In this episode, we talk about how to value the output that you're putting into a company.
Kevin O'leary, better known as Mr. Wonderful from Shark Tank, put out an Instagram post the other day, where he gave his five guidelines for how he hires people. And the first guideline was you have to be able to show me that you can make money or that you have made money for my competitors. And that's what Kevin O'leary says for his competitor's right, that you made money.
And I was sharing this with Ana the other day and we were going through all these different things and I was asking Ana, Hey Ana, do you fit all of these criteria? And she was stuck at the first one because she was like, Okay, how do I prove that I am making money to others and I think this is a valuable skill set that everyone needs to learn. So whether you are an entrepreneur or you're still working at your 9-5 job right now, knowing how to value the output that you're putting into your company is really important because you have to be able to explain the value that you're offering for you to be able to keep your job or keep your partnership etcetera.
So in this episode, we are actually going to learn, how do you do that? How do you value the output that you're putting into a company now, we're only going to be talking about one way to do it, and the reason why that is I think if you're in sales or if you're in a front-facing role, so there's front-facing roles and there's back facing roles, right backstage roles, so front stage are customer-facing roles and this is a chance for you to make revenue by doing sales, you know, increasing the top line backstage, However, they're not really actively involved in sales and backstage, I think a lot of backstage employees have a little bit more difficult time and trying to figure out how they value the output that they're putting in.
So I kind of mentioned top-line revenue which was from the front stage, so when you're thinking about a company, whenever the company makes money, that is revenue, revenue is the top line, right? And revenue really doesn't matter too much. What we're really interested in is profitability and profitability is your bottom line. So if you think about revenue minus all your cost, this is your bottom line, Revenue minus costs equal your profitability. So if you want to increase your profitability, you have two options. What three options really. But one you can increase your top line, you can increase your revenue or you can increase your bottom line by reducing your costs, so you can increase your revenue or you can reduce your costs, and these both of these will increase the bottom line. Does that make sense so far? I hope it does.
So if you are front stage then you are likely involved in revenue-increasing activities in backstage. However, you don't have the opportunity to increase revenue. So this is what this podcast episode is about. How do you start valuing your time, your output based on backstage activities? When you may not even need to, where you may not even touch the customer. So this is how you do it when I was working at Cargill. One of the ways that I did this is I had this me, it was kind of like a data check validation test and this artwork every single day we would have all these different price data coming into our system and I would have to validate whether this price that uh was going into the right places and was going in the right way. We weren't missing any entries etcetera. So we're just validating whether the data is coming in or not. And this took me several hours each day.
So Cargill at this time they were paying me $50 an hour. And the process that they were asking me to do Was taking me around 10 hours per week. So if you think about it, $50 an hour, 10 hours per week, That's around $500 a week. Well, I created a process that would save those 10 hours By creating some automation. So I wouldn't have to work those 10 hours. And I have actually just created some value. I've reduced my costs because now those 10 hours I was putting into this process, I can use those 10 hours somewhere else. And I am saving the company $500 per week. So $500 per week, that 500 times 52, that ends up to being $26,000 worth of savings. And this is how I'm directly contributing to the bottom line.
So I don't have to be a front-stage employee to show that my work has value. I can create innovation in whatever I'm already doing to show Kevin O'Leary that I am making money for my competitors. If you're just getting into a backstage role and you're not thinking about improving it at all and you're just kind of doing the day-to-day, then no, you cannot prove that you made money. But if you're actually improving systems, you're creating um efficiency, you're reducing redundancies. You're essentially trying to save costs and you're getting higher output for the same amount of costs. Then this is where you're starting to come in value. And you can actually quantify that by thinking about how much time you're saving. And if you think about it, if I'm getting paid $50 per hour from Cargill, they obviously have other costs too right because they have to pay for my taxes, they have to pay for my insurance, etcetera. And they save on all those hourly costs. And this is a way that I can directly show that I am bringing in money for my company. And now you can too, I hope this helps. This is Robin Copernicus. Boom, bam, I'm out.
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