Time management: Your business depends on it

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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.

The real payoff, though, is having data for client proposals. If you know how long comparable projects have taken, you are better able to quote a price for a project, whether on a fixed-fee or a time-estimate basis. By accurately quoting an estimated project duration, you strengthen your negotiating position by justifying your rates. This also improves your credibility, since it shows that you value time, especially the time they are paying for. As a result, you obtain new work more effectively.

As for time-management techniques to complete projects, here are some that have proven most useful to me. First, realize that you have only so many truly productive hours in a day. Do the most demanding work, such as writing reports, early in the day while you are fresh. Leave easier work, such as preparing invoices or making phone calls, for later in the day. Also, remember that a long journey begins with a single step. Get started early on larger projects. Start anywhere and one step will lead to the next. Get a certain amount done each day and you will soon be far along your project journey. And by having good time metrics along the way, you will be able to gauge your progress and predict your journey's completion.

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