The Single Tactic I Used to Increase My Client's Profitability by 20%

If you're here expecting to learn some flashy "trick" to skyrocket your profitability, I'm going to disappoint you.

This tactic isn't glamorous.

It's mundane. It's time-consuming. And honestly, my clients hate me when I first bring it up.

But here's the kicker—they end up loving it because it works.

It adds tens of thousands of dollars to their bottom line without selling anything new to a single client or hiring extra help.

So, what's this magic solution?

Time tracking.

Yep, time tracking.

If you're not tracking your time, you're losing money—period.

20% profitability increase

Let me share an example. I recently worked with an SEO agency and asked them to track their time for just two weeks. We then spent an hour analyzing the results and identifying bottlenecks. Two weeks later, their profit margin had jumped by an astonishing 20%.

Wondering how time tracking can lead to a 20% boost in profitability?

Here's the deal:

Your business profitability hinges on three critical factors:

1. Prices: The more you charge, the higher your profit.
2. Costs: The less you spend, the higher your profit.
3. Efficiency: The more efficient you are (keeping your cost and pricing structure the same), the higher your profit.

Most businesses focus on raising prices or cutting costs, but few concentrate on improving efficiency.

If you're spending time on non-revenue-generating tasks, you won't scale profitably.

Similarly, if you're focusing on tasks your clients don't value, you're wasting your time.

Take the common practice of creating detailed reports and holding weekly meetings to present them.

Most clients aren't interested in extensive data and analytics; they care about tangible outcomes—how much they spent and how much they earned. That's it.

If you're investing time preparing in-depth reports that your clients don't care about, you're wasting both your time and theirs. Time that could be better spent acquiring new clients.

2x Revenue

Speaking of client acquisition, let me give you a real-world example.

I worked with a marketing agency that was struggling to scale due to their lengthy client onboarding process. Their onboarding took 4 weeks, mainly because their process was manual and inefficient. Their team, costing them $9,000 per month in salaries, could onboard only one client per month.

We decided to track every minute spent during the onboarding process over two weeks. By analyzing this data, we pinpointed bottlenecks—tasks that were taking too long or could be automated.

Here's what we discovered:

• Manual Data Entry: Team members were spending hours inputting client information into various systems.
• Redundant Meetings: Multiple internal meetings were held to discuss the same client details.
• Inefficient Communication: Email chains were causing delays and misunderstandings.

We implemented automated workflows, standardized documentation, and streamlined communication channels:

• Automation: We introduced tools to automatically capture and sync client data across all platforms.
• Standard Operating Procedures (SOPs): Created clear guidelines to reduce the need for constant meetings.
• Centralized Communication: Adopted a CRM system to keep all client interactions in one place.

As a result, we reduced the onboarding time from 4 weeks to just 2 weeks.

What did this mean for their bottom line?

• Capacity Doubled: With the same team and operating costs of $9,000 per month, they could now onboard two clients per month instead of one.
• Revenue Increased: Assuming each client brings in $10,000 per month, they went from earning $10,000 to $20,000 monthly.
• Profitability Boosted: Their operational costs remained the same, but their revenue doubled, significantly increasing their profit margins.

All this was achieved without hiring additional staff or increasing expenses—just by improving efficiency through time tracking.

Here's how I approach analyzing time tracking:

• Use a simple Google Sheet or a time-tracking app like Toggl to monitor time spent on each task.
• I note down:Tasks/projectsType of activityClient nameTime spentHow it made me feel—heavy or light

That last part gives me qualitative information. It helps me see if I'm spending too much time on tasks that feel heavy—tasks I don't enjoy or that don't add much value to my business.

A simple Google Sheet works just fine. You don't need anything fancy unless your day is packed with tons of small tasks. In that case, using Toggl or something similar might be helpful.

(And if you're busy working on small things, then you've got a bigger problem to fix.)

If you have a team, it might be easier to manage time tracking using an app or tool. You can also utilize features built into project management apps like Wrike or ClickUp.

Assign a dollar value to each task based on its ROI. Not all tasks are equal. It's easy to waste hours on $10-per-hour tasks when you could be tackling $1,000-per-hour tasks.

Reorganize your week so you spend most of your time on high-ROI tasks. Focus on the tasks that move the needle the most.

Now, how many $1,000 tasks are sitting on your to-do list while you're bogged down with $10 tasks?

Implement the D.A.D framework: Delete, Automate, Delegate. Focus on high-ROI tasks.

Calculate your hourly break-even rate.

Anything below that rate should be deleted from your list, automated, or delegated to someone (like a VA) who has a lower hourly rate than you.

For example, I value my time at $500 per hour.

This lets me laser-focus on activities that grow my business and makes delegation decisions easier and faster.

Here are some benefits and impacts of time tracking on your profitability:

• Unveiling Hidden Costs and Gains: By meticulously tracking time, you uncover hidden costs associated with specific tasks or projects. This helps you price your services more accurately, ensuring you cover your costs and maintain a healthy profit margin. It also reveals which clients or projects are more lucrative, guiding future business decisions.
• Efficiency and Productivity Boost: Time tracking enhances efficiency. By analyzing the time spent on various tasks, you can identify time drains and productivity killers. This insight helps eliminate or automate low-value tasks, freeing up more time for high-ROI activities. The data also aids in setting realistic deadlines and expectations, boosting overall productivity.
• Better Decision-Making: With precise data from time tracking, you can make informed decisions swiftly. Whether it's about taking on a new project, hiring additional staff, or investing in automation tools, understanding your time allocations and the ROI of different tasks empowers better decision-making.
• Improved Work-Life Balance: Tracking time ensures you're not overworking yourself or your team. Maintaining a healthy work-life balance isn't just good for mental and physical health; it sustains long-term productivity and job satisfaction, which positively impacts profitability.
• Smart Delegation: Accurate time data helps you identify which tasks should be delegated to free up your time for high-value activities. It also helps determine what tasks can be outsourced or automated, reducing operational costs and increasing profitability. Remember the D.A.D framework.
• Profitable Project Management: Integrated time tracking in project management apps like Wrike or ClickUp provides a holistic view of project costs, helping keep projects on budget and ensuring they're profitable.
• Strategic Planning for Growth: Over time, data from time tracking becomes instrumental in strategic planning. Understanding the time investment required for different tasks and projects facilitates more accurate forecasting and growth planning.

Time tracking might not be the most exciting strategy, but it's a game-changer for your profitability. Give it a try—you might be surprised at the difference it makes.

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