Should Entrepreneurs Invest Time or Money?
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| Photo by Nigel Msipa on Unsplash |
This means that as a start-up and self-employed person you have to invest a lot of time in your own business to be successful.
But when should you invest your time and when should you invest money? I pursue this question in the following and describe my own experiences.
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| Should Entrepreneurs Invest Time or Money? |
Time or Money?
Those who are self-employed are often faced with the decision of whether to invest time in a task themselves or whether to let someone else do it.
So you can write texts for your website or pay someone to do it. Or you can take care of search engine optimization yourself or let someone do it. Money is often spent on many administrative tasks. E.g. for the accounting office.
But there are very different approaches here and it often depends a lot on whether you are a fresh start-up or an established self-employed person.
Founders are Flexible
Entrepreneurs usually have a lot of time but little money. It is therefore not surprising that many founders invest time in their business in the early stages.
It's about building an income in the first place. And since money is scarce, attempts are made to save money in all possible places. It is not entirely wrong to say that you don't have to earn a euro that you don't spend.
That is understandable and it was the same with me. I started from scratch and built up a steady income bit by bit. Of course, it helped a lot that I enjoy my work.
At that time it was unthinkable to spend a lot of money on my business, mainly for financial reasons.
What is Time Worth?
Over the years my independence has developed positively and I have earned more and more. At some point, I was at the point where I earned what I had before in my employee job. That was a great feeling, of course, but it wasn't enough to start spending a lot of money on my independence.
Fortunately, the positive development continued and I was able to increase my income further. That brought me to the point where I was slowly starting to think about having more free time again and gradually appreciating the value of my time.
You should always know your hourly rate or define it for yourself. First and foremost, of course, this makes sense for everyone who accepts customer orders and wants to earn at least a certain hourly rate.
But for successful and happy self-employment, the hourly rate is more than just the basis of the offer. If I can find someone who does a task for 20 euros an hour, while my hour is worth 40 euros to me, then that is a worthwhile opportunity to invest money. In addition, this person often gets the job done faster than I do because they are an expert on it.
So you can let others do many of the tasks that are not part of your core competence and concentrate on the most important, lucrative, and pleasant tasks.
Reinvest
Of course, this is not unlimited, because after all, you want to earn a certain amount per month. But for a certain part of the job that's normal for me today.
In the meantime, I have no problem taking money into my hands and spending it on my business. On the one hand, I spend money to have more time, but of course, I also reinvest money in my business.
That means that I not only try to have more free time but that I also spend money to further develop my business. This is important to have more flexibility and opportunities to invest money later.
So it is a cycle that can work well and ensures that as a self-employed person you have more time and still earn well.
Outsourcing
Paying money to other self-employed or freelancers to do these jobs for you is called outsourcing.
An important lesson in my independence was to realize that I shouldn't do everything myself. In the beginning, it made sense because it saved me time, and learned a lot, but over the years I realized that it was just getting in my way.
After all, you only have a certain amount of time that you can invest and you can't do everything so well. In addition, it is not good for your health if you constantly exploit yourself over time.
As already mentioned, it is important to define the value of your own time and determine for yourself where you want to go. Those who are happy only to work do not have to pay anyone for it. If you want to spend more time with your family, you should look at how you can shovel more time for yourself.
Conclusion
I haven't been able to hear the saying “myself and constantly” for a long time, because in my opinion, it conveys a too one-sided image for founders, which is not worth striving for in the long term.
For me, it has been very important over the years to find a good balance in investing time and money, although I'm not someone who wants to outsource everything. After all, I enjoy my work and I just want to do some things myself because I have precise ideas about the result.
So there is no one-size-fits-all answer and it is different for everyone. That is why you have to find your way and consider whether you want to spend time or money on certain tasks.
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