If even thinking about your agency’s financial situation gives you the shivers it is ok; you are not alone. The last thing you thought you needed to be as an expert in finance spreadsheets when you set up your agency, yet here you are, the end of the month and up to your eyeballs in numbers wondering where your profits are.
If you get the basics right and use the proven formulas from the professional services industry, then you can relax and get on doing the work that you really love in your agency.
The following 5 steps are what you can get out of our Growit Digital Agency Financial Blueprint
1. Know exactly how much profit you make per service and per employee. Time tracking is the key to finding out which of your services bring you the most profit and who on your team is working to their best capacity. If you cannot get people to track their time you need to find a tool/system that everyone uses, consistently. Your team needs to understand that they are responsible for the success of your business, the more efficient they become as they increase their value to your clients the better off your whole agency will be.
2. Once you have clarity on what services bring you the most revenue and profit, then you can build out packages for your sales team and set targets on how many packages they need to sell every month. The key to you hitting your yearly revenue number is knowing how many visitors and leads that your marketing team have to generate to hand over to your sales team and their sales process conversion path.
3. A question we hear from agency owners regularly is the question “When is the right time to hire?” Getting the resource planning right in your business is a balancing act. You must know how much time each of the packages that you are delivering for clients takes on average and then how many the sales team expects to sell to hit your targets. Allowing time for your service team to train and learn can make sure they provide the best service for a long time. 70% or more is a good number to aim for when it comes to employee utilization - you need to allow for training and learning - up to 10% of a person's weekly time.
4. Working with an accountant that is familiar with the professional services industry is preferential and if they have experience working with multinational currencies, that is even better.
5. Create a dashboard of all the crucial numbers you are tracking with a tool like Databox, and if possible show it on a screen in your office so that the whole team can see your progress.
If you set up measuring your agency financials with the right templates and analysing the correct numbers, then you are free to focus on improving your numbers and growing your agency in the right direction.