This week I learned an expensive lesson in opportunity cost. As someone who runs a technology consulting practice I am very familiar with timesheets and the need to accurately bill customers. I spend a significant amount of time doing business development, which means a reduction in my available billable time, but I carefully balance that against potential future income.
This week I lost billable time to the following:
1. Dead computer
2. Cold
3. Favours
Firstly I was the victim of a failed motherboard on my Dell XPS M1330 laptop. As a disaster recovery consultant I am happy to report that I didn't lose any data, but I lost access to my primary computer (with all my developer tools loaded) which slowed me down and resulted in a number of clients shouting at me for missing some deadlines.
Secondly, as if my week couldn't hand me more challenges, I came down with a cold, which slowed me down even further.
Finally, while I love helping people be it with their website, charitable causes or fixing their home computer or network, these favours cost me time, which cost me money.
This got me thinking, I keep a timesheet for all my business time, what if everyone kept a timesheet and compensated each other for business, favours, waiting for a laptop repair or wasting your time on the phone telling you their opinion on politics. Time is money, so why don't we track it.
So this week here are the businesses that owe me money:
Dell Inc.
I called you on Saturday to report a motherboard problem. It wasn't until I called you on Thursday to ask where my in-warranty replacement part was that you actually did something. Including the time I spent on the phone, you wasted about 7 hours of my time. So at my billable rate, you owe me $1,050.
American Airlines
While trying to book my vacation tickets, there was a problem with
www.aa.com which booked my flights, but then were cancelled and prevented me from rebooking. So I spent about 2 hours sorting it out. AA, you owe me $300
I'm not going touch on the various favours I'm asked to do by business associates, but in a nut shell you owe me $750.
So a grand total of $2,100 opportunity cost this week.
On the bright side, one of my best business partners understands this concept just as well as I do and he tracks favours in his billing system. We trade hours at cost to each oher, which works great! :)