Factoring Blog - For Small Businesses

Courtesy of the blog at Paymo, a time-tracking software application, I came across the Better Projects blog, which lists important reasons to do track time on projects and deliverables. One recent post, Good reasons to do time tracking, you’ll find this point

There are many reasons that time tracking is important. In order to make strategic decisions, you need data. The only place to get data that can be aggregated is to have the detail that rolls up. The types of decisions that have been made based on the time tracking data I’ve collected over the years include:

* Staffing - Several people avoided layoffs because I could show exactly what they were working on and how long they spent doing it. We also could show that we needed more people in order to do additional projects in the time frame management required it.

* Project delivery dates - Because we had good historical data on actual times vs. estimates, our estimates were given more credibility by management. Instead of management insisting on an unreasonable delivery date, they accepted ours.

* Planning when new projects could be started - When management saw that staff was fully loaded for the next few months, they reprioritized their projects to fit the staffing schedule.

I would add one point to the above: without tracking time, in a service-based business you may not have accurate financial projections and budgets.

Service-based businesses that essentially sell time (law firms, consultants, engineers, marketing, software development, Web design firms, etc.) need to be aware of time spent on offerings on a unit basis. Otherwise, you’ll never understand your true cost structure. What’s more, you won’t have a real handle on the upper limit of your revenue growth or what it will take to grow.

With all the scandals in the field of economics, it is positive to see a bank with sound ideas. Here is an excerpt from a statement by John A. Allison, Chairman and Chief Executive Officer of BB&T Corporation:

BB&T is a mission-driven organization with a clearly defined set of values. We encourage our employees to have a strong sense of purpose, a high level of self-esteem and the capacity to think clearly and logically.

We believe that competitive advantage is largely in the minds of our employees as represented by their capacity to turn rational ideas into action towards the accomplishment of our mission. (Our Philosophy, BBT.com)

Recently, the bank donated $2 million to the department of philosophy at the university of Texas. “The gift will be used to support research on Ayn Rand’s philosophy of “objectivism” for 10 years.”

It is an ongoing debate in academia regarding educational donations and if you the donor should include “attached strings” to the donations with stipulations on how you should use the money. Here is a quote from Craig Biddle’s article, Charlotte Observer Editorial Opposes Academic Freedom Regarding BB&T Grants.

Donating money without strings to universities is not noble; it is irrational and irresponsible. Nor does the attachment of strings to a donation in any way violate the autonomy of the recipient (be it a professor or department or university); he (or it) remains (and should remain) free to accept or reject the offer.

In sum, this is how educational donations should work: Professors and universities seeking funding for their courses should say—and be free to say—in effect, “Here is what we want to teach, and we will accept donations to teach it.” Likewise, businessmen and corporations who want to support higher education should say—and be free to say—in effect, “Here is what we would like to see taught, and we’re willing to donate money to those who are willing to teach it.” To argue against this approach is to argue against academic freedom and moral responsibility. (Capitalism Magazine, 03/31/08.)

What do you say?