Time is money, honey!

Time.   Lots of us feel like we don’t have enough of it.   Whether it’s time for work, family time or just chilling.  You can’t make more of it.   It’s precious.   No, it’s valuable.   As a business owner or even as an employee, have you ever stopped to consider what your time actually costs?  For many businesses, failing to understand the value of your time could be the difference between profit and loss.

At The Productivity Bureau we believe in the power of measuring and getting an in depth understanding of how you are using your time.  I recommend time tracking (that is carefully noting everything you do each day and how long you spent doing it) to all our clients.   Over a minimum of a couple of weeks, we can start to build a picture of how you are REALLY using your time.  You can note your activity on a bit of paper, a spreadsheet or better still, using one of the many time tracking apps available online[1].

You can have loads of fun analysing the data in different ways.  At least, that’s what we at The Productivity Bureau call fun!  Finding out what times of the day you are at your most focussed and productive can help you know when to plan different types of tasks for example.   Not taking enough or long enough breaks from your desk could actually be slowing you down.   However, probably the most vital piece of information you will get from your time tracking data, if you do it well, is the total number of hours you spend working in your business.   And from here you can work out your actual hourly rate.  That’s your rate of pay per hour when you include all the admin, the marketing, invoicing, the chasing clients and suppliers, the emails, the calls etc – in short, everything you do for that business.   If you don’t like the look of that hourly rate then something needs to change.   That something might be your pricing or it might be that you need to make some changes to the way you work – it possible it will be both.

I remember one particularly eye opening result when I used this technique a couple of years ago with one of my VA clients.  My client had a nagging suspicion that she had been devoting too much time on one of her longstanding clients.  Time tracking data showed she was correct.   Only she wasn’t going over by a little bit here and there, she was actually doing almost double the number of hours that her contract allowed for. It’s an easy trap to fall into when the work is exciting and the client is a great guy.  It had crept in gradually and become normal but as a business owner she simply couldn’t afford to give that time away.

Time tracking allows you to price your projects and set your hourly rate more accurately.  That might mean you need to raise your rates but it may also allow you to price your projects more competitively.

At The Productivity Bureau we use this data to guide us on where to target our efforts to improve a business’ efficiency. It helps you make better decisions about tools you can use to make your business more efficient.   Some of those tools come at a cost but understanding the cost and value of your time will allow you to make judgements about where you will get value for money.  £20 per month might sound like a lot for an app but if it could save you 4 hours of your time a week then it’s likely to pay for itself many times over.

Similarly, as you grow your business there’s a good chance that you’ll want to hire someone to do some of the back office stuff so you can focus on what you do best.   If you’ve set a reasonable rate to cover you for doing this work, when the time comes you’ll know you can afford them.

Of course there will be times when you need to invest additional time in order to grow a business – that’s perfectly normal.   A time audit will help you differentiate between the things you are doing to keep the lights on and the things that are actively growing the business and help you keep your workload sustainable.

In my next piece, I’m going to talk about approaches that will make the most of your work time and how to use technology to automate as much of your work as possible to make your business easier to run.

[1] I’d recommend myhours.com or toggl.com.   Trust me – you’ll get much more accurate results.

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