The most important number an agency should track and center in on is profitable utilization. Rather than just focusing on how busy you and your team feel/are, it's also crucial to know how the work you're doing is generating revenue, and whether that revenue is enough to cover all your business' costs.
Unfortunately, one third of businesses don't see their three year anniversary, and if you're not profitable, you could run the same risk. Even for businesses with several years under their belt can later find themselves struggling to stay afloat or scale due to their lack of profitable utilization.
Take Big Blue Digital for example. The Australian-based company appeared to be thriving. What started out of a home office in 2000 continued to have major strides throughout a decade. By 2013, the team had developed over 600 websites and created 100+ custom internet applications. So, when looking through their financial statements, CEO Brendan O'Sullivan was surprised at what he found. Although they were busier than ever, the end of the quarter financials weren't reflecting that."We were losing money on untracked billable hours, and I had no way of seeing where the time was being spent," Brendan admitted.
Their leakage of valuable time and ineffective, outdated tools were plaguing their business. By implementing a comprehensive, integrated platform they were able to get paid 3x faster, and by cutting back on leaked time overhead from 36% to 62% they increased their revenue by nearly 50%.
Take the next steps to improve your utilization by adopting dynamic tools like a Utilization Dashboard in order to efficiently stay on top of all of the pivotal parts of your agency. Here's what you can do to ensure your business is sustainable and scalable for the long run:
Your team's productivity and the client work that they do is truly the inventory of your business. By having consistent access into how your team members are being utilized in real-time (not just historically) you can see who is working on what, determine who is being underutilized or logging enough billable hours, and adapt scheduling and workload to ensure you're making the best use of everyone's time.
The ability to have a grasp on how each team member is utilizing their daily time and efforts helps determine your business' profitability. Not only are you tracking who's being utilized, but you'll get insight into who is being utilized profitably. You're able to compare the amount of work that was logged to the amount of work that was scheduled during a particular time period, and get a real-time handle on billable versus non-billable hours.
View how your team members are being utilized through a bar graph of their time logged and scheduled. Filter through to view and manage specific date ranges.
A Utilization Dashboard gives you an informed view of how your team's time is being spent. From there, you can edit a team member's work, effectively re-assign tasks, and work on your projects all from one dashboard. Your team is all on the same page and you avoid missing any critical deadlines.
If you're looking for an extensive, integrated platform equipped with a vast overview of your utilization comprised of data that stems from any logged time (billable or non-billable) and your team's real-time schedule, give Accelo a try today!