The average entrepreneur spends 68.1% of the time working “in” their business—tackling day-to-day tasks, putting out fires, etc.—and only 31.9% of the time working “on” their business—i.e. long-term goals, strategic planning—according to new research from The Alternative Board (TAB). The firm’s latest Business Pulse Survey shows the majority of business owners (63%) are working more than 50 hours a week, but the average entrepreneur only wants to work 41.7. So what’s to blame for the discrepancy? According to the results, it’s ineffective time management.
The survey shows that 40% of business owners admit to either having an ineffective annual operating plan/budget or none at all. “A strategic plan helps manage your time by focusing your goals and eliminating distractions” says TAB VP David Scarola, in a news release. “Without one, business owners are more likely to waste time on urgent, but unimportant tasks.”
The numbers agree with Scarola. As 73% of business owners would prefer to work on their business, it’s important to eliminate unnecessary distractions. Distractions come in many forms, the most common being emails. In fact, 33% of entrepreneurs agree email is the biggest time strain on their business. “The key to cutting time spent on emails is not to read them more than once,” said Scarola. “Don’t open an email until you’re ready to act on its contents.”
The second most frequent time waster was administrative tasks (24%). If business owners want to achieve the 41.7 hour-per-week lifestyle they strive for, they need to start delegating duties that fall below their pay grade.
“Whether your personal vision of success includes increased profits, a wider sphere of influence, or simply more time with family and friends, better time management will help you reach your goals,” Scarola added.
Key insights from the survey:
Business Owners are consistently working more than they think they should. They average 49.4 hours of work per week but they think they should be working 41.7. In fact, 63% of owners work more than 50 hours per week.
Business owners are also spending significantly more time than they think they should working IN the business rather than ON the business. Working ON the business involves more strategic activities that lead to growth, improved profitability and increase morale. Owners spend 32% of their time working ON the business but 73% prefer spending their time on these strategic types of activities.
Owners suffer from the tyranny of the urgent. They only spend 34% of their time on activities that are both important and urgent. These are the activities that owners should be spending the majority of their time on.
In terms of which specific activities owners spend time on, 32% of their time is spent on email/web browsing. This compares to 25% being spent interacting with employees and 21% interacting with customers.
- When we asked owners which areas they are wasting or losing most time on, they responded with emails and administrative tasks.
- They are most frustrated wasting time on unscheduled communications (33%), waiting for information (22%) and personality issues (16%).
The survey asked owners what areas they could improve on in order to gain more productive time. These were asked on a scale of 1 to 10 (most important). The following are the percentage of respondents that rated that item an 8 or above.
- Spend more time completing truly urgent tasks: 77%
- Hold employees accountable to actual results: 68%
- Spend more time improving my skills as a business owner: 59%
- Delegate administrative tasks: 56%
- Stop working below my pay grade: 44%
- Prevent employees from “upward delegating” tasks to me: 41%
- Spend more time away from the business: 41%
They also believe they would be more productive by:
- Having fewer distractions: 45%
- Establishing monthly/weekly/daily tasks and deadlines: 28%
- Operating from a formal strategic plan: 19%
If they could implement some of those changes to free up more productive time, business owners would spend it in the following areas:
- Marketing/PR/Sales: 32%
- Strategic Planning: 24%
- Product/Service Development: 15%
- Strategic Partnerships: 11%
In terms of value add, if owners were able to work more strategically on the business, they rated the following areas as having the greatest benefit:
- Creating New Opportunities: 33%
- Growing Revenue: 31%
- Achieving Better Work/Life Balance and Personal Growth: 17%
Source: The Alternative Board; edited by Richard Carufel