Time management: Your business depends on it

If you have worked at a large company, you have probably taken a time-management
seminar, and may think you already know enough about the topic. But you may not fully
understand time management's importance to consultants. Face the facts: You're
your own boss, nobody supervises you. You can easily get distracted; if you cruise the
Web all day, no one will know. Time management does not just help you use your time
efficiently. It is an essential tool when negotiating with clients and managing your
entire business.

Here is how I do it. During the day, I write on a notepad how much time I spend on
each aspect of my business, including client projects and overhead. I divide overhead
into four categories:

• Business development -- marketing my services and developing
  client relationships
• Financial -- invoicing, banking, accounting, and tax
  preparation
• Research -- activities designed to keep me abreast of my
  industry
• Miscellaneous -- everything else

These categories are not sacrosanct; feel free to create your own. I track time in
15-minute increments and include all time, even travel time. I may not charge my
clients for this extra time, but I do account for it. Instead of a notepad, you could
use time-tracking software for PCs or handheld computers.

At the end of each day, I total each category and enter the information into an
Excel spreadsheet. I have one sheet for client projects, one for overhead, and a
summary sheet that adds up and analyzes the results. I use a separate spreadsheet file
for each year. The spreadsheet calculates the following items: total hours worked each
day, ratio of billable hours to overhead hours, total hours for each category for each
month, total time for the life of each project, and net hourly income after overhead.
The spreadsheet also projects my yearly income, which is useful for tax planning.

This information is very useful, especially after you have collected data for a
substantial period of time. You can set targets and monitor your performance. I shoot
for spending less than 25 percent on overhead; if my monthly average exceeds that
number, I buckle down and concentrate on client work. In the early stages of your
consulting career, or when you are between projects, you may have to spend more time
marketing yourself. But now you'll know exactly how much that time is costing you and
you can plan accordingly.

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