@Boyd01
When I set up my T7, should I go into disk utility and set it up with APFS through the " repair" option.
I believe that these are preset to Fat32 from the manufacturer.
Bombich, which makes Carbon Copy Cloner, has excellent, detailed instructions on how to prepare a backup drive. These instructions apply generally, regardless of whether you are using CCC to make your backups or not:
bombich.com
The one decision you'll need to make is whether you want to encrypt your backup drive with FileVault. Then you would format it as "APFS Encrypted" instead of "APFS", and it will ask you to set up a password to access the drive. [If you don't encrypt when you set up the drive, you can still encrypt later.]
If you do encrypt it, the drive will be secured in case you ever lose it (no one can access it without the FileVault password). Be sure to record that password somewhere, because if you forget it, you won't be able to access the drive either (unless you save that drive's password in the keychain on your Mac).
What I don't know is whether, on an Apple Silicon Mac, the encryption will make the backups slower. It does make them slower when you encrypt the drive on a 2019 iMac (by ~20-30%?), but that Mac doesn't have hardware encryption, and thus relies on software encryption instead. Your Mac does have hardware encryption, which *should be* much faster, but I suspect it only applies to the internal drive, and that external drives would still use software encryption, and thus would still be slowed—but I'm not sure.
@Boyd01 — do you know?
Warning: Some external drives come with their own hardware encryption. Don't use it! They're typically incompatible with the Mac; it's safest to use Mac's FileVault. Likewise, some drives come preformatted for the Mac, with what they say is Mac-compatible backup software installed. Don't use those either! It's safest to just erase the drive completely, and reformat it yourself in Disk Utility, and use only the Mac's own software (though Carbon Copy Cloner and Super Duper are safe, since they're specifically designed for the Mac, and actually work). But don't, for instance, use Seagate's backup software, even though it says it's designed for the Mac—I did once, to my own regret....