So often, I find that tracking your time gets a bad rap. People so often assume if you’re not charging hourly than there’s no need for tracking your time.
The reality is, there are many really important reasons to track your time that have nothing to do with billable hours.
Tracking Your Time For Capacity
If you don’t do any time tracking, it’s hard to accurately assess where you’re at as far as capacity goes. This is true of your role as the business owner and for the entire team.
Without tracking your time, it’s very difficult to assess how much time you’re actually spending on various things. We so often drastically underestimate how long some things take. For instance, I had a client who thought editing her weekly videos took 20 minutes but when she tracked it, we realized it was actually taking about an hour and a half to edit each one.
Yes, that’s right, more than four times what she estimated.
I see this constantly with my clients and my own work. I also see the flip side, when we drastically overestimate how long something takes. This usually happens with things we’re dreading.
Often, when you start tracking your time, you realize it’s really only a 15-minute task but you hate it so much you put it off forever and treat it as if it’s a day-long project.
Some of these things may belong in your wheelhouse while others likely need to be outsourced. In addition to tracking your time, I also recommend starting an “I hate list” to identify things you need to get off your plate.
Tracking your time enables you to capture what’s really happening in your business so you can make educated decisions about moving forward. Understanding your capacity, or lack thereof, starts with tracking your time and is a huge part of avoiding burnout and overwhelm.
Tracking Your Time For Productivity
Without time tracking, it’s also very difficult to assess if you’re spending the right time on the right things. We so often think we’re focusing on the necessary things to move our businesses forward but when you get done tracking your time and look at the results you realize you’re wasting a ton of time in little sneaky ways you didn’t anticipate.
I’m not a fan of the word waste here because the reality is you’re likely doing things that need to be done in the business. What’s also likely is that you aren’t the best one suited to doing these tasks.
In his book, Clockwork, Mike Michalowicz covered the 4D’s that he sees as critical to success in business: doing, deciding, delegating, and designing. He argues your business needs to spend 80% of the time doing, 2% deciding, 8% delegating, and 10% designing. Many businesses that are struggling with overwhelm or capacity often have this mix completely out of whack.
But, how’ll you identify where your mix is? By tracking your time of course!
As I was working through this section of his book, I realized a key problem in my business and many of my clients’ businesses as well. This problem is confusing deciding with delegating. He describes this feedback loop as one of the core issues preventing business owners from successfully growing and scaling.
We think by growing our team we’ll be able to delegate things off our plates but what happens is we end up deciding ourselves into a huge mess. Rather than actually delegating tasks successfully to the team so they have the tools to complete them independently, we set things up so they’re constantly relying on us to decide all the things (and then some).
Until we can make that shift to truly delegating, we’re stuck constantly attempting to delegate and instead, we decide our way into oblivion.
This can be hard to recognize when you’re in the thick of it. When you start tracking your time though, it becomes easier to recognize what’s actually happening. As the time you spend deciding things for your team piles up, it becomes more and more apparent what’s really going on.
Tracking Your Time For Profitability
There are two key ways I’ve seen that tracking your time can help improve profitability. When it comes to multiple revenue streams, it’s easy to focus more effort in one area without truly understanding if it really makes sense.
Often when I dig into packages with clients, they look great on paper. But when we start tracking time actually spent on delivering the package, we realize they’re actually losing money. With one client, she realized she wasn’t accounting for roughly 20% of the time spent on projects because she was only estimating the execution time. There was no time added for project management during the execution phase.
When revenue is an issue, we often find that the problem isn’t that the business needs more clients. Instead, they need to charge more accurate fees to reflect the work that they’re already doing.
In another case, time tracking showed that a client was spending the majority of her time delivering her lower cost package. If she shifted it so that most of her time was spent on her more profitable package, she could double her revenue by working fewer hours each week.
But determining each of these cases starts with tracking your time to see what’s really going on. Then you have some hard data on the reality you’re facing rather than some idea of what’s happening.
So whether it’s capacity, productivity, or profitability, tracking your time helps establish where you’re at now and where you want to go to reach your goals. You can also track your progress along the way!
