What’s Your Hourly Worth?

Time is the most precious resource on the planet, but sometimes we don’t treat it that way.  In our businesses, it’s important to get everything done, but we can also get overwhelmed with all the little things that need to be done to take care of customers.  One of the big differences between highly successful entrepreneurs and less successful ones is how they manage their time:  the more successful simply value it more and treat it as the scarce commodity it is.

A great exercise to bring this home is to track what you do in one day.  You can write a diary as you go through the day or simply recall what you did at the end of the day.  List the tasks you did; then write the hourly market rate of each task you did next to the task. 

Did you spend time on low-level tasks such as email cleanup, filing, order-taking, order filling, or handling routine customer questions?  Or did you spend time calling up power partners, dreaming up new products or services, or restyling your marketing message so that it’s more impactful and reaches more customers?     

What was the average hourly rate of the tasks you did today?  Multiply that by 2,000 hours and compare it your gross revenues.  If your gross revenues were higher than the value of the tasks you did today, then your revenue might be stagnant.  If your annualized day was worth more than your gross revenues, then congratulations; you’re moving up and giving yourself a raise.  Your business is likely growing. 

If you’d like a raise, then the first thing to do is to start delegating the lower level tasks that are eating up all your time.  They might be a comfortable way for you to pass the time, but they could also be keeping you stuck, overwhelmed, and moving toward burnout.   

We all have the same amount of time each day.  If we can free up our time to focus on more powerful action items that move our business forward instead of the chores that clog our progress, then our success will accelerate. 

Navigating Nanny Taxes and Household Payroll Compliance

Time is precious for most of us these days, and often, we need help at home so we can have more time to run our businesses or careers.  That may mean hiring help for personal tasks such as care giving for the young, elderly, or special needs family member.  When you first hire a household worker, there’s a whole different set of rules to follow compared to hiring for business.

Underground Payroll

There is a whole industry of “underground” payments made to domestic workers.  Individuals such as housekeepers, regardless if they live with you full time or work once a month, are wrongly paid as contractors, and often in cash, most of the time.  According to the IRS, in court case after court case, these workers should be paid as household employees, even if they are part-time. 

Cracking Down

One of the focus areas for the IRS is this area of household payroll.  The current and strong drive to bring this underground payment system to the light is caused by several new pieces of legislation.  A few states have recently passed a domestic workers bill of rights.  Changes in minimum wage and overtime requirements are going into effect in 2015.  And the health care act requires workers to document their wages before they can qualify for a subsidy, so this can bring more workers asking you to get them fully documented on your books. 

Getting It Right

The need to hire household workers is rising due to the silver tsunami – a term describing the aging of the populous Baby Boomer generation and their growing need for health care, which will truly stretch our system based on their numbers.  

Expert Guidance

When your family makes the decision to hire household workers, seek expert guidance so that you can get through the maze of compliance in this area.  You’ll want to be sure you learn about the risks and compliance issues in this area so that you can properly protect your personal wealth as well as your peace of mind.  And if we can help, please reach out and let us know.