Maximizing the Percentage of Billable Hours Weekly for Consultants

For consultants, time management ranks as one of the top ten priorities in running their businesses. They focus on how many billable hours they can accrue each week. How can consultants carry out marketing activities, handle general administrative tasks, do the necessary accounting for their practices and still manage to maximize the number of billable hours each week? Benjamin K Jackson, Ph.D, a Senior Engineer at Aptech Engineering Services, in Sunnyvale, California has developed a very effective analysis matrix to get a clear sense of how well he is currently utilizing his time and what he needs to do to effectively increase the percentage of time each week he devotes to billable time.

Dr. Jackson's job description involves both his duties as an engineer and his role in bringing in new clients each year for the company. He also must deal with his share of paperwork that goes with the job. So, like all of us who are consultants, he is juggling these competing demands on his time. Approaching this challenge from a very creative angle, he has developed his own strategy for maximizing billable hours, while at the same time handling the other action items on his agenda in a timely manner.

THE RULES OF THE GAME:

This strategy lays out a few rules one has to follow to achieve one's time management objectives:

• Work no more than 10 hours a day. After 10 hours on the job, we are no longer capable of effectively being productive that day.
• Utilize a time-management Excel Matrix to track how we actually use our time, breaking our consulting activities into four categories: (1) activities which produce billable hours, (2) marketing and promotional activities, (3) accounting activities, to track revenue generated and expenses associated with consulting activities and (4) other necessary administrative activities, which are treated as overhead expenses.
• Assign client numbers to each client. Also assign a project number for each of the projects you do for this client. Combine this information into a single code that includes both the client number and the job number:    xxxyy, where xxx = the client number and yy = the job number. Example 03201, where 032 = the client number for the XYZ Company and 01 = project 1 for that client. [A code like this one will enable us to create another analysis matrix to analyze which of our clients are productive for us to keep and which are going to be only marginal sources of revenue.]
• First, track our activities on a daily basis, establishing cumulative daily stats for the weekly tracking, with breakouts for each of the four major areas of activity. The analysis should establish what percentage of the time that day represented billable hours, overhead activities, marketing activities and accounting activities. 
• Next, to track our activities on a weekly basis, creating a separate report for each week. The analysis should establish what percentage of the time that week represented billable hours, overhead activities, marketing activities and accounting activities. 
• Be brutally honest in how we utilize time each week, so that the resulting analytical reports at the end of three months, will have validity and present a true picture of our time usage over that period. 
• Track time usage weekly, but delay making any substantial changes in the way we organize our schedule until at least one month, giving us enough time to gather enough data to recognize any trends in our time scheduling. 
• Make no overriding assumptions about how well we manage time until we have used this strategy for at least three months. After 3 months, we can run a valid analysis of our strengths and weaknesses in managing time. Then we are able to refine scheduling of action items and substantially raise the overall percentage of time we devote to billable hours. 
• Then, based on these analyses, set benchmark goals for realizing a certain consistent percentage level of billable hours weekly, for a fixed period into the future. 

The primary objective is to maximize the cash flow into the company, boosting the revenue the consulting practice produces each year. Additionally, a consultant can study the annual statistical data produced to determine if there will be predictable fluctuations in cash inflow during the year. Different specialties in consultancy will experience different patterns of fluctuation. Also, these analyses can also assess the percentage changes in any of these four activity areas, brought about by internal or external factors, such as reporting requirements by the government or changes in the economy or the business environment. 

I have built a programmed matrix template to track daily activity, based on Dr. Jackson's model. I have also built a second programmed matrix template to track activity on a weekly basis. The two templates are used in conjunction with one another. If you would like to have these templates uploaded to you, please contact me at: the email address listed at the end of this post . When requesting the templates, also request the instruction sheet for utilizing these two spreadsheets. 

A consultant needs to know what percentage of the time he or she is working is producing billable hours. The data the spreadsheets provide enable us to recognize the pattern of time usage over a prolonged period of time. With the derived data, a consultant can identify the problem(s) that are costing him/her valuable time. Then mid course corrections can be made and time which had been lost to action tasks that produce no revenue, can be redirected to generate increased income, instead. 

Many thanks to Dr. Benjamin Jackson for sharing his idea with us. 

Please contact me if you have any questions about this strategy for more effective the time-management function of our companies.

Howard Fireman, Productivity Consultant, E-mail:  howard.fireman46@gmail.com