The Importance of Tracking Your Time (And How it Will Help You Price Your Offerings)
One of the biggest struggles I had when I transitioned to the new Studio Bicyclette was figuring out how to tackle the pricing equation. I had a lot of questions, but the two that held me back the most were whether to charge hourly or on a project basis, and how to actually come up with those numbers. See, I come from a retail background where pricing is relatively easy to figure out based on the cost of the items you're selling, especially when you've been doing it for years.
When it came to pricing for my own time and skills, however, it was a whole different story, and I found myself completely and utterly lost.
Full disclaimer: I'm still figuring it out. If I had a brilliant equation or a suite of secrets to share with you, trust me, I would, but there are so many different factors involved that unfortunately it's just not as simple as we'd all like it to be.
I can, however, guide you through what I've learned along the way, and one of the best tips I was given when I was struggling to put together a long term package for a new client was to start tracking my time, no matter what you’re working on.
HOW I USE TIMELY TO TRACK MY TIME
I started using an online tool called Timely not too long ago that I really love, but I know there are lots of options out there. Depending on what you’re using for a bookkeeping/accounting program, a lot of them also have that option built in. I gravitated towards Timely because it was super simple to use (I got myself up and running within 20 minutes), allowed for multiple projects under one client (I like to break down the different types of work I do so I can bill accordingly and dive deep into the specifics of where my time is being spent), and I loved the weekly calendar view and how it's broken down by colour. They also just came out with a desktop app, so it's easy to quickly enter in what I'm working on and start the timer no matter what I'm working on.
I've set up and colour coded Timely for each of my clients (including my own, under Studio Bicyclette) and the various projects for each, which means that I can take a quick glance at any given week and see where my time is being spent. I'm such a visual person, so this is key for me, and anything that includes a colour coding option gets my vote.
Even though it might not seem like it’ll help you with pricing now, what it does do is help you learn how much time certain jobs or projects will take you, giving you invaluable insights for the future. I also find it makes me more productive (which you know I'm all for), since when I’m “on the clock” I feel more accountable. A bit of a mind game, but whatever works!
USING TIME TRACKING TO HELP QUOTE PROJECTS
For most of my work, I bill on a project basis, or for ongoing projects, such as social media management, I have a monthly retainer. The way that I come up with my pricing for those is to break out the project into every little task that is included (making sure I include inspiration gathering, strategy, client meetings, etc.), and then go through and assign an estimated amount of time that each one will take. I've come up with an hourly rate range over time (which can vary depending on the type of work I’m doing), so I take the total amount of hours for the project and multiply it by that. I then step back and do a bit of a gut check to see how that feels overall, and will often massage it slightly until it feels right given the project details and scope.
During the project, I make sure to keep track of the time I'm spending on it, and once I’ve finished that project, or a specific month, I can then go back to Timely and take the total project amount divided by the number of hours I spent on it, and that’ll give me a sense of what my hourly rate was, which I like to keep an eye on to make sure I'm on the right track and charging the right amount.
Over time, tracking how you spend each day provides invaluable information while also keeping you accountable, so it's really a win-win. Instead of having to guess how long a certain task might take you the next time you're quoting on a project, or how much time you spend from start to finish on a certain type of package you offer, you have the numbers in front of you, and when it comes time to bill for the next project, you'll have way more insight to pull from.