fbpx

Finances/Profitability

All Videos

Making More Without Selling More

Making More Without Selling More

When agency owners think about gross billings or adjusted gross income, we immediately think we must sell more to make more money. And the reality is it is equally important that you do a couple of things. Number one, increase your hourly rate so you're not selling more stuff; you're just getting paid more for it. For most of you, you can't afford to charge less than $175 an hour here in the States. For other countries, it will be different based on your currency, but $175 an hour. Why? We used to say $150 an hour. But the truth is employment costs, benefit costs, all of that's gone up. We haven't raised our rates in forever. And so, if you are one of the laggards, we've been pushing on this $175 for about 18 months now. If you still haven't done it, now is the time. Maybe you can’t do it for existing contracts and clients, but you should do it for new clients or new projects. The second thing is being thoughtful about reducing waste. How do your people spend their time? How much of the billable time actually gets billed to a client? Reduce the amount of write-offs and over-servicing. If you can fix those two problems, you can add more money to the bottom line without selling another thing to another client or prospect. The other huge influencer of how you drop money to the bottom line is managing your cost of goods and ensuring that you're getting proper margin and markup on those costs if you're acting as the bank for a client. So if you are incurring those expenses, whether it's media, photography, or anything else, you are entitled to charge a margin or a markup on that to ensure you are being compensated for being their bank. Watch »

Timesheet specifics

Timesheet specifics

Let's talk to you about timesheet codes, the function codes you use to track and define how time is being spent when you do your timesheets. Many agencies have these big black holes, particularly around your non-billable time. It's uper important that you track both billable time and non-billable time. Why? Timesheets aren’t really about billing. They're about understanding what your team is doing. How long it takes. It's about looking for efficiencies and effectiveness. Who needs more training?Are our estimates accurate? It answers a ton of questions that actually have nothing to do with billing. But it starts with A) doing your timesheets every day and B) having the right function codes so you know how people spend their time. Watch »

What does an hour cost?

What does an hour cost?

We don't talk as much as we should about what an hour costs our agency. Maybe that will help inspire you to look at raising your rates. So the poor man's way of figuring that out is you need four numbers. Number of hours, number of employees, total salary cost, and your overhead cost. Watch »

How are agencies making money doing video?

How are agencies making money doing video?

I recently got asked this question: Is there a way to properly manage a client's organic social media and still make a profit? So much goes into creating video content. Are most agencies getting away from truly beneficial organic reels? It's so high touch. So yes, there's a way, but it's usually a collaboration with the client and agencies who are making money doing organic social videos or doing a couple of things. Let's look at what they're doing. Watch »

Is your boat at risk of sinking?

Is your boat at risk of sinking?

When our agencies are going through rough waters, agency owners have difficult decisions to make. Without a doubt, the most difficult is letting go of team members because your boat cannot carry everyone's weight any longer. But we have to remember our most important role as the captain of the boat....getting the boat to calm waters. Watch »

Billability vs. Utilization

Billability vs. Utilization

When I speak with agency owners there is always a lot of confusion around the related topics of billability versus utilization. I take a couple minutes in this video to help you understand both concepts. Watch »

Your top line is not the only way to grow your bottom line

Your top line is not the only way to grow your bottom line

Many agency owners believe that to grow your bottom line, you have to grow your top line, your # of FTEs and your client volume. That's just not the case. Watch »

The most important metric for agency profitability (55-25-20)

The most important metric for agency profitability (55-25-20)

AMI's Drew McLellan talks about a financial metric that is an instant health check for your marketing agency. Watch »

AMI’s estimate hack (how to actually come in on budget!)

AMI’s estimate hack (how to actually come in on budget!)

A quick look at an easy hack when agencies are preparing estimates for clients that will bring the estimates into actual alignment so the agency can deliver on time and on budget. Watch »

Go to Top