If you’re a freelancer and your goal is to thrive in your profession, it really doesn’t make much sense to rely solely on project management tools.
Throughout this article, I’ll explain exactly why that is.
Project management, and the tools that perform this function, simply cannot help you get ahead in your profession. At best they can put you in a position to finish projects on time.
Could this be defined as “thriving” in your profession? The temptation to answer “yes” is very strong, I know. But that would be like saying that anyone who can throw or catch a ball can play in the big leagues.
ROI management is a whole other ballgame, and now I’m going to show you why you simply cannot do without it.
What is ROI management?
The term ROI means, specifically – “return on investment management.” From a freelancing perspective, ROI management tracks and analyses, in a systematic and conscious way, exactly how, and how much, each activity earns.
This is because, as professionals (or entrepreneurs), every new project we open and every task we complete is, essentially, an investment. We are in fact investing our time.
ROI management essentially means being aware of how much time is being invested in certain projects compared to the revenue those projects earn for us.
It is a much more conscious approach to one’s profession, to managing one’s time and – last but not least- to project management in general.
In essence, you can manage your ROI over time periods (single days, weeks, months) as well as over individual projects. Let’s see how in detail.
ROI management over time
Whenever we plan our daily activities, we should clearly see on one hand the value of each individual activity we are planning and on the other hand the daily budget we need to achieve to stay on track with our revenue goals.
This is because every time we occupy our time with projects and tasks, we are taking away time that would be available for other projects that could potentially be even more profitable. In fact, every time we plan we generate an opportunity cost. We could have planned other activities, perhaps ones that are less urgent but they bring in bigger margins.
Let’s look at a practical example together.
Let’s assume our annual turnover target is €50,000 and we are in the habit of working 7 hours a day, 5 days a week, with 26 days off throughout the year. This means that we need to achieve a daily budget of €245, a weekly budget of €1,225 and a monthly budget of €5,390.00. Simple mathematics.
More specifically, what does reaching a budget of €245 a day mean? It means that if we want to reach our goal, every day we have to deliver a value of at least €245, i.e. we have to plan tasks with a total value of at least €245.
Only by managing these values on a daily basis will we be able to be truly aware of our goals and how to achieve them. By knowing the value of
each task, and the budget that needs to be achieved, we will be able to decide what we should plan for during our days. We will finally be at the helm of our professional growth.
ROI management on individual projects
Just as individual days have a budget to achieve, each individual project has a budget that should not be overspent. Managing the ROI of individual projects is just as important as looking at the ROI of individual days: they are two sides of the same coin.
If managing the day’s ROI means tracking the value of individual tasks and scheduling them to achieve a daily budget, managing the ROI of individual projects means monitoring the progress of the budget throughout the project, its relationship with the time invested in that project and how that budget is then translated into a turnover.
Again, let’s look at a practical example together.
For example, let’s say we have a project with a budget of €5,000, and our benchmark hourly rate is €50. This means that if we want to make this project profitable for us, we need to complete it within 100 hours.
[Small aside: the benchmark hourly rate is the rate you need to work at to hit your revenue goals. Like the daily budget, this is also a concept that belongs in the universe of ROI management.]
To make sure we hit our revenue targets, we should never go below the benchmark hourly rate threshold. This means that we must always be aware of how long it takes to complete each task and how this time affects the overall project budget.
If, for example, we notice a progressive decrease in our hourly margin, i.e., we are not able to complete the required tasks within the established estimates, we will likely need to
make broader estimates. If these broader estimates then lead us to overspend the overall budget, if we want to stay within our goals we should ask for extra hours from our client, or at least re-discuss the agreement.
In this case, ROI management also means having the strength to impose one’s own modus operandi on one’s clients: when, for example, we notice excessive requests compared to the agreed budget, the best way to safeguard our investment in terms of time is to renegotiate the budget.
If, on the other hand, we see a large margin, i.e. we always complete our activities within the estimates that we made, it means that the project is doing great in terms of ROI and in all likelihood we will always have to give it a priority in terms of planning, as we manage to finish the activities well in advance and we are therefore saving time that we can invest on other things.
ROI management and project management
ROI management is a comprehensive approach to the day-to-day of one’s profession, and it is much more rounded than the concept of project management alone. Project management basically means making sure that every project is delivered within a certain deadline and that it meets certain requirements.
There are dozens and dozens of digital platforms that allow us to manage our projects in a simple and efficient way. For example, Asana, Toggl, Meistertask, and Trello – but I could cite many others.
All of these tools do a great job of managing your tasks and projects, but they don’t do ROI management at all. In fact, they don’t even ponder the question. Whoever created these tools probably doesn’t even know what I’m talking about.
This makes a lot of sense. Project management software is not designed for freelancers to thrive . . . it is simply designed to manage projects. In the last lines of
In this article, I explain why Taskomat™ is not only the best ROI management software – it’s practically the only one.
What differentiates Taskomat™ from the above-listed platforms and the like is that it hones in on ROI management, KPI monitoring, and goal achievement. In a nutshell, it is focused on professional growth.
Managing ROI instead of managing projects means taking a quantum leap forward in your profession. Taskomat™ guarantees data completeness and circularity, which has been unimaginable until now. Every second that is tracked on every single task is then linked to the project budget, to the profitability for that client, to the hourly rate of reference, to the daily budget to be reached, to the annual financial target, to the related invoices, and to the budget, if any. Just like in real life.
In your life, when you’re working on a project, I would surmise most of the time you DON’T do it thinking about how much it will make you, how much you might lose if you take too long or how your performance might affect it. However, this is actually the reality, even if you don’t think about it carefully enough.
Ultimately, ROI management requires an awareness of your processes that no project management tool can provide. There might be some stunningly sharp overachievers who manage to come up with this awareness independently, but all of us mere mortals have Taskomat™, which teaches us every day how to achieve our goals.