Episode #12 Transcription - How to Make More Money with Time Tracking Part I - Why & How to track your time

Welcome to the designers Oasis podcast. I'm your host, Kate Bendewald, interior designer, mama and CEO of a thriving interior design business, built on authentic word of mouth referrals. It wasn't that long ago that I stepped away from my corporate architecture job to build my own dream, one that would allow me more time with the people that I love, the ability to serve my clients at the highest level, and to make a great living. It wasn't always easy, and I've made my share of mistakes along the way. Fast forward to today, and I've learned a thing or two. This podcast is for you - the inspired, creative, ambitious, and let's admit it,  occasionally overwhelmed interior designer who shares this dream of transforming lives by transforming homes. Join me and my guests each week as we walk through practical ways to build an interior design business you love, and helps you transform your clients' lives. You can do this. 

Well, hello there, my friend. Welcome back. It is so good to be with you today. Today, we are talking about how to increase your project profitability with time tracking for your interior design business. So I know that's a mouthful. This is going to be a two part series, I started to outline this and I just had so much going I said, you know, we just need to break this up into two parts. So I've never done this before, I'm hoping that this format helps this information to be a little bit more digestible. So I want to give you a quick overview of where we're going. This today we're gonna talk about this is part one, why and how to track your time. I know such a sexy topic, right? Bear with me, folks. Okay? Listen, I'm gonna get into the all the whys and all that here in a minute. But tracking your time is so important. And I and I am in a lot of interior design Facebook groups, and I've, I've talked to a lot of people about whether they're checking time and what the rub is, and what makes it feel so hard. And I get it, I get it. It's not, it's not the most fun thing to do. But it's so important. 

So this is going to be part one where we're talking about why it's important and how to do it. And I'm going to give you some resources today. And then in the next part, part two, which will be next week is once you have this information, once you start tracking your time, you are going to be left with some information. And you're going to be able to now audit your projects. If you're not tracking your time, then you can't audit your projects, and the importance of auditing your projects so that you can look at what did you charge your interior design clients for the for the project? And how much time did it take and what's the difference there. And you're going to be able to have insights that you simply won't have if you aren't tracking your time. So once you get it once you understand how to track your time, and I'm going to help you do it as effortlessly as possible. Okay?

Then you're going to in part two, we're gonna talk about how to audit your interior design projects, so you can understand your profitability. And then if you start to see, gosh, I'm not as profitable in these projects, as I thought I was, you know, maybe you've been spitballing some of these things, it's okay, I get it, we're gonna fix that. But then I'm going to help, I'm going to share with you three ways that you can adjust and refine how you do business so that you can increase your profitability. And guess what, some of these suggestions, they're not only going to increase your profitability, but they're also going to be things that are going to give your clients a better experience working with you. So how's that sound? I'm excited. Again. I know this is not the sexiest topic, but it's really, really important. So today is part one, why and how to track your time.

Okay, so why, what is the importance of tracking your time? It's one of the most essential aspects of running any project based business or service based business. And it doesn't matter if you charge flat fee, you still need to know how you're tracking your time. time versus your estimated time. But here's the rub. The problem is, here's what people have told me over and over years, you after all these years, that they hate tracking time, they say it interferes with my creative time I forget, I get too busy, or I can't get my employees to track their time. Or maybe they do track their time, but it's not that accurate. And so often, maybe we're tracking all of our time, but maybe we're not billing our client for all of it. So I get it, this is not a sexy topic, but we're gonna, we're gonna help you set up some systems. So hopefully, you can set it up once and then it just starts to work for you. Okay, so here's the issue, though, if you're not tracking your time, you'll never know how profitable your interior design projects are, it's just going to be a guess, you won't have a good benchmark for estimating future projects. Okay, I'm going to say that when again, if you don't have these numbers, then you're not going to have a benchmark for estimating future projects. In the membership, and then in other areas, where I'm always talking to interior designers. Estimating for projects is one of the most difficult aspects of preparing client proposals. We talked about this for a couple of episodes. I don't remember the exact number, but I'll link to it in the show notes, where I talk about estimating. So you can go back and listen to that, if you want, I'll link to below.

But part of estimating comes from benchmarking, part of estimating comes from looking at historical data. Okay, how long did it take us to do a site survey on the Jones project? How long did it take us to put together a concept package for this kitchen design? How long did it take us to prepare for the installation, do the installation and then follow up with any of the loosens, those are the kinds of asset insights that you can understand when you're actively tracking your time. Okay, so a healthy project will have somewhere between a 40 to 60% profit margin, and we're gonna get into that more in part two next week. But that's just kind of a good benchmark to get you started. But you'll never know if you're not tracking your time. 

So today, we're going to talk about that, number one, what to track, it's more than just your hours, if you just say, oh, we'll the Jones project took 200 hours, and the Smith project took 125 hours, and so on and so forth. That's good. And that's better than nothing. Because, you know, you kind of know, well, the Smith project was a kitchen project and the Jones project was a, you know, whole home furnishings, whatever the case may be. But I'm gonna, I want you to get a little bit more detailed than that. So it's not just your hours, but we're, I promise, I'm gonna make it as simple as possible. Okay, so number two, three different ways that you can track your time. Okay, I'm going to give you some options. And I want you to just pick the one that you know you're going to do and the one that's going to work best for your business. And then I'll also share with you the one that I use. But what's most important is that you pick the one that you're actually going to use. And then number three, and this is where we'll wrap up in part two is how to go back and audit your projects at the end. And then what to do if your projects need to be refined so that you are more profitable. 

Okay, let's get into it. Before we even start talking about the nuts and bolts of how to check your time, we need to start with your mindset. This is about building a new habit. So if you need a mindset check, here's a quick question for you. Are you running a business or a hobby, if you're running a business, you and everyone on your team is tracking time period. If you're not tracking time, you've got a hobby, and you can just turn off this podcast and move on with your day. I know that sounds tough, but it's tough love. This doesn't have to be hard or complicated. It's one of the simplest ways to understand your profitability. So if you're still listening, that tells me you're serious about running a profitable interior design business. So let's get to it. If you're a one person show, here's what I want you to tell yourself. Just tell yourself, if I don't track my time, I don't get paid. It's that simple. If you have a team, you want to make it as effortless as possible for them, but also have them understand the importance. The health of the business directly impacts your ability to do things like provide raises or bonuses or do fun things as a team. So it can't just be about you it needs to be about the health of the whole business and and that will create a better environment for them. 

Okay, so how do you train your team once you and we'll get into how we track time and all of that, but but once you get that figured out, it's going to be important to bring your team along with you. So I would start with a team with a training meeting. Even if this is just one part time hourly The employee they need to know what to do, you're going to show them how to track time, and make sure they understand the different tasks and categories, so that they're not just tracking their time, but they're doing it accurately set the expectation that they need to be tracking their time, every single day. They can't wait till the end of the week. And they definitely cannot wait till the end of the month. And I can't emphasize this enough, it's not going to be accurate. And I'm not talking about we need to get down to the six minute but I am talking about this, if you're spitballing, you're not going to be having accurate numbers, you're not going to really know what's going on inside your business. So a couple of things that you can do is create daily reminders that go out to the team, maybe that's a text message, maybe that's a daily email, maybe that's a reminder that pops up. So the program that I like to use is called Harvest. I'll talk about more on that and more on that in a moment. But with harvest, you can set daily reminders, so that you and your team, just get a quick pop up reminder says hey, we're about to wrap up the day, make sure you enter your time that maybe you have missed.

Maybe you want to create a loom video and I highly recommend this a loom I've talked about this before, but it's a screen recording tool that you can use to record your screen and or video of yourself. And just do a quick screencast showing people how to track their time, save that video and every new hire should be required to watch the video as part of their onboarding process. Another option might be gamification. Gamification is a way to really encourage your team to track their time in a fun way. So think of some ways that you can reward team members who are regularly checking their time on a daily basis. Maybe you have a team reward for you know, if everybody on the team tracks your time, every single day for this whole month, we're gonna go you know, out to eat or whatever ways you guys might want to celebrate. But if you can find a way to gamify it that can make it less of a chore and make it more fun. But really just doing that off the bat so that you can help them build a new habit. And once they have that habit establish you as well, then it becomes easier and it doesn't feel like such a chore. I hate to say designer, have you ever wondered about the insider secrets of running a successful full service project? 

You know, all of that magic that happens after your big client presentation like ordering tracking project, managing and installing a project? Maybe you're asking yourself questions like, How do I keep up with the millions of little pieces involved with full service design? How do I manage client expectations, especially with the anticipated delays? How can I pitch the service or clients are willing to pay for it? 

Let's talk about what to track, I am always going to advocate for simple, but you do want to track a few specific things. If you really want to be able to estimate your time better for future projects, you need to break out some of the phases and tasks. So for example, I'm not interested in tracking things like how long was I on that phone call? How long did it take me to type that email? That would be mind numbing, I just can't imagine. Instead, we go a little bit more broad and and generally speaking, we track our time based on the phase of work that we're in. So concept design, design, development, project management, and so on. If you're just getting started, I recommend breaking out tasks into a little bit more detail while you're collecting data on health, how long things take you and your team to complete. So we used to do this and it was immensely helpful. But now after years of estimating our time for projects, we have some standards that we use for estimating. For example, we know how long a site survey will take based on the square footage. We know how long an end Install will take based on the scope of work, and so on and so on. So today, we only really track our time based on the phase of work we are in. But if simpler means you're more likely to track your time, then do that. But in the beginning, I am going to recommend that within each of those phases, concept design, design development, that you break out some of the the

categories into more detailed tasks. So I've created a printable for you, you can go to the show notes and find this printable that you can download, that's going to include these categories. So I'm gonna just outline a couple of those categories right here. But in the PDF, you'll get that plus some of those detailed tasks that you might want to check if that's the level of detail that you want to go in. Remember, do what works for you, do whatever, do it in whatever way is going to ensure you get it done. Okay, if you make it overly complicated, and nobody does it, then what's the point? Right? Okay, so here are just some of the few simple categories that we include. And we number them based on the category so that it goes kind of an order, so 1.0 2.0, and so on. So 1.0, project initiation, two concept design, three, design development, plus Reselection. So revisions, for procurement, five, project management, six installation, seven, post occupancy, and eight are added services. So services that were never included in the original proposal. And then we also have another one for travel. So very simple, you can head over to the website, designers voices.com, or click in the show notes to get the link to that PDF download. So, for example, let's let's talk about some of those detailed tasks. For example, if you're doing a site survey, or adding your client to your systems, maybe you're getting them set up an ID or design files or whatever project management system you use, creating their folder, you would put that under project initiation. If you are preparing your initial floorplans and moodboard. That's obviously concept design, and so on. 

So important, super important here. Even if you aren't breaking out the tasks in your time tracker. And you're simply keeping that higher level of design phases, it's really important that you and your team are clear on what kind of tasks belong in each category. So that PDF I'm providing will help you lay out the groundwork for that. Okay, let's talk about three ways that you can track your time, I don't believe in a one size fits all approach to running your business. So I want to share with you some different ways that you can track your time, spend some time deciding which method is going to work best for you. So method number one, a spreadsheet, it's the simplest and most cost effective way to track your time. Simply put, each row represents a client, and each column represents the day of the week. The benefit of a spreadsheet is its simplicity. And it's free, you can just use a simple Google Sheet to do that. However, it is the least sophisticated of these issues. And it can create a lot of work at the end of the month for reporting, paying people or invoicing clients. So a couple of pros and cons to the spreadsheet model. 

Number two, you can use any some of your existing project management tools often will have built in timers, for example, dubsado, Iv design files, even QuickBooks, if you use any of those, sometimes they those four that I just listed do have time tracking features. So you might already have a tool where you can use the built in timer. And the benefit of that is you're already paying for the software, okay, so you're not having to create an additional expense for yourself. The downside is personally, I have always felt that these fall short of the level of sophistication and ease that I prefer in my business. So the third method is using a time tracking specific hardware software. So harvest is the one that I use. I'm gonna talk a little bit more about that in a minute. There are others out there, I know toggle is another popular one. And I know that this is an added expense but number one, they're not too expensive and both have free versions if you want to try them out.

But to it helps prevent untracked and billable time that I would otherwise be losing. So I strongly believe that the money that I spend on my time tracking software pays for itself. So that's that's what I have found and I want to share with you now a little bit about harvest and how it works. I believe that toggle also has a lot of the same features so you decide if you're ready to to invest in a time tracking specific hardware you can look at which one It might be best for you. It's I'm talking about harvest, because it's the one that I use, and I'm the most familiar with. And I've had the most experience with, I have been with them for about eight years. At this point, I am in no way endorsed by harvest. And they are not a sponsor of this podcast, at least yet. So if you are listening to this, and you are an harvest employee, and you want to sponsor the podcast, shoot me a message. But to my listeners today, I am not endorsed by harvest, I'm simply sharing with you the tool that I use and why I think it works, there are other software out there that does similar things. So just find the one that works best for you. That said, I do have an affiliate link for harvest. So if you think this might be something that could be a game changer or problem solver in your business, you can use that link, and you'll get a free month free to try it out plus $10 off your first month if you decide to go with the paid version. So there's a few reasons why I like Harvest number one is its intuitive. So instead of going back and recording time, at the end of the day, I'm tracking it in real time as I'm working on something. So they have three different versions, and three different ways that you can track time, there's the web version, which is simply open a browser, click on your bookmark and click the plus button and say, Okay, I'm sitting down to work on so and so's concept design. And then the timer is going in the background. 

They also have a desktop version that you would download. And with this, and this is actually my preferred method, then at the top of your menu bar, and I'm a Mac user, but I'm imagining it's pretty similar if you use a Windows computer. But at the very top, there's always just a little timer and I click on it and it drops down. And I can say, you know, start the timer and say I'm working on so and so's project in this is what I'm working on. And then it runs in the background. And the best part and this is why it's intuitive. And it's simple. And I don't forget to check my time. First of all, I'm in the habit every time I sit down to work on a client's project, and I have this mindset, if I don't check my time, I don't get paid, I sit down and I know I'm always gonna start my timer. But let's say I get distracted, maybe I get a phone call from somebody that I need to take, maybe I get up and I run make lunch, and I'm gone for 30 minutes when I come and sit back down. It's gonna recognize that I've been idle. And it'll just pop up and say, Hey, I've been idle for about 30 minutes. How do you want to treat that time? Do you want to delete it? Do you want to apply it to the project, maybe I went over to my little, our little table over here. And we were actually looking at samples and pulling stuff from the library, in which case I was actually working on the project I just wasn't at my desk, you can decide how you want to treat that time. So that little pop up reminder is so helpful. 

And then the third way is with their mobile app. So the mobile app, if I'm going to a site visit or I'm doing a showroom trip, I can just you know, as soon as I get there, open up my mobile app, say this is the client time starts now. And then I get a little reminder a little bit later in the day. So I love that they have different options for how you might be working. I like the easy drop down menus, it makes it easy to indicate what categories I'm tracking. So that's something you would set up at the very beginning of setting up your software.

I like also that at the outset of a project, I can set up the budgeted hours for the project. Regardless if I'm charging my design clients hourly, flat fee or hybrid. So harvest does allow for this flexibility. So you might have some projects where hourly makes sense and others were flat fee makes sense. Or like we charge which is hybrid, having a program that understands that nuance, and allows me to set it up so that some tasks are billable and some tasks are not yet I'm still tracking my time. That's the kind of flexibility that I get with a software like this versus some of those built in time trackers. So something to keep in mind. And if you're an interior designer like me, you are most likely a visual person. So you'll really appreciate the easy to understand visual charts that help you see how you're tracking time so you can kind of see as a percentage, where you're how where you're headed. You can set up employees and contractors at different billable rates. You can track your your you and your team can track reimbursable expenses such as mileage and parking. 

You can set up alerts so if your project is reaching a certain percentage of hours you can get a notification just keeps you on top of things. You can set up automatic reminders for you and your team to track time such as daily or weekly reminders. Maybe you just want to do an end of the week reminder. I prefer the daily one but whatever you want. It's nice to know that you've got that tool built in. Now harvest I know integrates with QuickBooks, so you can generate reports and send invoices right from harvest, or you can export a summary of our Is and attach it to an invoice that maybe you create in QuickBooks or AVI or dubsado, or wherever else you might create your invoices. So I like that you can print those reports and either send them through harvest or through one of your other programs. And then finally, it integrates with a lot of apps including Asana, so I can start a timer from right inside of Asana if I want to. They also integrates with Google Chrome and Google Calendar. Those are the ones that I use, I know that there are more. So here, here's how I want to summarize this, I really hope that you have found this, this useful information. What's most important is, you know, finding a tool, that's going to ensure that you track your time and make it as effortless as possible. Again, it's not a sexy topic. But here's the thing about setting up systems like this, I set up my harvest eight years ago, and I've rarely touched it, since besides maybe a few tweaks here and there. 

When you take the time to set up systems like this, it can work for you and save you more time than you can calculate over the years. Think of your timekeeping software such as harvest, or toggle or whatever you use, as your CFO on demand your chief financial officer, it can give you reports, it can give you insights, it can give you analysis that is automatically reported. And you can just see it at a glance. So here is my challenge to you, my friend. Number one, make a commitment to decide you will prioritize time tracking for your business. And I don't care if that is a simple spreadsheet, if it's an existing software you're already using or if you want to go go straight to the sophisticated time tracking software, whatever it is just make that commitment to go ahead and do it and prioritize tracking your time, just do it Start for one week, you know, just do one week. And number two, if you have a team, get them on board, help them understand this is not just to line your pockets. But that when you have a healthy business, you can do more for them. Maybe once you know your profitability, you can start to do more fun things like pay for their yoga membership or take them to high point market.

And number three, invest in software that will ultimately pay for itself because you're going to have better insights that will help you make changes necessary to be more profitable. Again, I don't care what you use, as long as you actually use it on a regular basis. If you want to try harvest look for that link in the show notes for the free trial plus the $10 off your first month. And while you're there, snag your free PDF of the timekeeping categories for your interior design business. So next week is part two of this series. So now let's let's fast forward to, oh, a month or two or three from now on, you have been tracking your time, what do you do with those insights? So at the end of a project, we're going to talk about how to audit your time and gain valuable insights. And then what to do if you discover that you're barely breaking even. Okay, I want to make this as simple as possible, but as insightful as possible so that your interior design business is profitable, and healthy, and fun. Alright, thank you so much for joining me today. I'll see you next time. Thank you so much for letting me spend part of this day with you. If you're loving this podcast, please share it with a friend who you think might also love it. Or perhaps you can take just 30 seconds to open your podcast app and leave us a five star rating. And if you have just an extra minute, go ahead and leave a review. This helps me so much and it helps other designers like you to find the podcast. It also adds fuel to my motivation to keep making great episodes just for you. However you choose to help, please No, I appreciate you so very much. Thank you, my friend. Have a wonderful rest of your day and I'll see you next time