Ep131: The Leverage Audit: How I Find 20 Hours a Week in Any Business

What's going on everyone? Matt here from The Leveraged CEO, episode 131. We're going to go through the leverage audit today. So everyone talks about like, you know, you should be working on the business, not in it, blah blah blah, but they don't actually show you how to actually do that. So I'm going to show you my philosophy in terms of how we do this with our clients, how I've been able to do it with the last two businesses that I've had. To get my time back. So I'm going to go through how to actually do it, but then I might actually share my screen and show you a little bit of the behind the scenes. And if you guys want to actually do this for yourself, then you can just send me a message on Instagram and I can send you through the template and the training. This is the first step that we do with all of our clients that work with us that want their time back. So let's go through what it actually is. Actually, before we get into that, quick little update from me. I bought a Tesla. Super, super pumped. Finally, I've test-driven a Tesla like 4 or 5 times now. Finally bought one. Just finally got on board. So we're actually going down to one car. So we ordered it on a couple of days ago now. So in about 3 or 4 episodes, I'll have the Tesla. So I'm super pumped. I love Tesla. I love Elon. Love Elon. Love the car. And we're actually literally just deciding on getting personalized plates. And Jess was saying that the license plate's gonna say 'buy' because the Teslas are quite fast. But Anyway, let's get into the leverage audit. So what you're going to do, it's basically, it's an honest inventory of what every hour of your, or basically whatever, whatever thing happens, what happens every like 15 minutes of your day. So what I essentially get you to do, and I actually might share my screen with this just so it's a bit easier to explain to people. So hopefully, if you're not watching, then I suggest if you can try and watch, but you can listen through as well. So how it works is you're going to log everything, then you're going to analyze, and then you're going to act on everything. So you're going to log everything for at least 1 week, but ideally 2 weeks. Every 15 minutes, you're going to put in what task you did or what you're working on in that 15-minute window. Block. So you're going to put it into a category, then you're going to do, uh, how it makes you feel— if it gives you energy, if it's neutral, or if it's draining. Um, then once you've done that, um, and I'll show you what that looks like in a second, then we're going to go to the task analysis tab. So every recurring task, you're going to put it into the task analysis tab, and you're going to match it up to your buyback rate. So shout out to Dan Martell with the book Buy Back Your Time. I got this principle from him. I've just changed it a little bit. But what he essentially says is you need to work out your buyback rate, which we'll go through in a second. So first you need to put in your annual income or your target income. So this is your salary that you take from the business plus the profit. So if you pay yourself $100K and you make $100K profit, your annual income is actually $200K. Now the average person will take 2 weeks off per year and they'll work about 40 hours a week, which means you work about 2,000 hours per year. If you guys do more than that, you can put that in. If you do less than that, you can put that in. But essentially, if you make $200,000 a year in total and you work 2,000 hours a year, your effective hourly rate is $100 an hour. So the buyback rate essentially means that if you can outsource the task for under 25% of what your effective hourly rate is, then it is worth doing so because then you can spend more time doing the tasks that actually make you, you know, that $100+ an hour rate, i.e., like sales, i.e., marketing, content creation, all that type of stuff. So in this specific example, the buyback rate is $25 an hour. Okay, because my effective hourly rate is $100. Now if we go to the time log, uh, you can see in here I've just put an example answering client emails. The category is admin and the energy is draining. So you can obviously, as you can see in the example here, I've got from like 7 AM to 7 PM and you're basically going to have a recurring alarm every 15 minutes and you're going to put in exactly what you're doing in that 15-minute block, no matter if it's personal, no matter if it's um, you know, stuff with the kids, no matter if it's admin or sales or whatever. You can see in the category I've got sales, marketing, delivery, finance, operations, team, etc. And then under energy, we've got energy— energizing, neutral, or draining. So once we've done that, we're going to go into task analysis, and I've got some examples on the screen here. So answering client emails, bookkeeping, invoicing, sales calls, posting on social media. I've got the category, I've got how many hours a week. So you get the hours per week once you've done, once you've done the time log. Okay, then you rate the energy if it's draining, if it's energizing or neutral. Then you've got the value or the, or the, is it below the rate or is it above the rate? So meaning, um, it, it, can you outsource this for the below your buyback rate, which in my case right now is $25 an hour. And then in my, in my spreadsheet that I made, I've actually given you a suggested action whether you systemize it, whether you keep it yourself, whether you hand it off, or whether you stop doing it completely. Okay, so for example, if you really love doing it or if it's getting you a very good return on investment, like sales calls for example, you would keep doing it. If it's something like, uh, invoicing or bookkeeping, something that you don't really enjoy and it's taking a lot of time then you can hand it off if you've got a system. If you don't have a system, you would systemize it and then hand it off. Or if it's something that's completely pointless, like maybe you take a meeting that's completely pointless for you to do it, or maybe you take a Q&A call where you've got a client success coach that can do it, you can just stop doing it. Well, that'll essentially be like handoff as well, to be honest. But yeah, maybe you've got some type of process that you, that you do that you could, you know, fully automate, for example, so you could stop doing it altogether. So you could put that even into an automation category. So once you've done that, on the last tab, it tells you how many hours you could get back each week, and then it gives you the 4 categories. So things that you'll stop, things that you'll hand off, things that you'll systemize first, and things that you'll keep. So this little spreadsheet here is literally the first thing that we do with all of our clients that start with us to get their time back. Now just, just think about the reason why we do this is because we have all the— can we get all the data? Once we have all the data, we can make really good decisions on what we should automate, uh, you know, delegate, delete, etc. And then we can, you know, work out, yeah, hey, okay, cool. So now that we've got all these things that we're doing, now we can be like, okay, cool, now we can get a VA to do 10 hours a week of blah, blah, blah. Now all I've got to do is spend a couple of hours systemizing this and then I can, you know, hire XYZ person. This is how you start to get back your time. And this is what we do. It takes probably like 2 to 3 months for most of my clients to be able to get their time back. And then we start helping them with, you know, increasing their revenue, making better decisions, decisions with margins and profitability and that type of stuff. And you know, for a lot of people that work with us like long term, they have a— it turns into a really good business. Shout out to my cat there, just laid on the bed. So if you guys want a copy of this, this is literally the first thing that you guys would do if you were to work with me. So if you guys are on the fence about working with me, then just send me the word audit on Facebook or Instagram, and I'll send you guys through the Leverage audit, all the training, and the template for you guys to fill in yourself. But once you've obviously done the audit, you obviously want to decide what stuff needs to go in what category, and then you'll be able to make really good decisions on what to remove from there. Why is this important? Most people, what happens is they'll try and they'll be very reactive and they'll be like, oh yeah, what could I automate? I was speaking to someone earlier today. I'm just not sure what I can automate. So this is exactly why you need to do this process first. Get everything out of your head and be like, okay, cool, I'm actually spending so much more time on this when I thought it was this. Or yes, I'm spending time on this, but it's actually given me a really good return on investment and I actually really enjoy it, so I'm not going to touch that. I'm going to get rid of the stuff that drains my energy so I can just focus on stuff that I enjoy. And guess how much happier you're going to be? You're going to be way more fulfilled in the business. You're going to show up better for your, you know, friends, family, kids, etc. as well. So I think it's a really massive opportunity for a lot of people because some people just do it the wrong way. So if you guys need help with this, this is what we're, what we're doing now. So send us a message and I will see you in next week's episode. Bye for now.