Money Smart: Time Management Recap
You’ve heard about the importance of time management, but have you considered applying those concepts to your small business? In our September Money Smart class, we explained the concept of time management and why it’s important to a small business and covered common practices. Let’s recap!
Time management is best defined as systematically prioritizing tasks and competing demands to complete the most important tasks within a target timeframe. Time management aims to reduce distractions, lowering the number of tasks a business owner completes. So, why should you prioritize time management?
- Poor time management can cost you money.
- Maximize the number of hours in your workday.
- Work smarter, not harder, within the time constraints of a workday.
- Maximize what can be accomplished in a workday.
- Maximize the use of the limited resources.
- Identify critical areas that need special attention.
- Identify and delegate tasks to employees.
Proper time management will allow you to be more focused on critical tasks, be more organized, have less stress, and have more time for your life outside your business.
The five key elements of a time management plan are:
- Clearly defined written goals. When writing your goals, identify each of them as a short-term (quarterly), mid-term (12 months), or long-term (two to five years) goal.
- Detailed list of tasks. Break down each goal into a set of clearly defined tasks that need to be completed to accomplish the goal.
- Prioritization of the tasks. Always try to complete the most essential tasks first because these tasks will usually have the most significant impact on your goals and, by extension, your bottom line.
- List of important ongoing business functions. A complete list of key components of your business operations may not be attached to a goal but needs to be included in your time management plan. These include tasks you might need to perform daily, weekly, or monthly.
- Built-in flexibility. By assigning the estimated time needed to complete each prioritized task, you can plan your day so that the most important tasks are always completed promptly. You do not have to schedule tasks during every hour of every day. Leave plenty of unscheduled time each day.
Common methods to help you prioritize your tasks include:
- Pareto Analysis: The Pareto principle, based on which Pareto analysis is often referred to as the “80/20 rule,” states that 20 percent of a person’s effort will produce 80 percent of the result. Use Pareto analysis to prioritize your time on tasks that produce the best overall result. Small business owners need to understand the Pareto principle because they are usually juggling many priorities.
- ABC Method: The ABC method ranks each task with the letter A, B, or C. The most essential duties on your list are given the letter A, less important tasks the letter B, and the least important tasks the letter C, and so on. Then, you’ll assign any subtasks for each task you’ve already assigned an A, B, or C, further broken down by number (1, 2, and 3). So, a task identified as A-1 is completed before task A-2, which is completed before task B-1, and so on through all the tasks.
- Eisenhower Method: The Eisenhower method may work well for small business owners who are already highly organized planners because the method doesn’t prioritize tasks to the level of detail as Pareto analysis or the ABC Method. To use the Eisenhower method, take the tasks created from your goals, along with your ongoing business operational needs, and sort them into four categories:
- Urgent and important – do these tasks immediately.
- Important but not urgent – put these tasks on your calendar for later.
- Urgent but not important – delegate these tasks to someone or assign the tasks to the lowest priority.
- Not important and not urgent—these tasks may never get done because tasks in the other three categories will take priority.
- POSEC Method: The Prioritize by Organizing, Streamlining, Economizing, and Contributing (POSEC) method assumes that to accomplish a goal, attention must be focused on daily responsibilities. Starting with “prioritize,” you move through each component of the POSEC method. The details of the POSEC method of time management are:
- Prioritize – arrange your tasks in order of importance based on your goals and available time.
- Organize – provide a structure for your most basic tasks, especially those performed daily.
- Streamline – simplify “nuisance” tasks, such as those required for operations but are your least preferred tasks.
- Economize – achieve those things you would like to do but fall low on your list of priorities.
- Contribute – occurs when tasks are completed, and you can “give back” to society or those who need your help.
Once you have a list of prioritized tasks, you are ready to create a daily time management plan. Each day, you’ll be working toward accomplishing your goals. The insights gained from our Money Smart for Small Business classes will empower you with the skills and knowledge to manage your small business effectively. If you want to talk to us about past classes, you can reach out to your Banker! Or, if you would like to sign up for future classes, you can register here: https://www.coastalbank.com/money-smart/.