Building on last week's conversation about Parkinson's Law, today Matt and Garrett take a look at PIE Time and what your time is really worth as a Ninja. Garrett reviews the history of PIE Time and how it came about. For those who may be unfamiliar with PIE Time, P = Productive Time (time that you'll actually get paid for - you, a customer, a contract); I = Indirectly Productive Time (FLOW time; Ninja Nine time – generates P time); and E = Everything Else Time.
Our hosts break down each component of PIE Time, and give detailed examples of each. They review why no time is created equal, with Indirectly Productive "I" Time being the most important piece in terms of generating income. And although Everything Else "E" Time is sometimes referred to as "Non-Productive Time," Matt and Garrett explain that this is still a crucial slice of the "PIE," as it can indirectly help with your overall attitude and work ethic. They talk about goals for your I to P Time ratio, wherein for every two "I" hours you spend, you will be rewarded with one "P" hour at peak performance. You'll hear about "P" or "Paid" Time (showing property, going on listing appointments, writing and negotiating initial contracts), which is the easiest time to measure and is the basis for determining your worth per hour.
Matt and Garrett also discuss the three most important things you can do to increase your dollar per hour amount, the wide range of hourly rates they've seen in coaching, and finally, they dive into the numbers with great enthusiasm to illustrate exactly how knowing your worth can help you analyze your business, run it more efficiently, and make the best decisions possible for how and where to spend your valuable time.
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Episode Highlights:
- Today's episode looks at what your time is really worth
- Time is a non-renewable resource
- Matt and Garrett dive into PIE Time - what it is and how it came about
- P = Productive Time (time that you'll actually get paid for - you, a customer, a contract)
- I = Indirectly Productive Time (FLOW time; Ninja Nine activities – generates P time)
- E = Everything else time
- It was initially called "PIN Time" - the name has since evolved, but it's the exact same (the "N" stood for Non-Productive Time, but this had a somewhat negative connotation)
- Garrett feels that the label "Non-Productive Time" actually motivates people to become more efficient so they can move out of "Non-Productive" mode
- For the purposes of this podcast, E Time = Non-Productive Time - but it is not necessarily negative
- Some of your best time spent will be on E Time activities - it may not directly produce another transaction, but it's a valuable part of your role
- Example of big businesses having a risk management department - it does not generate revenue, but it protects the bottom line and helps the company run better, which produces more business
- Many E Time activities are something that an assistant can help you with
- I Time is where you will directly grow your business - it's the most important time you can use
- The Ninja Nine are largely comprised of I Time
- If you are spending an inordinate amount of time on E Activities (e.g., a 3-hour closing), this is an opportunity to look at how you can better manage your systems to avoid this happening again
- Morning affirmations are an excellent example of E Time activities that do not directly bring about business, but are still important and worthwhile
- I Time is the one you absolutely want to put on your calendar, and you have complete control over
- Examples of I Time: Lunches with clients, Hour of Power, customer service calls - but they need to be spent connecting and asking FORD (Family, Occupation, Recreation, Dreams) questions
- Deals with still go through if you don't do customer service calls, but you may not get any referrals out of them
- Not all time is created equal
- The truth will come out in your I:P Ratio
- Distinction between I Time and just living your life, seeing friends - sometimes your life is I Time
- You don't have to track your I:P Ratio, but if you're so inclined, for every "I" hour that you spend, you will be rewarded with a certain number of "P" hours - an ideal goal would be two "I" hours to one "P" hour, or even a 1:1 ratio
- Paid hours - "P" Time is where you can really have some power over your business (showing property, going on listing appointments, writing and negotiating initial contracts)
- These are also easiest to track and it's where we want to measure our value
- Take your total income and divide it just by your P hours to determine your worth per hour
- Knowing your dollar per hour can help you decide who to spend your P hours with (e.g., shuttling people around to look at properties when you know they're not ready to buy will bring your dollar per hour way down)
- The more effective you are with your I Time/Ninja Nine activities, the better your ratio gets because the better it produces P Time
- The most important things to work on to increase your dollar per hour are: 10 step Buyers Process, Sweet 16 Listing Presentation and your pre-listing interview
- The Power of the P (Process and Preparation)
- Income per P Hour versus Income per T Hour (total time when you include P and E time together)
- It's important to know your own numbers so you can work with them and identify where you can improve
- Analyzing your numbers will also help you make smart decisions with your business
- Track your numbers first thing in the morning
- It's very easy to do and doesn't take very long - you just have to be disciplined about it
- Schedule your time, manage your time, and track your time
Quotes:
"What is your time really worth? And how can you scale it?"
"When I think about certain N Time or E Time activities, those are some of the biggest things that fall into the Parkinson's Law of, Okay, maybe these things are of some level of importance - it's not helping us with any new business, but I'm not going to put it on my calendar because it's just kind of this everything else stuff. So it'll just kind of fill in the gaps. But then it starts to fill in the space where we have allowed for productive things."
"Firstly, we need to understand that it's not negative, just as you said, Matt. Some of your best time you're going to spend in your business is E time activities."
"These are the things that an assistant can help with. A lot of E Time activities are where you can bring somebody on board to help you, who can add value to your business and to your clients."
"Most businesses look at success as solidified contracts, right? So what we're trying to do is you're trying to make contracts come together."
"That's a good example - gratitudes and affirmations - E Time. I'm not stopping doing that… There's your identification right there of understanding where time is, but how things are important versus productive versus indirectly productive."
"I Time is the one thing where this is what you put on your calendar. This is the one thing that you have complete control over, but only you have control over. Nobody else does. But other things can take I Time away from you if you're not careful."
"It's only I Time if you actually are asking FORD questions."
"Depending on how you approach [I Time] that day, you can actually produce different results for yourself, depending on how you engage it."
"Customer service calls are invaluable I Time, and we've all watched it - your number one best source of referrals right now is the current people you're working with."
"There are a lot of Ninjas that I know that have built pretty amazing lives, that their lives turn into their I Time, and they wonder why they're so successful. There's people out there like, I don't know - I'm just living my life or going out and hanging out on the boat with friends...and I just got referrals coming in. Well yeah, because your life is I Time!"
"If you're inclined to track it, there's a ratio that shows up that says, For every 'I' hour that I do, I get rewarded with however many 'P' hours that are there."
"When I'm coaching somebody, and somebody wants to track these numbers, my goal is to get them to a 1:1 [ratio]."
"This is where you can figure out what your dollar per hour is - if you know that number, you get to make some very healthy business decisions about who you're spending your P hours with."
"Your I Time ratio is directly correlated to the power and efficiency and effectiveness of your I Time activities for your Ninja Nine. So the more effective you are with those activities, the better your ratio gets, because the better it produces P Time."
"So preparation and process - so important towards maximizing that income per hour."
"This is why it's important for you to know your own numbers, because once you know it, now you can change it. Now you can do stuff with it."
"If you take the time to learn this about your business...if you really want to be an educated business owner, and you really want to understand your platform, you should take the time to track these numbers and learn about it. Get a spreadsheet and start keeping track of all this. The data you will get out of it is absolutely amazing, too. So you can make smart decisions with your business."
"The point is to understand this so that you can be better at managing your time, so you understand the value of doing a Monday morning agenda, understand the value of time blocking your calendar for your Ninja Nine activities, so that you can see what your time is worth."
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