Profitability: How can you run a business both efficiently and profitably?
Software and Profit: How They Interact
Without solid technological bones to shape and support a business, it cannot thrive. That is, the software itself and a strong network infrastructure. The technology is a means, not an end. Although technology is the means to run an efficient, profitable business, it is through reporting, tracking different metrics, etc., that we can really determine the business’ overall profitability. Looking at profitability helps businesses begin to answer important questions: Are we getting our money’s worth in advertising? What is the realization of our billable time? Are we doing flat-fee work? If so, are we making money on it or losing money and why? By breaking down some of the key factors that determine and define a business’s profitability, I hope to show you how Circle Management Group can help you maximize profit for your business.
On a day-to-day basis, what sort of tasks are you and your fellow staff trying to accomplish? How many steps does it take to do something? How much time does it take to do something? How many hoops do you all have to go through to complete a task? How much time does everyone have to spend digging through files and looking for information? How much time is spent typing the same information more than once? Questions such as these measure the efficiency of a business. Using our knowledge of the back-end of your application, we can replace a thirty-minute search for documents with a custom query that takes five seconds to process. Additionally, we can program auto-fill options for matters, gaining back valuable time that otherwise may have been spent typing the same information multiple times. These are all tools that make your business run more efficiently. The more efficient you can be on a day-to-day basis, the more profitable you will be in the long run.
Fortunately, unlike 25 years ago, hourly billing is no longer the predominate way to get paid. For example, most businesses today are not as concerned with the question of how much time it takes to prepare a document as they are on the value of that document. If, using technology, a document is prepared in five minutes instead of an hour and a half the document still maintains its value. If you are doing most of your billing by the hour, technology can help you capture your time in real time. Several studies show that capturing your time as you go can give you as much as a 20% increase in billable hours. It can be productive from a fiscal and a personal perspective to accurately measure how much hourly time your firm is billing per billing cycle. Not only to compare profits from billable time and flat-fee work, but to have measurable figures to work with to ask yourselves: What is our lifestyle like? We track this closely at Circle Management Group. If we get to the end of the month and notice that we’ve had 150 billable hours and 300 non-billable hours, we know we’re doing something wrong and not taking care of ourselves personally. Work life balance is an important thing to me and I try to help my clients find that balance whenever possible. The peace of mind that comes with a balanced life is crucial to maintaining a sustainable business.
Reporting: How are we doing?
To be profitable requires real numbers to work with- measurable, concrete numbers that you can watch on a regular basis. Through dashboards and reporting, you can track relevant data in a way that financially supports your company and helps your business thrive. This may include tracking individual performances, one practice area’s performance, your firm’s performance overall, or any other method of statistical analysis. If you reach the end of the year and examine your yearly numbers, that’s history- unfortunately, you can’t recover much of that. Looking at it in real time throughout the year allows you to make real-time adjustments instead of waiting until the end of the year and saying, “we’ll do it better next year.”
These are just a few of the ways technology can improve both your day-to-day office life and your overall profit margins. At Circle Management Group, we can advise your firm individually to identify the technology and workflow combination that will best benefit your firm.