Once we are on a monthly wage, it becomes difficult to visualise the value of time.
This is easier to see if everyone in the organisation were on an hourly rate instead of a salary. A good approach to adopt is to put a value on everyone’s time to easily see how productive everyone is compared to their cost.

Accountants and Lawyers are used to valuing their time as a charge rate and this type of decision making is easier for them to visualise as you can say “It will cost you a £500 but will save you £2,000 in chargeable time”. This highlights invisible costs or benefits, and introduces the concept of “Opportunity cost”

What this means:-

  • There is an invisible benefit of £1,500 you might miss
  • Opportunity Cost: Your time is worth £2,000, don’t waste it on low rate work
  • It helps you focus on which tasks are worth doing yourself Vs what to delegate or outsource

Opportunity Cost

Everyone should be familiar with this powerful and valuable concept. It is invaluable when making choices, whether business or personal.
Here's a quick definition:-

"The loss of other alternatives when one alternative is chosen"