Billable Time for Small Business: Am I Doing Enough?

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How much time should you be spending on your billable work?

I grew up in a family of hard workers! My dad almost always had 3 jobs at once. And my mom regularly worked over 40 hrs a week.

On top of that, we were constantly on the road. When I was 6 WEEKS old, mom and dad started a traveling southern gospel quartet. (Wow! That explains a lot, doesn’t it? 😉)

Tina with her mom in gospel quartet

(That’s my mom holding me while singing!)

Giving mom 12 weeks maternity rest wasn’t even in the cards. Put that woman on a bus with kids in tow, and then have her sing on stage 4+ times every Thursday, Friday, Saturday, and Sunday.

The day my little sister was born my parents had a singing booked. My dad seriously asked my mom if he should reschedule or if she thought she could make it. 🤦🏻‍♀️

It’s not about just doing more things!

So, I learned from a very young age how to keep doing things. Feels like it’s in my blood.

And yet, in running a small business, I’ve realized that doing more doesn’t always equal more profits. For many years, it didn’t even equal more revenue. 😱

Recently, I had a conversation with a few profit first professionals about utilization rates. Sounds exciting, right? 😂

It was a good reminder that growing a profitable small business isn’t just about doing more things. We have to pay attention to doing profitable work. And, according to the profit first experts, we should be spending 80% of our time delivering work in exchange for profitable revenue.

I noodled on that for a bit because, wow, that doesn’t leave much time for other activities. It felt stressful. And I wondered if it might incentivize the wrong behaviors for people on my team.

While pondering the topic, I also remembered my days in call center analytics when I was first starting a career many years ago. An 80% utilization rate in a call center typically led to high hold times for customers. Not the best customer experience!

My team and I ran some numbers, and it was a great exercise. There were definitely opportunities to get more efficient. And yet, spending 80% of our time on “billable” work looked like it would degrade our client experience.

So, I called an expert, my Profit First Professional, Linda Stapf, with Stapf Financial.

You can listen in on our discussion here.

We talk about how 80% billable might not be the right number for service businesses like ours. And Linda shares her view on whether or not time tracking makes sense for smaller teams.

No matter where you land on billable time, a utilization review can help you identify where profits might be falling through the cracks. And that’s always a good thing for small business!

Here’s to growing more profit so we can do more life!

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