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.

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 can be around 80%, with a maximum of 90% for highly predictable work. The episode shares insights on how agencies can achieve this to create sustainable & profitable growth.

Time Stamp

[00:01:53] The Importance of utilisation for agency profit

[00:04:25] The misconception of capacity in agencies

[00:06:16] Breaking down agency growth stages: Create to Build

[00:09:03] Margins matter: Navigating profitable business strategies

[00:11:04] How to measure utilisation and billable hours

[00:15:47] Optimal service utilisation for maximum profitability

[00:18:20] The downside of aiming for 100% workforce utilisation

[00:22:31] Monthly feedback loops crucial for profit growth

[00:26:06] Balancing time-tracking and cultural resistance

[00:29:21] Advice to Ryan's younger self - No one really knows what they're doing!

Quotations

“Utilisation becomes a priority once a business reaches around a million dollars in revenue, as businesses figure out profitability and concentration risks and work towards reaching the hierarchy of financial needs." - 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

Rate, Review, & Subscribe on Apple Podcasts

"I enjoy listening to The Agency Accelerator Podcast. I always learn something from every episode." If that sounds like you, please consider the rating and review my show! This helps me support more people — just like you — to move towards a Self-Running Agency.
How to leave a review on Apple Podcasts

Scroll to the bottom, tap to rate with five stars, and select "Write a Review." Then be sure to let me know what you loved most about the episode!

Also, if you haven't done so already, subscribe to the podcast. I'm adding a bunch of bonus episodes to the feed and, if you're not subscribed, there's a good chance you'll miss out.