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.

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.