Profit from Your History
A fellow web developer was recently telling me that business was good, lots of new sales and her pipeline of work was looking great for her team. However, they were only making the same profit in dollars as they were making when doing 30% less work a year ago.
We chatted over a coffee, and I brought up time tracking: were they using it? The answer? ‘Of course we are!’
We then went on to discuss recent projects, and it came to me to ask, ‘What are you learning form these time entries?’
The penny dropped – they’ve been eagerly collecting every hour of every project for the last five years, but they rarely ever looked at the end results.
We went our separate ways, until a call only yesterday reminded me of this chat. She rang to excitedly tell me they had spent a half day going through previous projects, and breaking down the hours into similar sized projects.
The result? What the person writing the quotation thought was a 20 hour job actually took 30. What looked to be a 30 hour job took 40 hours – you can see where this is going.
She thanked me eagerly. They had taken the time to actually use their history to find the profits, or in this case, identify where there was a chasm between expectation and reality.
My homework for you over the next week is to do the same – before you quote on the next project, look again at the ones you’ve done previously.
Are they actually taking the time you are thinking they are, or are they actually taking longer?
Let me know how you get on – send me an email to email@example.com – I’d be interested to see what you uncover!