Value of Time

Cowboy Safety considers the value of time. With today's technology there are very simple ways to measure the value. There are different types of time and the values of that time.

I remember the old story of the man coming down the road and he sees a farmer holding a pig up to an apple tree so that the pig can eat apples. "Doesn't it take a long time to feed your pigs that way?" The farmer replied "It does but what's time to a pig?" Make sure you know the nature of the time that you are measuring. And make sure you know the alternatives for the time.

Let's take a simple real-life example where the metric is money.

At the outset though keep in mind that you of not want to be one who knows the cost of everything and the value of nothing. There are plenty of times when comparisons should not be made.

Today I went to pay my county taxes. There are three choices:
1. Pay half by November 10 and the other half by May 10.
2. Pay all by December 31 and no 18% interest for a late first half.
3. Pay late and incur 18% interest.

I have meditated on the choices and I believe that it was a method set up about 30 years ago based on the values of different forms of money at that time. Obsolete but I have to live within what they offer.

Which to do? It is not as simple as whether or not there is enough cash on hand. Hopefully choice 3 does not apply. The options are worded to cause confusion between two different times and two different rates.

1. Option 1 means having half the money for six months longer than option 2.
2. Option 2 means having half the money for one and a half months.

The real issue is what is the value of half the money for four and a half months.

If you are paying interest on a credit card or line of credit you can pay down the principal for four and a half months at whatever interest rate. Let's say it is 12% which is 1% per month. The value would be 4.5% (1% per month for 4.5 months.) That works out to $45 per thousand dollars. Not too bad.

With a comprehensive plan for how you use money the time value of money can be well worth your while. It does take some study. Someone once added to the basic idea of business and came up with:

Buy low. Sell high. Collect early. Pay late.

When I was with Litton Industries Corporate Consulting we would go into a new acquisition and make some changes. Generally these were old line family owned businesses. They would allow customers to pay slow yet on their own purchases they would be careful to take the 1% discount for payment in 10 days. We would change to enforce 30 days from customers and wait 60 days or longer to pay suppliers. Often this created enough cash to eliminate all loans.

David Sneed

Q Prime

Q Prime is a music management company that has been in operation for 30 years.

They started with no outside funding.

Rather than get cell phones they hired an assistant.

Their business model is simple:

• Keep operating costs low. "I worked out of my house for six years with a telex machine in my basement next to the washing machine."
• Diversify your revenue base
• Use your network. "But if people had thought all along that we sucked, no level of personal contact would have helped that."
• Ask colleagues to recommend recruits

The two founders, Cliff Burnstein and Peter Mensch, are practitioners of what is known as creative friction yet are close enough that they work together in one room and finish each other's sentences. According to industry consultant Peter Lubin, being managed by this duo is "like having an Hasidic scholar whose partner is Attila the Hun."

There are few music entrepreneurs that last. The market is too volatile. By carefully monitoring risk in both activities and operations Q Prime has survived, the two founders are multimillionaires, and they have fun doing what they like to do. 

David Sneed

Ptolemy's Map of the World

In 150, Claudius Ptolemy a Greek, made a map of the world. He attempted, as have many others, to show the world or parts of the world in a flat format. Ptolemy's projection is still in use on maps made by such esteemed organizations as the American Central Intelligence Agency. The most common map that we all know is one that really does not do that good a job. 

Called the Mercator projection it distorts land masses as the poles are approached. Greenland becomes quite large on a Mercator map. 

Maps have historically served other purposes than to express geography. Religion has been frequently used. We've all seen the maps used for advertising in a given town or city. There are subway maps that are indispensable for movement. 

Safety plans are a type of map and they often depend on specialized geographical maps. In a formal Cowboy Safety program we make a variety of customized maps maps to achieve program goals. 

In my office I have a spherical map that has the North Pole in the lower center. Kugaaruk (formerly Pelly Bay,) Nunavut, Canada is the is the center of the map. Barrow Alaska is in the lower right. This is a map that depicts the market area of the barges that traverse the Northern part of the earth. 

David Sneed