How to Profit From Better Time Management
Welcome to the 2nd installment of my “4 Steps to a More Profitable Business” email series. If you missed Part 1, read it right here!
Last week, we looked at common misconceptions around business success and revenue. Having huge revenue is great, but that doesn't mean you're keeping the money you make - that's all about profitability. We're looking at ways to make you more profitable and today, we're on to the first topic.
In today's story, we'll look at:
Profitability and time in your service business.
Ever heard the saying "Time is money?" I'd say time is often worth MORE than money.
Consider that epic DIY home decor project you saw on Pinterest. After you spend 5 hours making something that might have cost you $40, would you say it was worth what you'd have charged for 5 hours of your time? I'm guessing not.
Your time is super valuable and it can often be worth more to you than money if you really think about it. Time means connecting with friends and family. It means clearing your head and recharging. And sometimes, it means that nap you desperately need. Ok, we, we desperately need!
And time has a lot to do with how profitable you are or aren't. So I'll ask you first --
Do you actually know how your time is spent in your business?
Do you have any idea (or even a ballpark) of what kind of time you're spending on activities in your business? Do you track your time on client work, developing products, networking, marketing, everything you do that relates to your work. Financial guru Dave Ramsey likes to say about money, "if you don't tell your money where to go, you'll wonder where it went!" I think time is the same way.
I used to HATE the idea of tracking my time! I thought it would mean too much structure and giving up flexibility. But it didn't and the results were epic. I want to encourage you to start tracking your time if you don't already. Get really granular and track everything, at least for awhile, because that knowledge is going to mean power. It's a big key to some insights I'm going to break down for you shortly.
I started tracking every minute I spend on Greatest Story since August 2016 using Toggl. That's how I can tell you that from when I started using Toggl til right this moment (about 14 months exactly) I've spent 1,905 hours and 10 minutes working. And I can cut that pie down to every client's project, every marketing initiative, time spent networking and more.
But what do you do with this info and how does it make you more profitable? Let's dig in.
If you know where your time is going, you gain x-ray vision into what's profitable (and what isn't) in your business.
When you track your time - here are some of the awesome things you can start to do to make and keep more money in your business.
Uncover inefficiencies in your work and optimize them.
Imagine you were tracking where your clients were coming from and how much time you'd spent on different types of marketing and referral activities. You could look at how much money you're making / clients you're bringing in relation to say... how much time are you spending networking? If you're spending a ton more time networking than you're seeing money coming in, that shows you your time isn't being efficiently well spent and you're not getting a great return on investment.
Because you're tracking your time, you would have a way to know that and realize there may be a problem. Perhaps you need to change the type of networking you're doing or do more of the networking that did bring in clients.
A great example for me was realizing how much time I was spending writing emails to schedule meetings! Once I saw how that time was adding up, I chose to invest in a scheduling tool - Acuity - and never looked back! I had been worried about the $10 or so a month it costs to have, but I know I'm way more profitable compared to the hours upon hours it saves me each week setting meetings. Now I'll gladly pay the $10 bucks a month to have more time to make money in the business. (Read more about how I use Acuity here).
Raise your prices/change your services
If you track your time on every client project, you can look at them at the end and see - did you make your behind-the-scenes hourly rate (if you give a project fee)? How much did you exceed it or miss it? If you know how long it's taking you to do a service for a client, you can begin to see its relationship to what you're charging, which is especially important if you charge a project fee vs. hourly.
You can also see what's taking you more time than you thought it would. In those cases, you can choose to either raise your prices or consider if there are parts of your work you could do more efficiently. I know I've done both. And since you know which projects are going to be more profitable for you inherently, you can then adjust your marketing strategy accordingly to promote those types of projects over others! Isn't that nifty?
Spot new opportunities for growth and change
I have a penchant for underestimating my time - at least I did before I tracked it. I would try to be scrappy and never pay anyone to help me with aspects of my business or pay for business tools (like Acuity).
When I started to see how much time simple administrative tasks were really taking me, I realized that time would be way more profitable if I was spending it doing client work. But in order to do more client work, I needed to free myself up for it! This is one of the biggest reasons I hired a virtual assistant. I don't use a VA for a huge amount of administrative work, even now, but I do for very simple tasks that add up over time. I'm certain that I'm saving myself money and keeping more by hiring instead of trying to do literally everything myself.
You may want to consider what you could hire someone to do for you less expensively than what it's costing you in time away from your business. This could be a virtual assistant, a graphic designer, a copywriter, etc. Time tracking will help you identify what those roles might be and then you can consider what rate would be worth it to pay someone to "buy" your time back and make more from it!
This week's challenge: set up Toggl or another time-tracking account and see what you can learn.
If you're game to try this, I'd like to challenge you to start tracking and tagging your time.
I find this really easy to do (and free) with Toggl, but here are several free time-tracking tools for entrepreneurs you could grab and start using:
Challenge: Pick one of these and track your time for the week. Reply to next week's email and let me know what you observed by seeing how you're spending your time!
Read more about how I use Toggl and a great book on time management here.
We're looking at profitability and systems next week
What's another thing that could save you some profits? Systems and processes!
See you again next week when we dive into how systems can bring you more profits, happiness, and good things into your business.
