Profit Per Client Per Hour
Why I Obsess About My Hours
The first two years of my firm (with only two clients), I charged hourly…$50/hr. I was so proud of myself. ::rolls eyes::
After that I quickly learned the error of my ways (thanks to wise voices like Geraldine Carter and Jonathan Stark) and jumped on the fixed pricing model, never looking back.
Today, surprisingly, I still obsess about tracking my hours, despite the data never going anywhere. For context, what I know about myself is that I am amazing at accomplishing goals when I have the accountability of a tracking mechanism.
Lost the baby weight by tracking WW points.
Completed a triathlon by tracking my workouts.
On the road to being financial independent by tracking our spending and saving.
At this point, I know how to manipulate my own actions. Track them.
Because keeping my work hours below 15/wk is really important to me from a #lifegoal perspective and general mental health while I navigate parenting in this season, tracking my hours is my solution to hit this goal.
It’s not fancy. I track it in an unimpressive Excel spreadsheet that stays open during my work day. It looks like this:
BUT…here’s the added benefit of tracking my hours at this level…
It allows me to look at my clients like this:
With this view, I can tell you exactly how much each client’s Profit per Hour is for each month or year (last row).
From there, I have a clear view of the outliers, and it forces me to ask questions like:
Why is this client taking so much time?
Do I need to implement a more automated process for this client?
Is this the type of client I want on my roster?
Is there anything I’m doing with this highly profitable client that I can implement with other clients?
Why am I paying for this client’s payroll subscription fees?? (yikes)
It’s been a journey of refining my processes to make them more efficient and cull non-ideal clients, all leading to a more profitable, lean firm.
And that, it turns out, is completely worth all the obsession of tracking my time. :o)
Cheers,
Erica
PS - I found out yesterday that the “The 15 Hour Accountant LLC” was officially approved by the state of Idaho! Stay tuned…