What is your "notional hourly rate"?

In today's episode of the Agency Accelerator Podcast, I want to talk to you about a concept of your notional hourly rate. And this really will help you think about the tasks that you can delegate. And that segues pretty well into next week's episode where I interview my va, my virtual assistant, Dion Slater, and we talk a lot about how to delegate tasks to assistants such as a va. So I'm sure you're going to find this episode useful. And let's get on with the show. Accelerate your agency's profitable growth with tools, tips, and value added interviews with your host agency owner and coach, Rob DaCosta. So you might be thinking, why on earth is Rob going to talk about hourly rates when he spends lots of his time talking about why we shouldn't sell time to our clients? And absolutely, as many of you know, I'm completely against an agency that sells their time to a client, because fundamentally, clients aren't buying time, they're buying outcomes. And if we sell time to clients, then we end up looking like everybody else. We become very commoditized, we're selling completely the wrong thing, and no doubt we'll end up discounting. But that doesn't mean that we shouldn't measure time internally. In fact, you really I cannot think of an alternative way to, to measure capacity, efficiency, training needs, and profitability if we don't measure time. But when I'm talking about the notional hourly rate, I'm not really talking about time measurement in this way. So today's podcast really isn't about measuring time. It's not about being efficient, it's not about measuring capacity, it's not about measuring profitability. But what it is about is making sure that everybody is focused on their superpower. Now, I use this term quite a lot with your superpower because it's a really succinct way of saying what are the things that you are really good at doing that you can do really well? And perhaps you're the only person in your agency that can do those things. And that's your superpower. And those are the things that you should be doing because they're going to move you and your agency forward and deliver great results for your clients. And so the notional hourly rate is really a simple concept that can have a significant impact in your agency because it helps you focus your time in the smartest, wisest, and most efficient way. So let's just pause for a moment and let me contradict everything I've just said and let me just ask you this question. What do you think a fair price for an hour of your time is? So you're probably a senior person or a leader in your agency. What is an hour of your time worth? I'm not thinking about what you charge your clients or anything at the moment. I'm just thinking, like, in your head, what do you think an hour of your time is worth? So let's say that you conclude that an hour is worth £150 of your time. So that means that every task you do in your day, you should be asking yourself, is this task worth £150 or more, or is it less than £150? And if the answer is, well, actually it's less than £150, then quite simply, you really shouldn't be doing it. And so that means that you need to look at alternative ways of getting that task done, which could be delegating to a team member. It could be outsourcing it to a VA or a freelancer, or it could be automating it through processes and software, or it could be just dropping that task altogether. It truly doesn't move your agency forward. But if you're doing tasks that are less than your notional hourly rate of £150, in this case, it really means that you need to get someone else to do it, outsource it, or stop doing it, or automate it. Those are really the only four choices that you have. And again, you'll have known in the past. I talk about the four Ds, which is ditch it, defer it, delegate it, or do it. And the fifth thing I've added in is automate it. So those are the only choices that you really have. So if you overlay that with your notional hourly rate, then if you're doing a task that is beneath the pound 150 an hour, you really need to not do it. And that means applying one of the 4Ds and outsourcing it or not doing it or automating it. As I just said, now I hear you saying, yes, but, Rob, I can do it better than anybody else, or I can do it quicker than anybody else, or I don't have time to show somebody else how to do it, because by the time I've shown them, I might as well have done it. And you know what, guys? That's a real mindset shift that you have to make if you don't want to be the bottleneck to growth in your agency. And if you want to make sure that you are the person standing at the what's the right term? The front of your ship, navigating the direction of travel. So part of getting this right is having a mindset shift, which is I am doing a task that is lower than my notional hourly rate. Therefore I need to find a way of not doing that task. And if that means I have to invest time, slowing down to speed up, to show someone how to do this task, to train someone, or to find someone I can outsource it to, then that is time well invested. Because in the long run it it will free up your time to focus on the things that only you can do. The super power activities that you know you are best placed to do, not those tasks that you can do because you can do it faster than somebody else or you believe from an ego perspective that you can do it better. Remember, the question you should never be asking is not will someone else do it as well as me? But will someone do it well enough so that the client is happy, so that we deliver on time or whatever. So that is a real mindset shift that we all have to make. Now a lot of my clients start their agency because ultimately they, ultimately they aspire to build a self running agency. And what I mean by that is not one that you don't have to be involved with, but is one that will pretty much run itself from a kind of client delivery, day to day perspective, freeing your time up to focus on the things that you are best placed to do. Those superpowers events which often look like creating direction and strategy for the agency, focusing on the future, focusing on product development and so on, not serving the clients. So if you don't want to be the bottleneck to growth, then you need to make sure that you're delegating. And if you use this concept of a notional hourly rate and just quickly check in with yourself, is this task I'm doing higher or equal to the hourly rate, in which case I should be doing it, or is it lower than my hourly rate, in which case I need to find a way of not doing it. And that means delegating or ditching it or automating it. So if you ever do want to create the self running agency, that's an agency that is going to free up a lot of your time to focus on the things that you really enjoy doing that you're best placed to doing, then you have to start using this notional hourly rate. Now if you're listening to this and you're a one man band, then make sure you tune into Next week's episode where I talk to my va. Because there are always ways of outsourcing those tasks, especially those admin tasks such as invoicing and setting up meetings and confirming client meetings and doing credit control and chasing up payments and all that kind of stuff that are absolutely necessary to the kind of smooth running profitability of your agency, but can be real time suckers. So those are the things that we should absolutely be outsourcing. And there's a whole list of other things. In fact, what I encourage you to do is grab two sheets of paper and just start thinking about your typical day or your typical week or your typical month and list down those activities that you think are at or higher than your notional hourly rate on one sheet of paper. Those are the things you should be doing. And list out all those other tasks that are lower than your notional hourly rate. Those are the things you shouldn't be doing. And once you've made that list, you'll probably surprise yourself at how much there is on that second page. You then need to start thinking about, okay, how can I outsource these and who should I outsource them to? Should it be a va? Should it be another employee? Should it be an assistant that you hire? Should it be a bookkeeper? There's a hundred ways of solving that delegation problem that don't just entail you taking on an expensive member of your team that you probably feel you can't afford at the moment. But there are many alternative ways of doing that. And don't forget, technology is your friend here because there is a lot of software that will help you automate things. A really good example of that is that I use Xero as my accounting software and I use a kind of add on tool called Receipt bank where I can quite simply email a receipt to Receipt bank or I can take a picture of it and submit it and by some kind of magic it gets read and put into my into Xero. So that just saves me a lot of time. Another example of automation is where I've used some LinkedIn automation tools to do some of the outreach activities that are quite time consuming but actually can be automated once I've worked out who I want to connect with. That's a couple of examples of where I've used automation to delegate some of those lower than my notional hourly rate activities, freeing my time up to do the things that I'm really good at doing. You have to remember this. I think Michael Hyatt said this. Every time you say yes to something, you're saying no to something else. Now, he uses the context for that of like agreeing to go to a meeting in the evening, in which case it means he can't spend time with his family. But when you say yes to doing a task that is below your notional hourly rate, you're potentially saying no to doing a task that is at or higher than your notional hourly rate. And of course, that means you're not going to be as productive as you could be. And ultimately it means you're not going to move your agency forward as fast as you would hope. So this is a really simple concept that can have a really significant impact on your business. And I would really encourage you just to sit down for a moment and think about what an hour of your time is worth and then just start checking in with yourself every day when you do those tasks and maybe keep a list and see which tasks fit above or at that hourly rate or below. And it'd be great to hear from you. I'd love to hear any experiences, any challenges you have around this, but it is a really good strategy that helps you just check in with yourself. Am I focusing on the things that only I can do that's my superpower tasks, or am I doing things that I think I can do better than someone else or quicker than someone else, but they are actually because I'm saying yes to them, I'm saying no to something else. So that's it, really. That's a short and quick podcast this week, but I think hopefully the message is really clear. It's something I use myself that helps me be really as efficient as possible with my time. And you can overlay this on all sorts of other things, such as working out when you're most productive and doing those hard things, how you schedule your day and your week and so on. And I talked about some of those things before, but today I just wanted to focus on this notional hourly rate. So what's your notional hourly rate? And are you making sure that you're constantly focused on doing tasks that are at or higher than that? I'll leave you with that thought and have a great week. And I will see you next week where I am interviewing my va, Dion Slater, and we'll be talking about delegating lots of admin and other tasks to a va, and that's one example of how we can delegate. Till then, have a great week and I'll see you next week.