I was recently asked to suggest one ‘top tip’ for agency owners or senior teams related to running a profitable agency.
We all know the adage (although I can’t find the source of it) of “turnover is vanity, profit is sanity but cash is reality”.
Have a look at the feature that Scale put together from a range of experts on running a profitable agency.
They are all excellent insights (mine not withstanding).
My tip came from my years at McCann, where I had regular meetings with the FD and Finance Manager.
We looked over lots of data around team overheads, time utilisation, recovery rates, charge out rates (and where possible, value charged) scope creep on projects etc.
I confess, in the very early days, to finding those regular meetings a ‘distraction’ from working on actual web / ‘new media’ (yep, that long ago) projects.
Spreadsheets and time sheet platforms just weren’t as shiny as global web sites or branded Flash games (yep again, really that long ago).
But the penny very quickly dropped.
Without regularly measuring a range of things, we couldn’t maintain the profitability that the agency / world group required.
And just being ‘busy’ was no measure for future survival, let alone growth.