Stuck in outdated routines, balancing commercial actions with profitability, navigating a maze of tools and varying paces. In the face of rapid market changes, agency leaders confront these numerous challenges daily. Defying the surrounding complexity, mastering both spent and billed time proves to be the cornerstone of sustainable profitability.
Manage your time differently and simply today: the key to your profitability tomorrow
How can I understand, in real-time, if I’m making money on my projects? This question loops in our minds during workout sessions, client lunches, or even in the evening before picking up the kids from school. A refrain, a mantra, a leitmotif. Until you can answer it simply.
The observation is straightforward: 85% of an agency’s profitability directly stems from the profitability of each of its projects.
So, how do we gain clarity?
Yes, you will have to go through it. Time tracking by employees. It is the first trigger that ultimately allows you to say whether or not the branding project for the major luxury brand or the small website redesign for the community association is profitable or not.
You will finally be able to know if you are spending your wealth, the time and skills of your employees, while being compensated accordingly, or not. Yes, we know that in practice, initiating this change is complicated. That habits among employees are deeply rooted, and that it will take some effort to change them.
But the stakes far exceed the effort: for employees, tracking time means saying goodbye to long workdays and to requests that can’t be refused coming in at 5 PM on a Thursday. The client also needs to be aware of the actual time spent by your teams on their projects. For that, they need something concrete, tangible, metrics, access to clear and precise views.
Time tracking is also far from always being complex and tedious – it can be done intelligently, like when you can transform the time sold on an approved quote directly into time allocated to the schedule (depending, of course, on each employee’s availability). No more manual intervention in this case. Simple, fast, effective, the key adjectives that should apply to your project management tool.
But simply tracking time is not enough. As a leader, to best understand if you are making money on your projects, you need to be able to analyze, project by project and overall, the essential metrics for good management: project progress, gross margin, production (gross margin relative to project progress), average daily rate (total gross margin of the project relative to the total number of days planned to date), current billing status, and overall profitability.
These metrics must be quickly accessible, allowing you to identify breaking points and thus potential adjustments to be made quickly.
- Above: an overview of project metrics in Furious
The verdict is clear: if you want to be certain of best mastering the time spent on your projects and thus boost your growth and profitability, the key remains moving to a model where time tracking is seen as an advantage for all – employees as well as company leaders.
How many have arrived too late at the wall, thinking they were profitable from one year to the next by following the billed revenue, while they were losing money on each unmanaged project, not having the right figures to present to clients to value their teams’ actual work and inevitable overruns to balance.
Structure your agency to be profitable
We cannot redo the past, we can only observe. The majority of your agency’s profitability comes from good management of the time spent on projects, more broadly from good management of the balance between time spent and time billed.
Coming from the agency world, we at Furious quickly realized that a business tool tailored to the business of selling time – time on a fixed-price or retainer basis – was essential for managing not on intuition but with full knowledge of the data related to your projects and their attributes (time sold on the quote, planning, billing, quality management, etc.).
With this issue in mind, we created Furious, the custom business management software, a true co-pilot for all agency, consulting firm, and IT services company leaders.
So, does the refrain, the leitmotif, have an answer? Yes, and it's Furious!
With Furious, you can manage your commercial activity, your projects as a whole (tasks, schedules, productivity…), the billing of these projects, HR and quality aspects, but most importantly, you will no longer be able to lose money without Furious warning you beforehand.
If you are still with us and curious to know more, make an appointment with our experts to identify your potential for growth and profitability here!
