Hotkeys are a great alternative for starting and stopping the dictation without using the mouse.
Talkatoo has hotkeys, or a sequence of key presses, that will start and stop dictation for you. These are currently not programmable, meaning that they cannot be changed, but this option will be available in a future release.
Windows: CTRL+ALT+S
Mac: COMMAND+OPTION+S
Press all 3 keys together and release to toggle the dictation on and off.
You can also show and hide the Talkatoo toolbar:
Windows: CTRL+ALT+H
Mac: COMMAND+OPTION+H
Programmable microphones
An even better alternative is to use a premium handheld microphone with programmable buttons, such as the Philips SpeechMike or Olympus RecMic. In addition to starting and stopping dictation, they have Tab and Enter keys, as well as having a built in mouse with buttons.