The phrase has become hackneyed with overuse, yet hits the nail on the head when describing a small business owner’s relationship to time. In fact, in a study conducted earlier this year by the Electronic Transactions Association (ETA), the 592 respondents reported that they valued their time at an average of $170 per hour—making wasted time an expensive proposition for those small businesses.
Entrepreneurs understand the importance of managing time unlike just about anyone else. Creating jobs (two out of every three new jobs in the U.S.) isn’t a 9:00 to 5:00 proposition. This week OnDeck released a new survey that suggests America’s small business owners spend an average of 53 hours a week building their businesses compared to the national average workweek of 47 hours. What’s more, one-third of the business owners surveyed said they would need 69 hours a week to successfully run their businesses.
A longer-than-average day was certainly my experience as a small business owner. Like many business owners, I was motivated and felt my business required more of my time. However my wife would often call the office into the wee hours of the morning to ask if she needed to bring over a sleeping bag—my cue it was time to wrap up for the day and come home.
By the way, although 45 percent of them described work/life balance as an illusion, other surveys suggest the independence of working for themselves is worth it. That’s certainly the way I looked at it.
Why Would a Small Business Lender Be Interested in How a Business Owner Values Time?
That’s a good question with a very straightforward answer.
Speed to funding is a big deal to businesses and the time it takes to find a lender, complete the application, and hopefully obtain approval can take a business owner away from the important work of running the business. In fact, 63 percent of those in the ETA survey said speed was a primary reason for choosing the online lender they did. The ability to act quickly to take advantage of an opportunity is often critical to successfully leveraging that opportunity into increased profits.
According to a 2014 New York Federal Reserve survey, the average small business owner spends 33 hours applying for a small business loan. As a business owner, whether or not you value your time at $170 per hour or something else, those 33 hours become expensive—particularly when you consider the number of applicants that leave the traditional small business loan process empty handed.
The time it takes to find financing is a challenge for many small businesses and an opportunity cost that is simply too high. It’s not the decline rate that troubles me, but the lost time waiting for the decline.
We Need to Help Business Reclaim Some of that Time
Technology has changed the way we shop, the way we make travel arrangements, and even the way we hail a cab. In much the same way, technology can now streamline the loan process and give businesses faster answers so they can make decisions about the growth opportunities they can pursue, and those they can’t.
What’s more, it’s not just technology, it’s looking at small business lending from a completely different paradigm. How lenders evaluate business creditworthiness and the type of financing they offer are all part of the equation. There are even traditional lenders that are recognizing the problem and working on solutions.
What Would You Do With an Extra 33 Hours?
What if a small business owner could get some of those hours back?
“Our research shows that small business owners are racing against the clock and need to find ways to take hours back—through time-saving tools, software and innovative services such as online financing,” said Andrea Gellert, chief marketing officer at OnDeck. “To help hardworking small business owners make the best of the 33 hours they can get back when they turn to online financing, we’ll be unveiling a host of time management tools and best practices over the next couple of weeks. We’re committed to helping small businesses get efficient access to capital and take their time back.”
I seldom talk about what we’re doing at OnDeck in this column, but this is an initiative I can get behind—I’ve experienced the pain of feeling like there was never enough time to get everything I wanted to get done, done. As a result, in addition to other initiatives designed to share helpful timesaving tips over the next few weeks, I’ll be hosting a Facebook Live chat to share tips and best practices that will hopefully help you recoup some of that precious time. I hope you’ll join us. Visit OnDeck’s Facebook page, Facebook.com/OnDeckCapital at 2:00 pm EST on September 1 to be part of the conversation.
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Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.