Are you getting your money’s worth for your time?
18 March 2014
18 March 2014
Do you ever feel like you’re always doing a lot more for the money you get? If you’re a small business owner or a freelancer, you could be right!
For every working hour that an average freelancer or small business owner bills a client for, they will actually spend an additional 30 minutes doing work that they won’t charge for, according to research carried out by FreeAgent.
FreeAgent’s in-house data lab analysed information from more than 30,000 of the company’s small business customers and found that – when users recorded the time they spent on work-related projects – every 90-minute chunk of time would only include an hour of “billable” work that they invoiced their clients for.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “We know that people who run small businesses work incredibly hard to make their ventures a success. But it’s still surprising to see how much of that hard work they effectively do for free.
“We found that when a small business owner works for 90 minutes on a specific project they will actually only bill their clients for an hour, which leaves a full third of their time that they won’t get paid for at all.
“Of course, this isn’t necessarily time that’s being wasted – as many small businesses will either invest some of their own personal time into the projects they work on, or carry out important admin they haven’t agreed to bill their clients for – but it may mean that they aren’t working as profitably as they could be.
“That’s why it can be very valuable for small business owners to track their time, so they can see how long they spend working and – more importantly – which parts they actually get paid to do…so they can see whether they need to make any changes that could minimise their unbillable time and increase their profitability.”