How much is your time worth?

When was the last time you actually worked out your true value to your company? I'm not talking about the fact that you make the best cup of tea or always bring in cakes on your birthday (it was mine on Tuesday, and I brought in loads of cake) - I'm talking about your value in pounds and pence.

A lot of people have no idea what they're worth so let me see if I can help. It's easiest for sales people to work this out so we'll use them as an example. Write down your annual target. Now divide that by 12. Now divide that figure by 4 and then divide that new figure by 40. What you have there is your hourly rate. If you started your own business tomorrow and charged by the hour - that's what you would charge.

How did that figure make you feel? Mine actually makes me feel pretty good. In my best year I was worth over £350 per hour. Now don't get me wrong - I personally didn't earn that much. If I did, I'm pretty sure this blog would not exist, well it probably would, but it would just be pictures of me flying my helicopter (at least now you know what I want for Christmas).

OK, so let's take a more modest figure of £250 per hour - that's what your time is worth to both you and your company. With that in mind, let's go shopping for some merchandise shall we? (Oh come on, it'll be fun, and if you behave I'll get you an ice cream).

So you're after some pens and you've got in your first quote and it seems pretty good. The total price is £1500. You're happy, but you think it's probably a good idea to go and get a few more quotes. So you start trawling through all of the catalogues that you kept on a shelf (people actually do that? I just thought you were all being polite. We just figured you put them straight in the bin, so thanks to those of you who don't) and you call up two more companies to ask them for a quote.

There's good news - the second quote comes in at the same price as the first one but then the third quote comes in and their total price is £1400. SCORE! Do you then order from the third company? Of course not! That would be sheer lunacy! No - you phone back the first and second company and tell them that you've had a better quote. They then go away and come back and beat the figure and after all of this back and forth, you've got the total price down to £1350 and you then place your order.

Well done! The whole process took two hours and therefore effectively cost you £500, and all so that you could save.....wait for it.....wait longer.....yup, you got it - £150. Fantastic!

The moral of the story? There's nothing wrong with shopping around, but do you know I've actually been having conversations with people who need me to take my prices down by pennies? They're looking at spending over £10,000 on marketing but they're negotiating over that last £40. Are times really so tight that we need to waste hundreds of hours and thousands of pounds to try and "save" money?

So by all means shop, but if you find yourself in a good relationship with your supplier then stick with it. Unless they're not me, in which case we really do need to talk. You didn't go with them because they were cheapest - they had something more and you believed it was worth paying for, and unless they really have let go of their enthusiasm, that quality is still there.

Now for those of you who do find yourself with a spare £10 - I have just been awarded a place in the 2009 Flora London Marathon. I'm running on behalf of Tommy's -The Baby Charity, and I need to raise £2500 for them. Please go to www.justgiving.com/pjrose and sponsor me as much as you can.

Have a good week in business, and let's see if we can all get our hourly rates up to truly offensive levels.