Build a Business that RUNS & GROWS Without You: 14 Lifechanging Tips from BUY BUCK YOUR TIME

0:00 buy back your time by Dan martrell Dan is a Serial entrepreneur with over 25 years of experience he founded scaled and successfully exited three technology companies within 10 years in 2012 he was named Canada's top angel investor if you are a busy and burnt out small business owner who wants to free up time work less and still grow your business this video is for you okay let's get started lesson number one the buyback principle when the business starts taking off most entrepreneurs immediately think about growing even bigger so they create new positions and hire new people this is a mistake according to the buyback

0:46 principle the first thing you need to do is free up your time not grow your business in other words don't hire to grow the business hire to buy back your time on entrepreneurs who don't learn how to buyback their time eventually burn out and crash as the business grows look I know you have a get things done and work hard mentality but you are one person with a finite amount of time you have company family and friends who are all demanding your time most entrepreneurs think that a profitable business comes from hard work that may be true at the beginning but a thriving business only comes when the leader you learns how to buy back their time time Dan says the little known secret to

1:33 reaching the next stage of your business is spending your time on only the tasks that a you excel at B you truly enjoy and C bring the highest revenue to your business likely two or three tasks fit that description I am sure you know the 8020 rule but for entrepreneurs the 955 rule applies in other words 5% of what you do really counts 95% of your current work should be done by somebody else yes 95% this means if you worked for 10 hours today only 30 minutes of it really contributes to the profit of your company what's even worse is when you don't enjoy something you're also not as good at it in other words while you think you're sacrificing for a worthy

2:19 cause by working hard at things that challenge you you're actually costing your company it's a l lose move look no one sets out to become an overstressed workaholic business owner with declining health and relationships but that's what's going to happen if you ignore the buyback principle the buyback principle dictates that you shouldn't be checking emails unless you want to when you're choosing what to do today you should be selecting the highest value tasks you should continually use every resource to buy back your time then fill that time with activities that light you up with energy and make you more money before you probably thought that the more I work the more productive my business will be on the surface this makes sense but then you get trapped in

3:06 the hamster wheel because you are busy working on the low impact task or a high impact task that someone else can do better than you if you don't learn to work less and reinvest your energy into high impact tasks you will feel trapped as the business grows this is because you will come up against what Dan calls the pain line which I will explain in the next lesson lesson number two hitting the pain line the pain line is the point at which growth becomes impossible the more you grow the more pain you experience this work hard no one can do it like me mentality works until it doesn't you can sustain growth only up to a point but then the emails the to-dos the low value tasks you hate doing continue sucking your energy it all creates a wall of pain when you hit

3:54 the wall of pain you will do one of these three things one sell when an entrepreneur is experiencing so much pain in their business they just want out at all costs two sabotage when they hit their pain line they might be making bad decisions that sabotage the company's growth it's a tricky one to see at first here are the kind of stupid decisions they make keep replacing key team players for small mistakes create a new website or just any other decisions that don't help the growth of the company they don't realize they're actually sabotaging their own company three stall if you decide not to grow in other words stall that's equal to a decision to slowly die marketplaces have to evolve because human nature forces them to Susan will always want a faster

4:41 bicycle Kevin will always want a better iPhone even if you're a small business in a local market if you don't evolve your customers will leave for a better option now ask yourself is there anything you do in your business right now that gives you pain pain often provides a choice here you can either continue as usual busy busy busy or use audit transfer fill to start working less and achieve more what is audit transfer fill you might ask that I will explain in the next lesson lesson number three the buyback Loop audit transfer fill a buyback Loop occurs as you continually audit your time to determine the low value tasks that are sucking your energy then you transfer those low

5:27 value tasks to someone who's better at them and enjoys them lastly you fill your time with higher value tasks that light you up and make you more money so audit transfer fill here's how to apply it one audit what tasks do I hate doing that are easy and inexpensive to offer someone else two transfer who do I have on my team or who can I hire even part-time to take these over three fill what tasks should I focus on that I love doing that can immediately bring more money to my company sounds easy right but when you start to implement you will be confused about what kind of work should I let someone else do and what

6:14 kind of work do I need to focus on and that will be answered in the next lesson lesson number four the drip Matrix drip stands for delegation replacement investment and production the drip Matrix allows you to see how valuable a Tas is in terms of money and energy you first need to determine the value of a task and the energy it takes you to do it before you give it to somebody else let's go one by one in detail one delegation delegation is the task that makes you little money and it drains your energy tasks in the delegation quadrant are small tasks that are sucking your energy think about administrative work billing invoicing Etc these tasks should be quickly

6:59 removed from you two replacement tasks in replacement make you money but it drains your energy here you'll find highly important tasks like selling marketing and managing your team these tasks are high value but they might not light you up the way they once did three investment tasks in this quadrant bring you little money now but they have big future potential plus they give you so much energy this might be Network working writing a book speaking at conferences being interviewed on a podcast or going to lunch with peers in your industry this quadrant also includes hobbies and time spent with your family and friends four production tasks here make you lots of money and

7:45 also light you up this is where you want to spend as much time as possible when most of your tasks are in this quadrant you're making lots of money and your energy is high if you only spend your time working on this quadrant you're living in true Freedom the goal of the buyback principle is to help you to spend the majority of your time in the production quadrant with some deposits into the investment quadrant in general you need to remove tasks in your delegation quadrant as quickly as possible while removing tasks in the replacement quadrant takes more time it is definitely possible we will explain this in detail in coming lessons tasks in the production quadrant shouldn't be removed you should be focused here but this is where most people go wrong let

8:31 me explain this with an example imagine you're a baker who loves making cookies at first it's a side Hustle but then it becomes a serious business your business keeps growing you can't handle it alone anymore so you hire a couple of college kids who love baking and then the business keeps growing even more while those college kids are baking you're able to do the ordering run to the store to pick up supplies or throw up some pictures on social media eventually you're not baking at all you're doing payroll ordering supplies and managing customers you have become the administrator of your business and when you think about going to work on Monday you're already dreading it because you're doing everything except what you love about your business which is baking

9:16 that's what a ton of entrepreneurs do hiring is absolutely how you grow but you must hire to save your time otherwise you're putting yourself back into the delegation quadrant remember the buyback principle don't hire to grow your business hire to buy back your time the reason you're hiring is because you want to stay focused on the production quadrant not be stuck in the delegation quadrant like the bakery example now you might be excited to start hiring right away but I know that you are worried about these two things first no one does it right second I can't afford it we'll talk about this in the next lesson which is lesson number five bye buyback rate calculation before we go to buyback rate

10:02 calculation let's go back to your first objection no one does it right yep you're right no one can do it better than you because it's your business so what's the solution lower your expectations don't aim for 100% Perfection instead aim for 80% because 80% done by someone else is 100% freaking awesome you're not not having to work on the weekend is 100% awesome Dan suggests using 10810 rule you do the initial 10% let the other person do the other 80% and you do the final 10% to tidy up the whole process in this case you can be sure that the work is still up to your standard but at

10:48 the same time 80% of the work is being handled by somebody else which could give you more freedom for the things that matter all right let's go to your second objection I can't afford it here here's where the buyback rate calculation will help first you need to know how much you make per hour according to Dan your time is worth how much your business pays you divided by 2,000 hours pays you means all the profits from your current business and 2,000 hours is a normal work year if your company pays you $100,000 a year divide that by 2,000 then you make $50 per hour if your company pays you $224,000 a year that means you make $12 per hour now how

11:34 much can you afford to pay someone else take how much you make per hour and divide that number by four why divide it by four Dan says my rule of thumb is that no one should be performing tasks that they could Outsource for 1/4 25% of their current hourly rate for example let's take Tina a small business owner assume she makes $200,000 a year so how much does she make per hour first divid it by 2,000 hours $200,000 divided by 2,000 equals 100 so her business is paying her $100 per hour now what's her buyback rate take4 or 25% 25% of 100 is $25 per hour so her buyback rate is $25

12:22 per hour if Tina can pay someone else to do a simple task like invoicing video editing or any any other activities for $25 an hour but she's still doing it herself that means she's not fully utilizing her time for higher value activities that could bring in more money from now on there's no task you should be doing that you don't enjoy which costs less than your buyback rate so before you start hiring start with calculating your buyback rate lesson number six the only three trades that matter there are three trades level one is employee level two is entrepreneur level three is Empire Builder let's go one by one level one employee an employee trades their time

13:09 for more money if you're still trading your time for more money even though you own a business that means you're an employee level two entrepreneur an entrepreneur trades their time for more time when you become a real entrepreneur you stop thinking that working more hours means making more money instead you've embraced a better mindset that through delegation and replacement money can buy you more time to spend on building the company this is the essence of the buyback principle level three is Empire Builder an Empire Builder trades their money for more money and here's the deal you'll never become a level three Trader without going through levels one and two first at this level your personal life gets really exciting

13:55 you have ample time for your kids soccer game or sipping espresso so or eating lunch in your garden other people run the day today of your business and you have all the time you want for new Investments and opportunities your head space is clear and your energy is so high now the question is how do we get to level three besides all the things we discussed before one of the important things you need to do is do a time and energy audit I will explain this in the next lesson lesson number seven time and energy audit to understand it better let me tell you a story from the book about Dan's friend Dan asked his friend to hire an assistant so he could stop checking his emails his friend couldn't do it he refused to let go of his emails but then one day he finally let that go

14:43 and the question here is what finally got him to transfer his inbox to an assistant well Dan's friend finally agreed because he started to look at how much energy each task takes not the time a task might take you 10 minutes but it can drain your energy so much that it would negatively impact your whole day and all the other tasks for example for me dealing with accounting tasks takes 1 hour per month but every time I do it I feel like I need a vacation so don't look at your tasks just in terms of time but also how much energy they take protecting your energy and keeping it high is probably the most important thing in life here's how you can do a time and energy audit first audit your

15:29 time for a few days and write the tasks that you're doing every 15 minutes in a table format by the way I always ignored this advice thinking that I don't waste time but oh boy was I wrong I found out that I'm actually quite good at wasting time on low value tasks and then selling a pack to myself as a high value task once you audited your time assign dollar amounts to each task using one to four doll signs one is for lower value tasks and four is for highest value tasks highlight everything in red or green red is for everything that sucked your energy everything that made you want to procrastinate or made you feel anxious green is for everything that gave you energy with a time and energy audit you will have a picture in your hand first delete unnecessary work if you can't

16:15 delete it delegate it to the current team members if no one in the team can do it use your buyback rate to find someone else to do the work lesson number eight the replacement ladder the replacement ladder is a tool Dan made to help you figure out who to hire first in your company and who last think of it like climbing a ladder ladders are Administration delivery Marketing sales and Leadership if you hire according to this ladder you will avoid getting stuck in the replacement quadrant as most entrepreneurs do let's go one by one in detail one Administration this is the basis as we discussed in the previous lesson once we do a time and energy audit the first thing we do is start delegating low value tasks to someone else who enjoys it two delivery delivery is the product

17:03 or service you deliver to the customer if you have a coffee shop it's the cappuccino you're selling if you're a business coach it's your business coaching for many entrepreneurs their company's core product or service is emotionally difficult to Outsource because they're good at it they enjoy every aspect of it if this is the case with you then use the 10810 rule as I have explained before you do the initial 10% that someone else does the 80% then you sail back in and finalize the last 10% marketing is the third step on the ladder after Administration and delivery here's an example to help explain in the first quarter of your business you're doing a great job with marketing you're getting referrals forming new Partnerships and running ads to attract more customers in the second quarter you

17:49 shift your focus to the delivery ladder concentrating on your core product or service because it's hard to let go of then in your third quarter you return to your marketing efforts to reach your goals again this cycle Marketing in the first quarter focusing on delivery in the second marketing again in the third and slowing down in the fourth prevents your business from growing instead you should delegate marketing to someone else so that every month and every quarter new customers keep coming in consistently four sales once you've got the administration the delivery and the marketing people now it's time to onboard the sales people Dan saves this ladder for the second to last because he knows most entrepreneurs are the best salespeople no one in the company can do sales better than you but this doesn't

18:35 mean that you should keep doing it remember 80% done by someone else is 100% awesome five leadership once you get to this leadership ladder you can reach a level of Freedom this is where you hire leaders for delivery marketing and sales that we discussed earlier when you reach this ladder other capable people are running your business it makes money with without your day-to-day involvement now you understand the replacement ladder let's talk about how to hire correctly hiring the wrong person can be extremely costly in terms of time money and energy not to mention the negative impacts of the wrong person on the other team members lesson number nine test first Seth Goen once said I can't work with

19:21 you until I work with you here's Dan's three rules one I give them a project that is represent resentative of the actual work we will do together two I always pay them three I don't give many instructions Dan says notice that I don't give many instructions I want to understand how my potential candidate uses resources and how independently they'll work I'm allowing them to bring their own creativity and I'm also teasing out whether this candidate will save me time by figuring things out on their own or cost me time by stalling and refusing to make their own decisions after hiring here comes the best part how do you train this person so that they can perform the task as well as you or even better I'll cover this in lesson

20:09 number 10 how to clone yourself here are four-step processes to create a how-to manual so that even a new hire can clearly understand and do what you do step one record yourself during the task I like to use Loom since it captures both the screen and my face if your business has nothing to do with laptops for example you own a coffee shop you can have someone take a smartphone record you on how you make the coffee so that next time your staff can make the coffee exactly like you do and here are two important tips about this training video One talking is key if you explain what you're doing and why you're doing it it will help your staff to understand you better explain why you did what you did and what the thought

20:54 process is behind it remember you might be doing this so long that most of the things come to you naturally and automatically so you need to put yourself into The Beginner's shoes and explain everything in detail while you do the task two make three recordings of course every time you're performing a task it changes just a little every time you do it it's probably just slightly different Dan found that three is the magic number if you record yourself three times doing the same task you'll have captured nearly every possible change step two let's go to the next part of creating your howto manual which is jotting down the highle steps here you create a bulleted list of the highlevel steps let's say you're creating the steps for

21:40 the task opening the coffee shop here's how the steps may look turn on the espresso machine start the coffee pot write the coffee of the day on the chalkboard wait 10 minutes turn on the open side notice these steps are not too detailed they simply capture the highle steps involved after you have all the training videos and the highle steps for every task listed out the next thing you need to do is create a section in your howto manual called frequency step three frequency how often should these tasks be completed is it monthly weekly or daily in a simple manual the frequency section may not be necessary because some tasks don't repeat step four the checklist the

22:26 checklist is the highlevel items that must be completed every time having a checklist ensures that all the important steps that need to be done are actually done all of these four steps may take you some time but here's the shortcut just record yourself and then have your staff watch it and recreate the whole process this way you'll know whether they understand it or not lesson number 11 two time hacks when working with others number one the 131 rule to avoid upward delegation we're staff dump their problems to you or leaders dump their problems to the CEO use the 131 rule before staff come to ask for help ask them to prepare one problem that needs to be solved offer three viable

23:12 solutions to that problem and they need to make one suggestion from those Solutions number two definition of done DOD while replacing yourself with staff you might think no one ever does it right or no one can do it better than you to solve this give them the definition of done for example when Dan asked his admin staff to purchase a whiteboard he gave them a DOD which is the task is done when the Whiteboard is hanging on the wall in my office there are four colored markers red green blue and black and there's a dry erase marker handy if you don't give your staff your definition of done they might be doing it according to their own style and you will get frustrated no one does it right because you don't tell them how to make it right just like the way you do it

23:59 next time you ask your staff to do something include a DOD any task like preparing a financial report marketing report or just any other task lesson number 12 transactional management versus transformational Management in transactional management you're micromanaging every decision in transformational leadership you're helping your teammates make better decisions in the long run don't tell people how to do things tell them what to do and let them surprise you with their results as Steve Jobs said it doesn't make sense to hire smart people and tell them what to do we hire smart people so they can tell us what to do with transformational leadership you stop leading by telling someone how to do something and instead tell them what needs to get done so what's the

24:46 difference in instruction for transactional management versus transformational leadership here's an example for transactional management the instruction will be James you need to make more sales calls but for transformational leadership your instruction sounds clearer James you need to hit $100,000 in sales by the end of the quarter how can James get this done well that's up to James when the solution is up to your staff they're more likely to be excited about it and Champion the decision forcing employees to get creative and think of their own Solutions often leads to increased efficiency and better outcomes they begin offering their energy not just their skills they start asking themselves is is there a better way lesson number 13 plan your perfect week

25:34 one be proactive if you don't plan and prioritize you'll end up working on somebody else's priorities two plan around your energy some people notice they have high energy in the early morning you have to plan your task according to your energy if you're best at coding early in the morning then you should organize your time slot where early mornings are blocked for coding three task batching when you batch similar tasks together your able to get in a flow State and get more done four say no often when you design your week ahead of time you'll understand exactly what you must say no to in order to say yes to the things that matter and now let's go to the last lesson which is lesson 14 create a clear 10 times Vision

26:21 in the book Dan reminds us to create a clear 10 time vision for these four elements team one business Empire lifestyle number one team to accomplish your dream visualize who's in your team who will be there in the room with you who will join your team to execute your brilliant ideas two one business some people brag about having two three four businesses but you need to become world class in one area for example Steve Jobs had Apple Bill Gates had Microsoft what is the one thing you want to be known for three Empire after you've imagined that one business then consider your Empire this should come from your core highlevel skills in your production

27:06 quadrant what products do you have are you in multiple Industries are you an investor in some companies and a CEO in others is there a company to connect all these or are they all from multiple interests four lifestyle imagine yourself 10 years into the future of your dream life what are you doing living in Paris multiple vacations who will you be with what hobbies will you have the whole idea in buying back your time is to spend more time doing what you love and also the ones that bring in more money that's how to build your life where you don't need a vacation as Dan says the buyback principle isn't an activity you do once then quit it's a philosophy one that requires you to constantly audit how you're spending your time consider how to transfer

27:53 timeconsuming low value tasks then importantly fill your new time with what lights you up and makes you money if you're watching this video then I assume you have a business I have already summarized several business books for entrepreneurs to improve their personal and business life I will put them as a playlist on the screen if interested check it out thanks a lot for watching and hope this video helped you just a little bit