Every business sells something.
For many businesses this "something" is a physical object. For instance, when I was 16 I worked at a deli in the North East. We sold things like sandwiches, coffee and soda.
What do you sell?If you are reading this blog most likely you provide some service. In essence you sell your time.
Back at the deli (or any business that sell physical goods) a regular inventory was kept. This helped to keep track of ordering needs, but also could be used to make sure that product wasn't getting stolen and to otherwise double check sales numbers.
Do you keep an inventory of your time?To do so you need to keep track of 2 basic things.
- Time Coming In (X)
How many hours are you going to work a week? If you have a set 40 hour schedule, then your business "receives" 40 hours every week. If you don't have a set work schedule, then you will need to track how many hours you spend "working" (whether you actually are or not).
- Actual Time Sold (Y)
Simply keep track of your billable hours.
You had X hours come in, and although all X hours are now gone from your inventory - only Y hours were sold.
At the deli it wasn't expected that every single item would be sold. Some inventory items were required to keep things running: bags, napkins, condiments, straws, etc. Also, the employees were allowed free drinks and food while on the job. That was a perk. As a 16 year old guy free roast beef sandwiches were more important than 401K plans!
Likewise, you shouldn't expect that you will be able to sell every hour of your inventory of time on a weekly basis. You have other non-billable tasks to take care of and the occasional job perk (time you use freely as you please). But by regularly reviewing these numbers it can reveal disturbing trends.
What does your inventory reveal?Does your inventory analysis show that you are losing an unacceptable amount of time to non-billable activities? Are you being robbed blind? If so, you may need to put forth some serious effort to identify those time thiefs and develop a security measures to protect yourself against them.
Finally by recording these numbers on a long-term basis you can analyze larger trends. Are your billable hours going up, down or staying level over the last 3 to 6 months? By introducing new Product-X or Methodology-Y what was the impact on your billable time?