The Agency Accelerator The Importance Of Utilisation In Agency Profitability - With Ryan Watson
In this episode of The Agency Accelerator, we focus on staff utilisation. My guest, Ryan Watson from Upsourced, shares his experiences and advice to help agencies grow profitably by focusing on utilisation.
The goal is to avoid being busy but not profitable!
Ryan categorises agencies into growth stages, discussing when utilisation becomes a priority. He also emphasises the importance of time tracking for creating a feedback loop to determine gross and project profits.
The target utilisation rate for each team member should be approximately 80%. The episode shares insights on how agencies can achieve this to create sustainable & profitable growth.
Time Stamp
[01:53] The importance of measuring utilisation to maximise agency profit
[04:25] The misconception of capacity in agencies
[06:16] Breaking down agency growth stages: From 'create' to 'build'
[09:03] Margins matter: Navigating profitable business strategies
[11:04] How to measure utilisation and billable hours
[15:47] Optimal service utilisation for maximum profitability
[18:20] The downside of aiming for 100% workforce utilisation
[22:31] Monthly feedback loops are crucial for profit growth
[26:06] Balancing time-tracking and cultural resistance
[29:21] Advice to Ryan's younger self - No one really knows what they're doing!
Useful Quotes
"Utilisation becomes a priority as a business heads towards a million dollars in revenue." Ryan Watson
"Utilisation is one of the two key diagnostic metrics to improve profitability." Ryan Watson
"I don't believe there is a more effective way of measuring utilisation than implementing time tracking" Rob Da Costa
Useful Links
- Upsourcedaccounting.com
- Ryan on Twitter
Some time tracking tools mentioned in the episode: