How to Measure and Evaluate Yourself and Your Work

Photo by padsbrother.

One of the problems with becoming a freelancer is that there’s no longer anybody watching your work, your progress, your ability and efficiency. Sure, there are clients bugging you about their projects, but who’s really evaluating your little operation?

I’m sure many freelancers are more than happy to be rid of the annual review, but it’s easy to get sloppy and miss opportunities when you’re not looking at your work, measuring your progress, and implementing changes.

Let’s take a look at a few metrics that are useful for spotting trends and problem areas, and how to track them.

Time worked per project

It’s a good idea to track your time, and not just how much you work, but how much you work on each project. Which ones are you getting stuck on for hours, and which are you able to complete efficiently? You can use this metric to find out which activities need optimization, and also to find out which jobs can be done quickly and thus are often good candidates to take on more of (unless they’re quick jobs because they’re small, low-paying jobs).

Money earned per project

Unless you’re working on multiple projects from one client and track your finances by client and not by project, you’ve probably got this information. If you don’t, you’re probably not doing much business bookkeeping!

Keeping a record of how much money you earn from which projects gives you an insight into which of your jobs pay best, which type of jobs pay best, and which clients pay best. This is all handy information when you need to prune the client tree or are looking to optimize your business in general.

Cross-reference: Money and time earned per project

You can take the above metrics and combine them, using a spreadsheet or better still a graph, to see where time and money are working most efficiently for you. If you’ve got work that pays poorly yet consumes large chunks of time, you might want to drop it (unless it pays for itself in marketing benefits or you just genuinely love doing it).

A graph is possibly the easiest way of visualizing where most of your money is coming from with the least demands on your time. Finding and increasing the quantity of jobs you have where the cash is good but the time is short is a great way to optimize your business.

Software for tracking time and money

I use Billable to track my time, and even better I can track money using the application as well. However, I treat the cash tally in Billable as a rough guide and use the Excel spreadsheets my wonderful bookkeeping wife maintains to do my final time-to-money comparisons.

New leads per month

New leads per month doesn’t tell you much about whether your marketing is actually succeeding at the bottom line, but it does tell you whether you’re getting bites and interested parties in the door. It simply answers the question: are my marketing campaigns getting people to notice me?

New clients per month

It’s the new clients per month that tell you how effective your marketing efforts actually were at the end of the day. If you’re getting heaps of leads and only a few new clients, it’s telling you that the marketing process is fine, but the “sales” process (for lack of a better term) is suffering. You need to find better ways to convince people that you’re the right person for the job.

Failed leads per month

The practical and useful result of this statistic tells you similar information to comparing your new leads-to-new clients ratio, but it allows you to see more clearly how much your sales efforts failed (or succeeded). Also, the new leads-to-new clients ratio doesn’t take into account the new leads who have not yet made a decision, and comparing your new leads with your failed leads lets you see that slightly clearer picture.

Lost clients per month

Did you lose any clients in the month? If you’re losing more than a normal amount, you’re either delivering a poor product, delivering it late, charging too much, or not maintaining relationships with your clients effectively. If this number is high you’ll need to do some research and figure out what exactly it was that went wrong and improve that area of your business.

Number of new jobs per month

How successful have you been in acquiring new jobs? Ideally, this number needs to be higher than your new clients figure, because that means you’re getting work from those you’ve worked with before or you’re able to sell multiple projects to new clients. Good work, if so. If this number is low, you might need to see what you can do to improve relationships with existing clients who aren’t ordering new services from you.

Number of new jobs by source

How many new jobs did you acquire this month from existing clients, and how many from new clients? If you’re consistently getting repeat jobs from existing clients, it may be time to ramp down your marketing efforts (though you shouldn’t stop them altogether) and focus more time on your top-earning clients. They may be your future, and you may be able to expand your client base from their referrals alone. On the flip side, if you’re not making enough cash to survive comfortably yet and this graph indicates most of your new jobs coming from clients you’ve already charmed, it is yet another indicator that your marketing needs to be ramped up.

Overall hourly income

Having an idea of your overall hourly income comes in handy for more reasons than I could list here. First, it’s simply good to know. You work hard, and you want to know if you’re really getting value out of all that work. It ensures your marketing and maintenance time isn’t consuming too many billable hours and reducing your cash per hour to an unacceptably low level, or even worse, incurring a loss.

You get this figure by taking all the hours you’ve worked in a period—billable and non-billable—and the cash you’ve earned in that same period, and dividing them.

Output

I like to know how much I’ve produced in a given billing cycle. I can either pat myself on the shoulder for being highly productive, or it might reveal that I need to get my productivity skills up to scratch and get my ass into gear. Output is your currency, it’s what you trade with. Being able to produce more, more quickly, means you can earn more.

By output, I mean the amount of work you’ve produced using your industry’s standard measurement. For writers like myself, this means words. For web designers, it might mean pages, or entire sites (I’m guessing here!). Every freelance industry has some sort of output component; if you’re a freelance marketer, your output may be the increase in sales for a client. That’s not output in the same sense that words written is, but it’s equally useful.

Also useful is dividing your output by time spent and by cash earned. If your output is low but you only worked for an hour and made $50, your problem isn’t creating enough!