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Business success is dependent on a solid financial foundation & success looks different to everyone & there is a lack of equity of access to resources and information for small business owners and independent contractors & there is a societal narrative making us believe “balance” is our ultimate goal & … There are so many “&”s that impact being your own boss. Let’s have some frank discussions on the basics of business with a holistic focus on everything that helps business owners define and find success.
Molly Beyer: [00:00:08] Hello, hello, I am Molly Beyer, host of The Ambiguous &: Business Basics and Beyond, a podcast where we have frank discussions on the basics of business with a holistic focus on everything that helps business owners define and find success. There are so many ands that impact being your own boss. Join us as we explore all these ands and more. Like, subscribe, or follow wherever you get your podcasts and let's explore these ambiguous ands.
Molly Beyer: [00:00:39] Hello and welcome to The Ambiguous &: Business Basics and Beyond. I am your host, Molly Beyer, and I am here to lead you through frank and holistic conversations on the basics of business. We all know that in business, there are all sorts of metrics we can use to track progress, to set targets, and to measure success. Marketing, financial, human resources, and customer are the main categories for metrics to measure in business, but one crucial one often overlooked, especially by small businesses and solopreneurs, is time. Time tracking is a fundamental pillar of every successful business, and plays a major role in determining the pricing of your products or services, as well as being a primary informant in business decision-making. Part of my recovering from being a control freak is also recovering from being a workaholic. So when I started my business with a specific boundary of how much time I would spend in it, I knew I needed to make sure that I stuck to it. This started me tracking my time from day one, and helped me to not only stay within my goal, but also helped make sure I was pricing my services correctly as I knew exactly how much time I was spending on each task.
Molly Beyer: [00:01:49] As my business grew, I needed more streamlined ways to create pricing as each of my clients has a different pricing situation and their pricing reflects that. Through time tracking, we were able to create a pricing calculator that accurately predicts scope of work in relation to pricing so our clients are neither paying too much nor too little. While service-based businesses often only have time tracking to help in building pricing, it's also important in other business structures. In-house production or crafting businesses such as baking or manufacturing, often only include the cost of components into pricing, but the time it takes employees to handle production and everything involved in it is equally as important to add, and it really is the only way to control labor costs. For businesses with a large administrative component, those that are supporting the frontline product or service functions, it is especially important to know how much time is being spent on specific tasks to make sure output is aligned with hours.
Molly Beyer: [00:02:48] I need to step back one second here, though, to say that this is not an excuse for companies to take advantage of employees either by expecting output that is not being compensated for or by micromanaging. Metrics are necessary, but you always need to remember there are human beings behind all of those numbers. So back to the numbers. No matter the industry, it is very difficult to devise a pricing strategy without having a clear idea of how much time you are investing in it. A consideration when using time tracking for pricing is if it will be you or someone else performing the work. If there are multiple people completing the same task, a high average time is best used to complete this. There are some things I am super fast at, like reviewing large data sets for inconsistencies and patterns. In my bookkeeping business we complete many cleanups, which starts with data review and strategy to reorganize. My superpowers let me do this very quickly, even with very large accounts with many thousands of transactions. My staff have different superpowers, though, and do not always complete this task as quickly as I do. So if I price this at the time it would take me, but someone else completes the work, we're not going to make any money.
Molly Beyer: [00:04:12] I am also terribly slow with the monotony of things like bill pay, but my staff can get it done much quicker so I can price this lower, as long as it's not me who's actually doing it. Understanding the lowest amount you can charge per hour is important in maintaining business profitability as well. When you have the data, you can better institute strategies like intuitive pricing or discounting, because you're going to know how low you can go without losing money. So how do we go about this time tracking business? Well, first things first. Find a tracking software. Maybe you're using another software for managing projects or client interactions that also has a tracking function. If so, you just need to set yourself some non-billable buckets as well. And many of the time tracking apps have a free version. I've used a free version of Toggle for four years now, and many of these time tracking apps also have an upsell section where you can get a client and project management tool as well. This is great if you don't need a larger CRM or a project system, but maybe just a little more than time tracking. But no matter what you choose, find something with reports and analytics so you can quickly and easily review how you're spending your time.
Molly Beyer: [00:05:33] Next, we want to break down time into different types of work you're doing. One of the ways to make it easier to conceptualize it is sort of in the form of buckets. The idea is to identify 5 to 7 areas you're spending most of your time, and place those in different buckets. Some examples from my own buckets are administrative work, client work, leadership, HR management, professional development, and CEO visionary, or as I like to call it, my Rainmaker Space. I've also found that color coding my buckets helps me carry them through all of my organizational applications like email, to-do list, and calendar. Remember, especially for solopreneurs and business owners who are bootstrapping in the early stages of business, track all activities, whether directly income-generating or not. These could include studying for a necessary certification, dealing with client issues, or managing your emails. This also helps monitor the areas of your business that require attention, such as team leadership, professional development, or broader business goals.
Molly Beyer: [00:06:36] In relation to income-generating activities, it helps to remember the Pareto Principle or the 80/20 rule. 20% of what you do each day results in 80% of your rewards. Or maybe you've heard it this way: 20% of your customers generate 80% of your income. So at a bare minimum, make sure that at least 20% of your time is spent on income-generating activities. Once you've started to measure your time, you'll start identifying areas where you could be utilizing your time more efficiently. Maybe you're spending too much time on administrative work, and not enough time on tasks that are bringing in revenue. This ability to see the time drain can help inform decisions to automate, delegate, or restructure your operations. Tracking your time also helps you to be able to implement additional organizational productivity tools like time blocking. In time blocking, you set specific time on your calendar to handle an activity. You may start your day with 30 minutes of email and to-do list management, then spend an hour on making touchpoints with leads and networking partners, then maybe two hours of meetings before lunch. After lunch, because this is your most productive time of the day, which you have identified through your time tracking activities, you have four hours of focus time to get your real work done. If you don't know how much time you spent on each task, though, you can not accurately block the time needed to complete it.
Molly Beyer: [00:08:02] So you also need to remember you are not going to be productive every minute of your working day. So even adding in some personal buckets for things like scrolling social media, having a chat with a friend or colleague that isn't work-related, or, as so many of us working remotely, maybe time to pet the cat, get the kid a snack, or even fold a load of laundry. Because knowing how you're spending your time each day helps you identify how working works best for you. Again, it helps you determine when you are most productive so you can focus your energies correctly to be more efficient and more effective. Personally, I am most productive on tasks that require extended focus about an hour after lunch. I also tend to get really anxious if I don't know what the next day is going to be like so I set up my to-do list for the next day before I'm done with my current day. No matter what works best for you, you will only find it out by tracking your time.
Molly Beyer: [00:08:57] All right, to wrap up and recap, here are the top tips we have for you for time tracking. One, track all your time devoted to the business. Again, this is not just time dedicated to client work, it's all the time you are committing to your business. It's important to remember even tasks that don't directly generate income need your attention and time, so be sure to capture it all. It's crucial to know exactly what to measure in order to improve. Two, utilize digital tools for time tracking. In this age of technology, it's best advice to pick a digital tracking option, like a time tracking software or computer application to keep tabs on when, where, and how you're spending your time. It grants you access to analytics and reporting and giving you an even more comprehensive overview.
Molly Beyer: [00:09:48] Three, divide your tasks into 5 to 7 main buckets based on the key areas of your business. And remember, while I have buckets like professional development and leadership, you could have areas like baking and decorating cakes depending on your line of work. Tip 4, color coding your time tracking segments can offer a visual representation of where your time is being spent. The benefit of this, you can very quickly see on your analytics what you're doing with your time each week, and it is a great tool to carry over to your other organizational tools. Five, if you're a solopreneur, make sure you are dedicating an adequate amount of your time to income-generating activities so you avoid losing money. Always remember that 80/20 rule: 20% of your time is going to give you 80% of your gain.
Molly Beyer: [00:10:43] Tip six, you might need to track things down to a granular level for pricing, such as employee times for baking or decorating cakes in a bakery, or, again, that administrative time for your front-line staff or product to be accurately supported. And number seven, remember that an added bonus of time tracking is determining how and when you work best, so you can always be as productive as you can, while also just being a whole human being throughout your day. Next episode, we're going to go a step further and talk about using this time tracking data to identify areas to innovate, automate, and delegate to maximize your efficiency. Because once you've started to measure your time, you'll start identifying areas where you could be utilizing your time more efficiently. Maybe you're spending too much time on administrative work and not enough time on the tasks bringing in revenue, but this ability to see this time drain can help inform your decisions to automate, delegate, and restructure your operations. So until then, remember, track your time diligently, find your buckets, and start making data-driven decisions.
Molly Beyer: [00:11:57] Thanks for hanging out with us today. We would love to hear your feedback on today's episode as well as requests for future content. Drop a comment or suggestion and join us next time for more frank and holistic conversations on the basics of business. Please also like, subscribe or follow so you never miss an episode. And until next time, I am Molly Beyer and this has been The Ambiguous &: Business Basics and Beyond. Have a wonderful day!