Measure and increase your performance in 5 questions (+ 1 bonus)
So, you chose to gain control of your time and started using a time tracking tool, possibly one that allows you to record billable hours. Good for you!
However, this is only the first step towards your goal. Like with all strategies, collecting that data won't be of any help unless you analyze it.
Allow reasonable time to pass so as to collect a minimum amount of data to work on. Conducting this analysis only a week after you've started using your time tracking tool won't be of much use, because it's unlikely (although not impossible) you will work with several different clients in a week.
As you're going through all of this to become more efficient in the first place, it would be a pity to waste time and effort on an evaluation you could carry out, say, at the end of each month or quarter or semester instead.
Whichever interval you choose, allow for some time to pass and then find a nice and cosy time window during one of your workdays to look at those figures.
Time to get our hands dirty!
Juggling with features: Enter Month-End Checks
Personally, I do my own analysis at the end of each month, performing what I call 'Month-End Checks'. That's when those handy reports provided by your time tracking tool with billed hours included come into play. Once you've got your eyes on them, there are a few questions you should be asking yourself.
1) Did I achieve my income goal? How do my earnings for the month compare to the number of hours I worked?
It's important to look not only at whether you achieved your income goal for the current month, but also at the time you spent to reach that goal.
Say you earned €2,500 in May, but the total billable hours tracked for that month amounts to €2,000. This means you earned more than you worked for, €500 to be precise, without lifting a finger! On the whole, you have high-paying clients and you are already earning (more than) what you wished.
2) What's the resulting hourly rate? Is it lower or higher than the hourly rate you wanted to achieve?
Take into account the jobs you did for each client and compare the time you spent on them with the total amount you charged that client. This will be useful even if you are paid per word or per any unit other than hours.
3) What are the best-paying projects and/or clients?
Take some time to analyse which kind of project you perform better on, so as to make room for more of the same in the future, and which kind of client is better-paying at the end of the day, so you'll know you should accept more of their jobs.
If, instead, your earnings are lower than the total amount of billable hours, it means that you earned less than you worked for. There must be weak spots to improve upon somewhere:
4) Which tasks are too time-consuming or not paid enough?
You may be spending a reasonable amount of time on a project, but you're simply not charging enough and your time is not worth it. Or maybe you'll realize you're getting distracted and spending too much time on projects, so you should take measures to increase your productivity (do RescueTime or the Pomodoro technique ring a bell?).
5) Did you manage to translate as many hours a day as you planned? If not, did you exceed that because you worked late multiple times? Or did you loaf around and procrastinate instead?
I usually divide the total of worked hours in a month by the number of working days for that month to obtain the average number of hours worked daily. If it matches the goal for daily hours I've set, I will have a reason to be satisfied.
The same goes for any productivity goals you may have set: if you're using the time tracking feature in LSP.expert, the Performance report will outline your hourly productivity in words for each month, with the option to filter that by client, service, job type, and so on.
Bonus question: Did you neglect your marketing tasks as a result of spending more time on projects than you planned?
There's usually a very important client we forget to take into account, and that's us. We may find marketing tasks boring or incompatible with our introverted nature, but the truth is we will benefit from them in the long run. So, if you're trying to stick to a marketing plan, you now have a way to find out whether you're making progress. The proof is standing right there in front of you.
That's how those time reports can become a key instrument to holding yourself accountable for your goals.