As freelancers, our time is worth money.
Each new project requires a certain number of hours, and since our time is limited to 24 hours a day, every minute counts.
One of the ways freelancers figure out how much they should charge for a project, is by estimating the number of hours the project will require, and then multiplying that number of hours by the hourly rate they charge.
Track your time
To put simply: Time Estimate (x) Hourly Rate = Quote.
We’ll talk a lot more about how much you should charge per hour in a later post, but for now, you can refer back to How much money your skill is worth.
The tricky part about this method is knowing how to estimate the amount of time the project will actually require.
Hopefully, this post will help with that dilemma.
Total time for each task = project time
The first step you should do when trying to estimate the number of hours the project will require – is breaking down the project into achievable milestones.
Then, estimate how much time you’ll need for each separate task.
As a reminder, we talked about defining milestones as part of the 7 actionable steps to meet your deadline.
Once you have a list of hours you think you’ll need for each task, add them up for the total estimated hours.
So now our equation will look like this:
Total time for all tasks = Total project time estimate.
Total Time Estimate (x) Hourly Rate = Quote.
* When you think about how much time you’ll need for each task, remember to include time for working on revisions and changes that the client might ask for.
Ok, so that all sounds nice and easy, but – it still doesn’t answer the tricky part:
How do I estimate the number of hours I'll need for each task?
Estimate time based on experience and data
The easy answer to the question is this – the more times you’ve worked on a certain task, the better you’ll know how much time it will take.
Or in other words, the more experience you have, the better you’ll be at estimating time.
Which if true, means that the basic principle of ‘Time Estimate (x) Hourly Rate = Quote’ might not be the best approach for freelancers who are just starting out. New freelancers will find it hard to estimate the amount of time each specific task will require.
But no matter if you are at the beginning of your freelance career or have been doing this for a while, keep reading.
If you’re new to freelancing, the tool I’m going to share will help you gain insights into how much time you’ll need for each task.
If you’ve been freelancing for a while, this tool will help you improve your estimates, and also has the potential to boost your productivity.
The best tools for tracking time
When it comes to time tracking, the best and most useful time trackers I’ve found is Toggl.
Toggl is extremely user friendly, looks great, and most importantly – gets the job done without being distracting.
Toggle has a forever free plan for the basic time tracking features.
With the free version of Toggl, you to can track time based on task, project, and client. You can also create reports, add project tags, access a personal dashboard that gives you a quick glance on the hours you worked during the week….
All of that’s more than enough for what you need to get started.
Once you set up your free account, adding a new task in Toggl is super easy, and only takes a couple of seconds – type a task name, select the project, select the client, click start.
Once you’ve tracked your time, you can head over to your personal dashboard and get detailed reports on your work hours using three different metrics: per project, per specific task or per client.
If a client asks you to produce a timesheet of billable hours, you can quickly create and send a detailed report (PDF or Excel).
The 3 main reasons why I track time.
I track my time not only when I work on hourly based projects and need to produce a timesheet (so my client knows how much to pay me), but also when I work on fixed price projects.
There are three main reasons why I track time even if I’m working on a fixed price project:
- It provides data and improves my knowledge on how much time each task requires.
- Knowing how much time each task requires can help me both plan my schedule better, and determine whether or not I will have time to take on a new project.
- Tracking my time helps me stay focused and more productive because I want the data to be as accurate as possible, and having that mindset stops me from procrastinating.
The more data I have on the amount of time I need for certain tasks, the better I will be able to estimate project costs, and arrange my schedule in the best possible way.
A few examples of other things I try to track besides specific work for clients:
- Answering emails
- Working on blog posts
- Developing new products
- Accounting tasks
- One way to offer quotes to your clients is by estimating how much time you’ll need for the project, and then multiply that number of hours by your hourly rate.
- Instead of trying to determine total project time, estimate the time required for each task and then add them up.
- The more experience you have the better you’ll be able to estimate how much time each task requires.
- Using tools like Toggl (or a timer & notebook) will help you gain insights and collect data on your work hours.
- The more insights you have, the easier it will be to plan time in your schedule for certain tasks and know when you can take on more work.
I hope that this post helped you understand the value in tracking your time, and showed you a simple way to do it.