If you don’t have time to read this post (or finish reading it since you’ve already started) you really should finish this one. When I consult design firms I use a methodology I call the 5M Assessment. It evaluates the firm, or the freelance practice, from five vital perspectives Money, Measurement, Marketing, Management and Motivation. The first two relate to managing finances and keeping track of time.
It’s remarkable what you can learn about a firm by simply processing their balance sheets and income statements. Add the data of how many employees they’ve had on staff and the overall health of the firm becomes clear.
Financial underperformance is discouraging of course, but since most design firm owners don’t go into business to get wealthy it’s not usually a great shock. But evaluating money and time can reveal many stressors in a design business. Stresses from project schedules falling apart, over worked staff, failure to produce quality work, new business stresses–aggravated by desperate underbidding, chasing after overdue invoices, dealing with poor cash flow implications–all of these problems can be predicted and observed by just looking at the numbers–the dollars and hours talk.
Getting control over your time is going to require fixing profitability issues. Most of these problems can be observed from the raw data. The solutions are not as simple as observing the causes (that’s why there are 5 M’s not just two!). But the first step is seeing where the leaks are coming from.
Here’s some free advice–if you’re caught in a business management time sink–start down the path of getting control of your time by looking at your financials on a monthly basis. This does not take long (especially of you do it regularly). It just requires a smidge of fiscal self-discipline. Second, start tracking your time, all of it from every member of your firm–that includes your project time and internal time. (For some tips on implement that check out this post – The Details of Tracking Time.)
If you start measuring and evaluating your time and money the roots of your other problems with start to reveal themselves–and you’ll have some basic information for how to go about solving them. There will be more to fix, but this is always the best place to start.
Since you’re so busy (thanks for finishing this article!), I may be able to help you get started with minimal time investment on your part. I break my consulting into two phases, diagnostic and engagement. The diagnostic service will get your financials and time evaluated without having to dive into a full engagement.
Let me know if you want to evaluate that or talk a bit more about your design firm’s business management issues–assuming you have the time.