Holy shmoley, can you believe it’s already been a year since… well, last year at this time?
Holidays whooshed by, kids outgrew their clothes and 100 generations of tsetse flies zipped through their cycle of life. (Perhaps an entire tsetse empire rose and fell!)
Where did the time go?
No really, where did the time go?
Most consulting firms don’t track time well or they misuse what they track. You can improve your performance and profitability with just a little bit of effort.
Why You Should Track Your Time
👍 Spot Profit Spigots/Drains
When you track the time your consulting team spends on each project and each customer, you can determine which types of consulting projects and customers deliver the most profit to your firm.
This knowledge is like gold in terms of helping you target the best clients going forward and also focusing your business-development attention on more profitable consulting offerings. (Note, this isn’t the same as setting fees based on time.)
👍 Gauge Capacity
Utilization and capacity—interrelated time concepts—are terrific consulting firm management tools though, as noted below, they’re lousy individual consultant management tools.
As a consulting firm leader, your deep understanding of your firm’s delivery capacity is essential. It affects your ability to delight clients, and even your ability to win business depends on your confidence that you can deliver with quality.
Similarly, if you’re in the hiring mode, you need to know how much capacity each new hire grants your consulting firm.
Time tracking will help you on both fronts.
👍 👍 Streamline and Improve
The quick path to working less and earning more: Isolate tasks that gobble up your day, then transform them with time-saving solutions.
Virtually any task your consulting firm performs can be delegated, automated, systemized and/or eliminated. Designing the right streamlining approach also takes time, though, which is why your time tracking will tell you where to concentrate your efforts.
Many consultants believe billing is the raison detre for time tracking. It’s not. Determining your consulting fees based on actual work time is a disservice to consultants and clients in most cases. You should track your time, but usually not to set your fees.
👎👎Evaluating Individual Performance
The worst reason to track time is, unfortunately, common in consulting: evaluating individual performance. Setting individual targets for utilization is misguided and provokes undesirable behavior.
There are better solutions to achieve your objectives.
What to Track and How to Track Time
Track Billable and Non-Billable Activity
Do you regularly track your billable time? Either way, your consulting firm’s efforts on business development, IP development, administration, operations, staff development and other tasks are equally important to track.
Track Iteratively, for Short Periods
Unless your consulting firm is built on a utilization/billable hours model, the whole idea of tracking your time may hold less appeal than shaving the whiskers off a hungry manatee.
Really, it’s not so bad.
First, you don’t have to track your time forever. Short, one-month spells of time tracking will yield tremendous information.
Second, you don’t have to track everything at once.
For instance, you could start by only tracking total hours in four different buckets: client work, IP development, business development and administration. In four weeks you’ll learn plenty about your capacity, profitability and streamlining opportunities.
Then, you could improve your understanding by drilling down in one area.
If you’re seeking deeper insight into your business development time, then you could track only those tasks for a month. For instance, emailing prospects, conducting Context Discussions, writing proposals, negotiating, and keeping your CRM up to date.
Again, in four weeks you’ll garner plenty of precious insights.
The mechanics of time tracking annoy many consultants. Fortunately, you have access to numerous tools that can ease the process.
At my firm, we use a physical device with eight sides that we can flip from one face to another as we change tasks. Computer wizardry and Bluetooth converts that to time tracking.*
We also use a screen capture device that allows us to quickly review our day and note how much time was spent on different tasks.
You must have other insights on why to track, what to track and tools to track time at your consulting firm. Please share!
Text and images are © 2020 David A. Fields, all rights reserved.