Are you a One Man/One Woman Band?

"If you can measure it you can manage it". This certainly applies to time.

Look at your business. Here's how to work out how much money you are losing every year.

The self-employed seldom work as little as 40 hours a week. Many work far more than 50. This is 2500 hours a year, of which some cannot be charged. Assume, for the benefit of easy arithmetic, that you can charge 2000 hours at a charge-out rate of, say, $35 an hour. Would you agree this should yield $70,000? You can also add a profit on materials.

Look at your last Profit and Loss Account (or Statement of Financial Performance), and you will see the total amount spent on overheads. If you are not quite sure how much this is, call us and we will explain on the telephone. Deduct the overheads from the $70,000 plus profit on materials and you have your possible income for the year.

Now look and see how much you actually made. The difference between the two figures is a measure of the amount you are losing every year. You can easily halve the loss. There are two ways to do this.

Make a habit of accounting for all your hours every day: Measure the number of hours you are losing in chargeable time every week, month etc. You may be horrified by this figure. Find out the biggest wasters and reduce them. A common mistake is driving all over the place getting things. Often it would pay to make more use of couriers, the post or the phone. When suppliers say, "you will have to come", insist that you do not.

Work out how long each job takes: Compare with the time you quoted or charged. Select the worst jobs and decide what went wrong. Change the way you do things so the mistakes are not repeated. Look at the best jobs. Can you learn ways to repeat the success? You do not need to analyse every job. The extremes are likely to tell you the most about your business.

Change your methods: Watch your income grow.