To face the facts about the health of your business you must log time for labour tasks. But what about the general business management tasks such as quoting, research, emails, phone calls etc. Do you log the time spent here?
I’m a coder so I log my coding time. I have done that for ages but I’ve never logged a second of management time. I’m starting to realise that I should because I get the sense that it’s a bit of a hole that money is sinking out of
How do you manage your business management time? Not sure about you but my management schedule is all over the place and normally happens between tasks. Does this matter or is it just an excuse I maybe using for not logging the time? How does your organisation of management tasks reflect how you log the time?
@Shyflower, I’ve done the tracking of every cent/penny before, scary where some of the money goes. Everyone should do a good solid tracking of their income as well as their time. Thanks for pointing this out.
@Sagewing, I’m definitely a one man shop at the moment, the goal is to free up my time for my other business. Specifically development time as I’m switching from service based to product based. I’ve already identified that I need to increase my current rate.
How does your organisation of management tasks reflect how you log the time? Does anyone set aside certain times of the day for organising what needs to be done, letting clients know what has been done, invoicing, finding new work etc? Or do you mix it in between tasks?
A long time ago I read the book “How to Get Out of Debt, Stay Out of Debt and Be Prosperous”. To follow that plan you had to log every penny you spent so that you knew where your money was going. Buy a candy bar - log it. Pay a bill - log it.
In freelance, your time is your money. There’s the correlation. Spend an hour reading e-mail - log it. Spend an hour here - log it. Write a proposal- log it. Work on a project - log it.
That way you’ll find out how much of your time is productive and how much isn’t and be able to trim off some of the fat.
Having an understanding of where ALL your time goes is very important, and tracking your administrative overhead is very important. Over a period of a few years you begin to be able to predict how long things really take and that is an excellent skill, but as with coding it takes time and practice to get good at estimating and tracking time is a great way to learn.
A bigger and better topic is ‘why are you measuring time and what is your goal’? If you are a one-man show and are selling your time in the form of services, then you are essentially a freelancer which is a more limited form of running a business. As a freelancer, you measure your time for 3 main reasons:
to improve efficiency by having a good understanding of where your time goes and making decisions accordingly
to make decisions that will allow you to have the maximum possible number of billable hours
to dedicate non-billable time in a way that will most efficiently keep your freelance practice going well and since you can’t create more time you should strive to increase demand so that you are raising your rate.
The idea is that a freelancer only has one thing to sell: their time. And that is of limited supply. Therefore, to be successful you simply need to optimize your number of billable hours by being efficient when doing admin/marketing/etc tasks, fill up your schedule and start raising your rate.
If you are running a ‘business’ then you need to take a whole different mentality and it’s quite different. In a services business your goal is free up your schedule from billable hours as much as possible, so that you can devote yourself more and more to management, marketing, etc. You want to hire an employee to do more and more billable work, leaving you to grow the business and bring more work in. Ultimately, you strive to be in a situation where you don’t do any work at all and the business works for you, but that can be a long way off.
Business direction aside, time tracking is an excellent skill and I would absolutely start tracking all of your tasks until you have good feel of where your time goes.
There are lots of benefits to having good time management skills. As a freelancer, you can take that information and roll that time into your hourly rate, for example. It helps you schedule your day, reduces stress, and makes you a smarter business person.
I try to schedule each “next day’s” work at the end of the day, but I do end up mixing it up sometimes and sometimes my schedule goes all off kilter. For instance, you never know when you might get an inquiry or a request for a quote and I always try to get those replies out same day no matter what else I have planned.
I think you should do it regularly because ultimately it measures your performance and the mistakes that you have made in past.Many times we not able to remember all things and to analyze them but it may effecting the business in a very big way,so i think to log every things will help you out in many ways.
That introduces another category, which is scheduling and prioritization of tasks as it pertains to time management in business. That is a natural progression - first you need to start tracking your time to begin learning how long things really take. Once you have a good idea where your time goes, you can start making better decisions about how to plan your time.
There are LOTS of good ways to manage your time, so be wary of anyone who tells you ‘the best way’. Personally, I’ve had great luck with the tried and true 7 Habits approach, which you categorize everything into 4 categories (urgent important, urgent non-important, non-urgent non-important, and non-urgent important) and schedule your time accordingly. In that model, you seek to handle urgent-important tasks ASAP so that you can free up your time to take care of the most important ‘box’ which is the non-urgent important. But that’s just one way to look at it.
Logging ‘everything regularly’ can be quite a lot of overhead, too. I haven’t logged admin time in 10 years. If you do it for a while and really concentrate on your time management skills, you will eventually develop a good sense for these things and be able to estimate well.