I hope you found last week’s conversation about wearing clothes that promote YOUR practice to be useful. If you’re not doing it, give it a try. It really is one of the easiest marketing tactics ever. My new BVA coaching polo shirts are ordered!
On to this week. Time, money & freedom: three things we generally want more of. Because they’re generally three things we think we don’t have enough of. If you want more time, money & freedom than you’re currently getting out of your practice, this conversation is for you.
And if you’re new here, welcome aboard. This is what we do!
One thing I found last week: If You Work More Than 50 Hours a Week, You’re Probably Not Getting More Done. Best lines from this article: “While productivity declines after 50 hours a week, it almost stops entirely after 55. Eventually, your brain and body simply can’t handle the load.”
My take: We wear the hours we work like a badge of courage. Yet, all the research shows working more hours is not productive. Why do we think we’re different from all the test subjects?
Rick Telberg, writing for CPA Trendlines, said: “The professional services industry is a lifestyle sector. Experts must decide how much they want to earn and how much they want to work. Then they shape their business around that.”
I bet you never thought of yourself having a job in the “lifestyle sector”! But if you think about your ability to create and control your revenue potential, it’s something not found in many other industries.
So with that in mind, what can you create and control to get the time, money & freedom you want out of your practice? Turns out, there are only five levers you need to push.
$300 per hour
x 5 hours per day
x 5 days per week
x 4 weeks per month
x 10 months per year
$300,000 per year
I know y’all are capable of doing the multiplication, so let’s focus on the key points.
The first lever is your hourly rate. $300 per hour may be low for some and high for others. Adjust accordingly.
You may think your hourly rate is mostly a function of the market you’re in. That’s true to some extent, especially if you’re a generalist. But if you’re a specialist, your hourly rate is more likely to be a function of the leadership position you’ve staked out in your practice area or industry niche. And if your type of client exists nationwide, so does your market.
My model assumes 1,000 chargeable hours, and I think $300,000 in billings is downright respectable. If you want/need more money but don’t feel you can’t raise your billing rate, you’ll need to work more hours. But not as many as you might think.
Because it is time, not money, that more easily slips through our fingers. How do I know that? Personal experience. And the cumulative results of my coaching surveys saying most appraisers generate 1,000-1,500 chargeable hours per year while working 2,000-2,500 total hours per year. Where is that delta of 1,000 hours per year going?
There’s only so much admin, CPE, marketing, and professional reading that can be done. My guess is that the delta arises from inefficiencies and ineffectiveness, some of which may be attributable to having a generalist practice. For example, the more you generalize, the more learning curve time you rack up that you feel can’t be billed. Otherwise, admin and CPE time is relatively low and fixed.
Because time is more important than money, the other four levers in my model are a function of time: chargeable hours per day, days per week, weeks per month, and months per year. The numbers, of course, are averages – an average of 5 chargeable hours per day … an average of 5 working days per week, etc.
But here’s what those four levers mean, on average:
- There are 3 hours a day, 5 days a week, 4 weeks a month, 10 months a year to do your admin, CPE, marketing, and professional reading.
- You don’t need to work 10-12-14 hours a day.
- You don’t have to work weekends.
- There is 1 free week every quarter to get away from the grind.
- There are 2 months a year to develop more expertise, create that keynote presentation, write that book, or take vacations.
In real life
You want more time? Be disciplined how and where you spend it. You want more money? Improve your positioning and deliver more value so you can charge more per hour. Put time and money together … and you get your freedom!
Time, money & freedom. What would you do with more of each?
– If you like what I write about, tell a colleague.
– If something resonates and you want to reach out directly, email me.
– If you think we share common interests, connect with me on LinkedIn.
– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.