As a small business owner and freelance writer, I track all of my time. It doesn’t matter whether I’m working on hourly billable work (which is relatively rare for me), a per project based fee, or even a per word article, my time tracking app is always running.
I track everything from client work, writing, creative writing, my blogging activities, any administration, the time it takes to track invoices, all of my planning time—I seriously track absolutely everything.
Time tracking has so many benefits, way more than I even know, but these are the top five reasons why I track all of my time (and I should too):
Scoring Profitability
My number one reason for time tracking is because I need to know if the work that I’m doing is profitable. If it’s not, it needs to go.
For example, if I’m contracted to write an article for $50 and it takes me two hours to write that article, it’s not profitable. I know that based on my client workload, my time schedule and the base amount I need to make anything less than $40 per hours in not profitable for me. Time tracking allows me to see that I probably need to get rid of that fictional client’s work.
Knowing what you’re doing, how long it takes you to do it and what the base pay you’re making on it is incredibly valuable as a small business owner. Sometimes we use the overall dollar amount to define whether we take on a project, but that’s often a poor way to define it—$100 for an article sounds decent (especially if you’re just starting out), until you find out it takes you 6 hours to write.
Build Pricings and Estimates
Much like understanding your profitability, time tracking can help you build accurate estimates for potential clients and set up a pricing schedule.
Pricing schedules are something that I struggle with a lot of the time, and I find myself often referencing my hours when I’m working on my pricing schedule. Likewise, when it comes to creating estimates for potential clients and customers, I always reference my past project hours.
When you know how long it takes you to complete tasks, it makes it a lot easier to create a value picture of your time!
Improve How You Work
It’s not all about money and profitability, a lot of my time tracking simply has to do with me. Tracking time is a great way to improve my own working habits.
Simply based on my time tracking, I’ve changed my daily work schedule to work for me. I’ve cut high cost, low profit things from my schedule (i.e. meetings), and simply learned more about how I work!
Better Manage Your Team
For business owners with teams, employees or contractors, time tracking is particularly important when it comes to team management. This is not because you need to watch over your team’s shoulder while they work (don’t be a micromanager, it’s bad for business!), but because it helps give a more full picture of what you’re working on.
It also helps when it comes to increasing staff numbers, sometimes what you think you need more help on, isn’t in the numbers! Check before you hire!
Free Time Tracking App
Now that I’ve convinced you to track your time, I thought I’d share the app that I use to track my own: Toggl.
Toggl is free to use (though you can get a paid version if you want), so easy, and incredibly helpful when it comes to monitoring your work. PLUS, it sends me a weekly report to let me know where all my time was spent in case I forget to analyze.
Do you track your time? Tell me why in the comments!
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Tae started out as a journalist before following the money into the corporate world. But it turns out that the grass isn’t always greener and now you can find her spending most of her time writing about all the things she loves. Namely, money, travel and business with a hefty dose of self-deprecating humor. She is a podcast fanatic, blogging aficionado and loves to find new ways to turn passions into cold hard cash!
