Episode 5: Data More Valuable Than Gold

When was the last time you completed a project at or under budget? Is hitting that target a regular pattern in your creative business, or a rarity? There are all sorts of ways that projects spin out of orbit—and some will always be out of your control. But others are up to you. How do you know which are which? And how can you regain control over the patterns and practices that you’re contributing to project bloat? 
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Are you ready to take the struggle out of finding new clients?

I began my first web design company back in 1995. Web design work was easy to come by back then, but executing on those projects profitably was not as easy. A few years into that business one of my project managers did some research to break down all of the tasks, stages, and steps in our typical process. His results reported that based on our typical process, we were spending upwards of three times the hours than we were estimating for. I was highly skeptical, but the more I studied his work, and challenged his assumption, the more I began to see that not only was he right, he was probably underestimating, and wasn’t even considering client related bloat—which is always an inevitability.

I knew I had to solve this problem. But I had an even more fundamental problem making it harder to find a fix—I had no time data to mine in order to find ways to adjust our process. I had no idea what phases, or practices, or factors to evaluate and change. But one thing I did change, I immediately began requiring all of my employees to keep daily time records. Eventually, I was able to fix our process. But if only I had this data in the first place, I could have fixed things faster.

If there’s one professional practice I could insist upon for every creative entrepreneur to adopt from day one, it would be to start tracking their time. You never know when this data will become gold.

Of course if you bill by the hour you probably already keep a record of your time, in order to send invoices to your clients. But billable project time is not the only data you need. In fact, it’s often non-project time expenditures that erode the profitability of a creative practice. Those red, white, and grey legos—representing overhead hours—that we talked about in the second episode—they always put downward pressure on your bottom line.

And so you need to record all your time working in your business. Whether doing ballable work, or administrative tasks, or in sales and marketing. Having a comprehensive and accurate record of all the time you spend at work is a gold mine of intelligence that cannot be replaced if it’s not kept all along. You can’t go back and fill in your time days or weeks after the fact. No one’s memory is that good. The more immediately you record your time, the more accurate and valuable this data will be when you need it.

When you have months and years worth of complete and accurate time data you’ll have a precious and irreplaceable resource. By keeping this data, and more importantly analyzing it from time to time, you’ll be able to improve your workflow, estimate projects more accurately, and ensure that you’re giving sufficient attention to the non-project related aspects of running your business.

No one ever said that tracking their time was their favorite part of their job, it is admittedly a bit tedious. But the upside is well worth the effort.

I wonder though, if you have not maintained consistent time tracking in your practice, if the reasons have less to do with the inconvenience, and more to do with fears that being so time aware might harm your creative process? That is a common objection, or excuse, and next week I’ll address the objection that deadlines and time tracking kill creativity.

So until next week: don’t let the business of creativity overwhelm your creative business.