MetaGreg

Awful idea = -1
Weak idea = 1
So-so idea = 5
Good idea = 10
Great idea = 15
Brilliant idea = 20

No execution = $1
Weak execution = $1000
So-so execution = $10,000
Good execution = $100,000
Great execution = $1,000,000
Brilliant execution = $10,000,000

To make a business, you need to multiply the two.

—Derek Sivers, president and programmer, CD Baby and HostBaby

Read more practical software and business advice at Getting Real

A friend back in college once told me that he doesn’t measure his time in terms of minutes or hours but with pesos. I thought he was just drunk as we often were in college. Years later, when I started accepting freelance projects, I realized how important it is to put a dollar amount on every hour you work. The idea of dollarizing your time not only helps you in setting your hourly freelance rates. More importantly, it helps you make key decisions that affect your work, business, yourself, or your family.

You can focus on what you do best

When you dollarize your time, you can focus on your strengths and outsourcing your weakness will make sense. Working on SchoolPad (my first personal Ruby on Rails project) introduced me to the realities of working alone. I have to learn things like design and copywriting that I knew from the beginning would be hard for a coder like me. But, I had two things that will me help solve my problem – pride and money. I bought all the books I think would be useful and read them every day and night like I was preparing for a do-or-die college exam. In the end, I produced crap and had to beg a friend to salvage my work. After my SchoolPad experience, whenever I work on a freelance project, I make sure I identify the tasks that I can work on and find partners that can help me.

You will not be wasting time

I once complained to a friend that going to the movies is expensive. Then one time, he told me he got a discount (about $3 less) to the movie theater he was working for. He invited me to join him. The problem was it would be a 30-minute (at least) commute. Even if I brought my my wife and 2 kids, it still makes no sense to me. I would rather bring my family to the more expensive theater which is just 5 minutes away, and spend the hour playing in the park with my kids.

How to dollarize your time

The easy way is decide how much you want to earn every hour you work. If you set it at $40/hour, always remind yourself that your hour is worth $40. If you are unsure how many dollars to set, try this formula by Rob Walling (from the book Web Startup Success Guide):

Your $/hour = (current salary x 1.3) / 2000, rounded to the nearest $5 increment.
where 2,000 is approximate number of hours worked in a year

Some of them were already implemented but I’m sure you can find something that would interest and stir up your imagination.  Read the list of 999 business ideas.

Traditional. VC-backed and a mix of seasoned executives. Everyone agrees that revenue or profit can come months, sometimes years after launch.

MicroISV. You (or with another developer) bootstrap your business while consulting or working for another company. You wear many hats and put in 60-hour weeks.

Side Project. You work on a small but persistent pain. You work on something cool but don’t have the desire to make it a full-fledged startup. Could be a starting point for another startup.

Open Source. You have no problem including “Software should be Free” and “We want to Make Money” on the same page of your business plan.

Join the discussion in Facebook.

You are paid what you are really worth
You know it. You are worth $95/hour but based on your employer’s sacred chart and formula, you should receive only $15/hour and there’s nothing you can do about it. If you are the employer, you set your rate and that should make you happy.

You call the shots. All of them
You decide on the 5 W’s and 1 H – what, where, when, who, why, and how you work.

The commute is usually really nice
Have you ever fantasized taking the train naked? Ok, maybe not. If you are working at home, you can go straight from the shower to your office.

More time at home
This is a good thing if you have a family or you like the quiet space that a home provides. Don’t worry, you can still go out with your friends :)

You get to see more of your children’s activities
No more missed school plays, soccer games, or parent-teacher conferences. Be careful though because other parents and teachers may think you’re out of job :)

You get out of doing things you don’t want to do
If you don’t want to attend a friend’s party, you can make a not-so-lame excuse like videoconferencing with an important client on Sunday. Don’t worry they would understand.

No coworkers
Working alone sucks. Working with morons is worse. At least with your home-based business, you have options :).

You can do usual “weekend” things when you wish
Have you tried shopping on a Monday afternoon or going to movie theaters on a Thursday morning? No stress. All fun.

No stupid, arbitrary rules
Have you ever wondered why we need to work 5 days a week? Why not just 4? Ok, working 5 days a week is not stupid but if you are the boss, you don’t need to file a sick-leave (and lie) when you have a hangover.

No Boss
Need I say more?

Based from “Start and Run a Real Home-Based Business” by Dan Furman.

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Photo from Extra Ketchup.