If you’re like me, a typical entrepreneur, you’ll have a number of opportunities that you’re considering at any one moment, and only a limited amount of time. So how should you choose how much time to spend on each? I use a simple method to allocate my time between opportunities: I work out what potential earnings each of them would generate if I could work on it full time, and I use that to work out what proportion of my time to use for each.

So, if I was looking at four opportunities, which full-time would create earnings of £30k, £50k, £60k and £70k, I’d allocate 14%, 24%, 29% and 33% of my time respectively (total potential: £210k, eg £30k / £210k = 14%). Assuming an average of 21 working days a month, that would be 3, 5, 6 and 7 days each month. Sounds simple, doesn’t it?

Of course, one thing that this method ignores is the longer-term potential – those opportunities that will create great wealth in a few years, but little right now. So I developed a more complex calculator that allows clients to decide what their time horizon is, and allocate their time accordingly, taking into account both short-term and longer term earnings.
You can download a free version at: http://www.opportunity-matrix.com/timeallocator.html

Taking the simple approach works quite well for a small number of opportunities, but if you have more things you’d like to work on, then the amounts of time allocated by this method can get impossibly small – I generally advise that if you can’t spend at least one day a week – 4 days a month – on something, then it won’t be getting enough of your attention to make a good go of it. So that means you need a way to decide which opportunities to focus on, and which to park – for now at least.

Multiple Criteria
For some years, I used a balanced scorecard, or multi-criteria decision-making (MCDM), approach to making this kind of choice. For this, you take all of the criteria by which you plan to rate each opportunity – it might be how easy it will be, how much time it will take, how exciting it is – and then apply a weighting to each, to indicate how important it is. Then you score each opportunity against the criteria, multiply the scores by the weights, and add them all up to arrive at a rating for each opportunity Here’s an example of how it works:

And then you can select the two or three opportunities with the highest ratings, and apply the time allocation principle described earlier.

You can see that, despite a number of criteria we need to take into account, this method gives us a relatively simple way to compare the choices we have, by arriving at a single ‘Rating’ score at the end.

It was only when I used this method to help me decide on a new car that I realised that it was actually rather one-dimensional. Here is the grid I completed:

Clearly the Skoda Octavia didn’t match up to my specifications, and the Audi was the best choice for me.
There was just one problem: I really (really) wanted to buy the Jaguar.
So that must mean there was a problem with either the criteria, or the scoring – right?

Multiple Dimensions
I noticed that the standard MCDM approach was mixing up criteria that appealed to my rational mind with those that appealed to my emotions – my passion. Splitting out the rational measures (economy, service cost, features) from those that were important for emotional reasons (power, acceleration, style) gave a completely different picture, represented on a graph here:

By breaking out the two types of criteria, I could clearly see that my emotional preference for the Jaguar was off the scale, although the rational choice was for the Audi. So rather than messing about with the scores and the weightings, to try to get the Jaguar to come out on top, I could choose to make my decision based on either emotion or rationality – or a combination of both. But I would understand why I was doing it, rather than being frustrated by the results. In the event, I went for my passion, so I now drive a Jaguar . (One downside is that my wife now understands that the Jaguar is an indulgence, not a necessary tool of my business…)

This example highlighted for me the difficulty of comparing like with like when assessing opportunities in business. Some opportunities that come along are just more attractive than others, regardless of how practical, or viable, they are. So I now use an analysis tool that scores opportunities on two dimensions – attractiveness and viability. I use a scorecard approach for each dimension, but I’m very careful to avoid mixing the two, as they each play a different part in the likely success of a venture.

Successful Business
If an opportunity appeals to us, we are far more likely to make a go of it. We’ll put in the extra effort to overcome the obstacles that will be put in our way, and to find ways to make it work. So the attractiveness score will determine how much passion we’ll put into a venture – how much we want to do it.

But it’s no good being madly passionate about an opportunity if it just won’t work. Which is why I use the viability dimension as well. The sorts of things that will make a venture viable (or not) won’t inspire passion in most people – things like access to the market, availability of skills, adequate funds or cash-flow implications. But they are all things that have to be right if the venture is to succeed fully.

Having said that, you are more likely to make a go of an opportunity that scores high on the attractiveness dimension but has ‘challenges’ on viability than you are to succeed in a highly viable venture that just doesn’t light you up. Without the passion that comes from finding the opportunity attractive, even something that just shouldn’t fail can peter out into mediocrity at best. In my experience, businesses only really perform when they are being driven by people who are truly passionate about them.