Part of running a successful small business is effective utilization of the most precious of commodities: time. Before deciding to run a company, you should be well-equipped with good time management skills to promote the success and health of a new venture. There are multiple ways to approach the quandary of time management.
Pareto analysis refers to what is commonly called the 80/20 rule. The idea behind Pareto analysis is that 80% of outputs derive from 20% of inputs. To help key decision-makers, Pareto analysis urges prioritization of more important activities that have significant effects on a given project. In terms of revenue, the 80/20 rule would show that a significant portion of a company’s bottom line is driven by a short list of clients; likewise, a significant portion of revenue may be created by only a few of the company’s available products.
It is a valuable insight to be able to identify which internal processes of the company are the most efficient or value-producing. Pareto analysis encourages you to be aware of those valuable processes and to spend less time on the less substantial practices.
Pareto analysis reminds you to focus on the most revenue-producing facets of the company. The rule is concerned with optimizing efficiency in effort; in terms of time efficiency, learn how to differentiate the revenue-producing tasks from the non-revenue producing tasks. When choosing between multiple activities that could produce revenue, choose those tasks that will produce the most revenue for a given amount of time. Pareto analysis makes literal sense out of the phrase "time is money."
The ABC method places activities into three simple categories of importance. The A activities are the most critical processes relevant to the business. The B activities are classified as being of average importance, and the C activities are the least important to the maintenance of the business. You can use the ABC method in conjunction with Pareto analysis to underscore the importance of giving additional time to the more efficient or revenue-producing aspects of the company.
The ABC method is commonly used as a means of tracking inventory, with items that carry the A label being counted more often than items in the B and C categories. The loss of items in the A category causes more damage to the business than the loss of items in the B and C categories; if A items have low inventory counts, then you need to place more importance on restocking these key items.
Use ABC analysis with activities that you need to complete periodically to maintain the business, such as analyzing revenue data, assessing current employees or going to networking conferences. You know that you should complete certain activities more often than others.
The Eisenhower method is named after the productive President Dwight Eisenhower. It categorizes activities into four groups. You consider two questions when choosing the next course of action: "is it urgent?" and "Is it important?" The amount of time you spend doing each of these activities follows from least to most: not urgent and not important, urgent and not important, urgent and important, and not urgent and important.
This method is a useful tool because it forces you to consider whether a given activity, such as listening intently to a sales presentation, is urgent or important, and discourages engagement in tasks that are neither important nor urgent. The Eisenhower method allows you to step away from thinking about key business functions in terms of revenue. While the most time will be spent on tasks that are important but not urgent, you will do tasks that are urgent and important first.
Business owners have varying ideas on what is urgent and what is not urgent. For some, calming a disgruntled client will be a top priority for others, learning about a new method of marketing that competitors haven't tried yet will be an urgent task. Re-evaluating priorities and what is considered to be urgent and important is a necessary part of successful time management.
"POSEC" is an acronym for "Prioritize, Organize, Streamline, Economize, Contribution." The system encourages you to go through the motions of each of the verbs in order to make for better time management.
"Prioritize" refers to ordering activities in line with company goals. "Organize" refers to synchronizing those activities as they relate to one another. "Streamline" refers to setting up systems that allow you to complete tasks in a more time-efficient manner. "Economize" refers to carrying out organizational plans in a more cost-effective manner. "Contribution" refers to concentrating on potential long-term benefits gleaned from implementing certain procedures.
Pickle Jar Theory
The jar is your time. If the jar is first filled with the important, significant time-consuming tasks, it can later be filled with smaller pebbles, and then sand to fill entirely all of the cracks. If the jar is first filled with the sand – those time wasters that have little importance to the company's bottom line or to the sale of products and services – there will be no time left for either the pebbles or the important rocks.
The pickle jar theory suggests that the easier a task is to do – or in the analogy, pour into the pickle jar – the less positive impact it may have on a company’s development and future. Likewise, the insignificant tasks, or the grains of sand, are easy to put into the jar, and they also have the least overall effect on the company's bottom line.
It may be much more valuable to take on the most difficult and significant tasks first; these are the major events, the victories. Otherwise, should all of the available time be wasted on placing grains of sand into the jar, there will be no more time left, or no more space in the jar. The small tasks are attractive; they are easy, and when piled into a list, they may seem significant. A pile of sand compared to a pebble or a rock, however, has little significance. Be proud of the small and medium-sized victories, but strive toward completing your major goals.