The Buyback Rate: Why Every Business Owner Should Stop Doing Admin

Let me ask you something. What do you charge out at? If you're a consultant, a trades business owner, a professional of any kind, you have an effective hourly rate. The revenue your business generates divided by the hours you put in. For most business owners I work with, that number sits somewhere between $150 and $500 an hour.

Now tell me this. How much of your week are you spending on tasks that someone else could do for $25 to $35 an hour?

If you're honest with yourself, the answer is probably: a lot.

What Is a Buyback Rate?

Dan Martell popularised this concept in his book Buy Back Your Time, and it's one of the most useful frameworks I've come across for business owners who are stuck doing everything themselves.

The idea is straightforward. Every business owner has a rate at which they generate value. That's your buyback rate. Any task that can be done by someone at a lower rate than yours should be delegated, automated or removed from your plate entirely. Holding onto it isn't diligence. It's just expensive.

When I started my first business, an accounting practice, the best advice I received was to hire an admin assistant from day one. As an accountant billing at $200 to $300 an hour, it made no sense for me to spend a single minute taking phone calls, typing in client details, sorting mail or handling any of the administrative work that keeps a practice running.

So I hired someone at $25 to $30 an hour (Australian dollars) to do exactly that. She started two to three days a week. That freed me to stay in the billable work, which is where my time actually generated a return.

The Maths Is Obvious Once You See It

If you're billing at $250 an hour and you spend two hours a day on admin, that's $500 a day in lost opportunity. Five days a week, that's $2,500. Over a month, $10,000 in potential revenue either lost or not generated because you were doing work a $30 an hour hire could have handled.

Hiring that person full time costs you roughly $4,800 a month in Australia at that rate. The gap between what you lose by doing it yourself and what it costs to hand it off is significant. And that's before you factor in the mental energy you reclaim when you're not juggling tasks that drain you.

It's Not Just Admin

The buyback rate principle doesn't stop at administration. It applies to any task in your business. Bookkeeping. Social media. Quoting. Scheduling. Invoicing. Customer follow-up.

The question to ask for every recurring task on your plate is simple: could someone else do this at a lower rate than my buyback rate? If the answer is yes, it shouldn't be on your list.

This is also how great hires happen. When I hired my first admin assistant, I invested in upskilling her into bookkeeping over time. She put her hand up for more, completed a bookkeeping course, and eventually became a full-time bookkeeper. Then I replaced her admin role with a new hire and the capacity of the business grew without me working more hours.

That's the compounding effect of buying back your time early and consistently.

How to Calculate Your Buyback Rate

The formula is simple.

Take your annual profit. Divide it by 2,000 (that's a standard 40-hour week across 50 working weeks). Then multiply by 50%.

So if your business generates $300,000 in profit, your calculation looks like this: $300,000 divided by 2,000 equals $150. Multiply by 50% and your buyback rate is $75 an hour.

That means anything you can hand off to someone at less than $75 an hour, you shouldn't be doing yourself.

One honest note on the hours figure. If you're working 60-hour weeks rather than 40, use your actual hours. The number will be lower, which is the point. It reflects what your time is currently worth given how much of it you're spending in the business. If that number is uncomfortable, good. It should be. It's the clearest signal I know that it's time to start buying back your time.

Run the numbers for your own business right now. Most owners are surprised how quickly tasks like admin, bookkeeping, scheduling and customer follow-up fall well below their buyback rate. Once you see it in black and white, it's hard to justify holding onto that work.

Where Most Business Owners Get Stuck

The resistance I hear most often is: "I can't afford to hire someone yet."

In almost every case, the opposite is true. You can't afford not to. Every hour you spend on $30 an hour work is an hour you're not spending generating $250 an hour revenue, building client relationships, or working on the parts of the business only you can do.

The other version of this I hear is: "It's just easier if I do it myself." That's usually true in the short term. Training takes time. Handing over systems takes effort. But you do it once, and then you get that time back permanently.

Start Small

You don't need to hire a full-time team member to start buying back your time. A virtual assistant working ten hours a week. A part-time admin person two or three days a week. Even a few hours of outsourced bookkeeping.

Work out your buyback rate. Audit your week and identify every task sitting below that rate. Then start removing them from your plate one by one.

Your time is the most valuable resource in your business. The sooner you treat it that way, the faster everything else grows.

If this is something you want to work through in your own business, it's one of the first things we look at with new clients inside The Growth CFO System.