00:07:13.080 when we started as entrepreneurs,

00:07:14.080 We wore seven hats, 14 hats, a ton of hats.

00:07:16.500 We wore all the hats.

00:07:17.340 And then what we do is we hire people

00:07:18.800 and we hand a hat over.

00:07:20.000 What I'm saying is hand over three hats.

00:07:23.120 Hire somebody who's gonna lead your marketing

00:07:24.900 and say, here's all the things I do in marketing.

00:07:26.720 One, two, three, four, five, six, seven.

00:07:28.160 You now do this.

00:07:29.300 I know you may not have experience, but I trust you.

00:07:32.380 And there's free courses online

00:07:34.040 and there's YouTube videos.

00:07:34.880 Go check out this guy, Dan Martell.

00:07:36.100 He's pretty smart.

00:07:36.940 He's got a bunch of videos on certain things

00:07:38.540 and just hand it to people.

00:07:40.280 I think people underestimate how capable folks are

00:07:44.180 if you actually empower them and you coach them to success

00:07:47.420 and you just say, these are the outcomes

00:07:49.520 that I'm gonna hold you accountable for,

00:07:50.940 figure it out, let me know if you're stuck

00:07:52.940 and every week we're gonna meet

00:07:53.980 and you're gonna show me where you're at

00:07:55.100 and are you making progress?

00:07:56.360 So that to me is one of the big ideas,

00:07:58.880 the aha moments between the buyback principle

00:08:01.140 is you buy back multiple hats,

00:08:03.900 you give groups of activities to one person and say,

00:08:06.400 hey, you're in charge of invoicing, client activation,

00:08:09.700 and receivables, okay?

00:08:12.780 It might sound crazy, but why?

00:08:14.220 Well, because they're working with the customer

00:08:15.600 to activate them.

00:08:16.440 So they should make sure the invoice got done.

00:08:17.620 And if somebody hasn't paid, ask them about it

00:08:19.760 since they have a relationship with the customer.

00:08:20.940 That's what I'm talking about when I say hire

00:08:22.520 for multiple hats.

00:08:23.460 And number four, build throughput.

00:08:25.820 So my whole thing when I look at scaling companies

00:08:30.440 is I'm trying to drive revenue.

00:08:34.220 I'm trying to create throughput amongst my management team.

00:08:37.800 So for me, it's not even that I buy back my time.

00:08:41.900 If you have leadership,

00:08:43.380 you need to teach them how to buy back their time.

00:08:46.040 If everybody at your organization

00:08:48.600 is understanding this principle

00:08:50.280 and hiring not to add capacity,

00:08:53.060 but to free their time up

00:08:54.920 so they can work in more of their genius,

00:08:57.040 their unique ability, it's a game changer.

00:08:59.960 If you just ask people to hire folks to add capacity

00:09:03.920 and it doesn't free up their time,

00:09:05.220 you're gonna burn them out.

00:09:06.480 They're not gonna stick around with you,

00:09:07.600 especially your A players, your A players.

00:09:09.200 So I have like, I hire executive assistants

00:09:11.160 for all my senior leadership team.

00:09:12.540 Why?

00:09:13.380 Because it's the cheapest amount of labor capital

00:09:15.700 I can deploy to have them free up their time

00:09:18.160 to think strategically, to look like,

00:09:20.840 essentially they're in the forest.

00:09:21.940 They got to look up and look over across the forest

00:09:24.080 and say, where are we going?

00:09:24.980 That's strategic thinking.

00:09:26.560 If they're leading a marketing, a sales team,

00:09:29.020 customer success, they need the space

00:09:31.340 in their calendar to do that.

00:09:32.740 And that doesn't happen if we just keep adding people

00:09:35.620 to fill capacity.

00:09:37.060 We need to increase the capability.

00:09:38.740 We need to increase the throughput,

00:09:40.080 what I call management bandwidth,

00:09:41.700 so that you can scale your company even faster.

00:09:44.660 So quick recap, four strategies to buy back your time

00:09:47.120 to increase your profits.

00:09:48.120 Number one, the buyback principle in essence, okay?

00:09:51.780 Number two, to calculate your EHR and use that to hire.

00:09:55.280 Number three, hire for multiple hats.

00:09:57.260 Number four, build throughputs.

00:10:00.280 As I mentioned at the beginning of this episode,

00:10:01.820 I wanna share with you an exclusive resource.

00:10:03.240 It's called the Next Hire Focuser.

00:10:05.140 It's literally the worksheet that I use

00:10:07.480 when I'm coaching clients through this process

00:10:09.540 for them to understand where are you spending your time?

00:10:12.320 What brings you energy?

00:10:13.540 What's valuable to the business?

00:10:15.220 What are the lists of things that you're doing

00:10:16.800 that you could group together and hire that person

00:10:19.300 to make sure that you have a very clear task list of things

00:10:23.080 when you bring that person in.

00:10:24.220 Here's what you're now owning, hand it over to them.

00:10:27.560 Give them guidance, coaching to success.

00:10:29.440 Click the link below to download your copy

00:10:31.400 of my next hire focuser to make your next hire a success.

00:10:36.300 It will free up your time

00:10:37.580 and add tremendous amounts of profit to your business.

00:10:39.860 I'm really excited for you to deploy that.

00:10:41.280 Let me know in the comments how that works out.

00:10:43.340 If you like this video, be sure to subscribe to my channel,

00:10:45.620 smash that like button and share this

00:10:47.600 with any other entrepreneurs you know are struggling

00:10:49.780 and need to consider redeploying their capital

00:10:52.640 into more effective people time.

00:10:55.640 So share that link with somebody you love.

00:10:57.780 As per usual, I wanna challenge you to live a bigger life

00:11:00.680 and a bigger business, and I'll see you next Monday.

Dan Martell - June 28, 2021

How To Buy Back Your Time & Increase Profit

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