#Agency 8: The #1 Reason Why Agencies Aren't Making More Money w/ Drew McLellan

WEBVTT 1 00:00:05.719 --> 00:00:09.509 There's a ton of noise out there. So how do you get decision makers 2 00:00:09.630 --> 00:00:14.589 to pay attention to your brand? Start a podcast and invite your ideal clients 3 00:00:14.910 --> 00:00:24.140 to be guests on your show. Learn more at sweetphish MEDIACOM. You're listening 4 00:00:24.179 --> 00:00:28.940 to be tob growth, a daily podcast for B TOB leaders. We've interviewed 5 00:00:28.940 --> 00:00:32.539 names you've probably heard before, like Gary vanner truck and Simon Senek, but 6 00:00:32.659 --> 00:00:36.929 you've probably never heard from the majority of our guests. That's because the bulk 7 00:00:36.969 --> 00:00:41.450 of our interviews aren't with professional speakers and authors. Most of our guests are 8 00:00:41.530 --> 00:00:46.289 in the trenches leading sales and marketing teams. They're implementing strategy, they're experimenting 9 00:00:46.369 --> 00:00:50.920 with tactics, they're building the fastest growing BB companies in the world. My 10 00:00:51.000 --> 00:00:54.359 name is James Carberry. I'm the founder of sweet fish media, a podcast 11 00:00:54.359 --> 00:00:57.920 agency for BB brands, and I'm also one of the cohosts of this show. 12 00:00:58.560 --> 00:01:02.240 When we're not interviewing sales and marketing leaders, you'll hear stories from behind 13 00:01:02.280 --> 00:01:04.549 the scenes of our own business. Will share the ups and downs of our 14 00:01:04.629 --> 00:01:10.629 journey as we attempt to take over the world. Just getting well, maybe 15 00:01:11.269 --> 00:01:19.819 let's get into the show. Hey everybody, drew McClellan here from Agency Management 16 00:01:19.859 --> 00:01:25.700 Institute. Welcome to another episode of the agency track on be to be growth. 17 00:01:26.219 --> 00:01:29.819 Many thanks to the team as sweet fish for inviting me to host this 18 00:01:30.019 --> 00:01:33.969 track. I love hanging out with agency owners and talking to them about their 19 00:01:34.010 --> 00:01:38.010 business, and that's what am is all about. We work with agency owners 20 00:01:38.049 --> 00:01:42.209 and leaders helping them grow their business. So it's not my job to tell 21 00:01:42.209 --> 00:01:46.969 you how to build a brand or how to do better PPC, but what 22 00:01:47.200 --> 00:01:49.920 I do every day and all day is help you run the business of your 23 00:01:51.000 --> 00:01:55.359 business better. My hope is to help you make more money and keep more 24 00:01:55.480 --> 00:01:59.280 of the money that you make, and so today what I want to talk 25 00:01:59.480 --> 00:02:04.870 is very specifically about that. So when I hang out with agency owners, 26 00:02:04.909 --> 00:02:07.469 which I do pretty much seven days a week, one of the topics that 27 00:02:07.509 --> 00:02:14.389 always comes up is the fact that they are super busy. They can't figure 28 00:02:14.389 --> 00:02:17.180 out why they are not making more money. And I will tell you that 29 00:02:17.300 --> 00:02:22.419 one of the big reasons why agencies don't make more money, even though they 30 00:02:22.419 --> 00:02:25.500 are super busy, is because we write off too much time. We over 31 00:02:25.699 --> 00:02:30.409 service clients to the death of the agency. And I will tell you that 32 00:02:30.490 --> 00:02:37.729 if every agency stopped writing time off and actually just got paid for the work 33 00:02:37.930 --> 00:02:42.409 they're already doing. So no more work, no more new work, no 34 00:02:42.610 --> 00:02:46.879 new clients, you just got paid for the things that you were already doing, 35 00:02:46.439 --> 00:02:51.439 you would be driving a Jag right now. But that's not what happens. 36 00:02:51.520 --> 00:02:57.599 What happens is that our team's disregard estimates. They over service clients and 37 00:02:57.639 --> 00:03:00.710 there's a lot of reasons for that, which we're going to dig into in 38 00:03:00.830 --> 00:03:04.229 this episode. So first thing, though, I want to be able to 39 00:03:04.509 --> 00:03:09.710 help you do is want to help you figure out exactly how badly you are 40 00:03:09.789 --> 00:03:14.060 writing time off. So I'm going to walk you through the math, but 41 00:03:14.259 --> 00:03:19.939 also in the show notes of this episode we've got an excel doc that's going 42 00:03:19.979 --> 00:03:23.780 to make it super easy for you to figure out what is your bill ability 43 00:03:24.099 --> 00:03:29.330 and your utilization. So let me explain those two terms. The bill ability 44 00:03:29.569 --> 00:03:35.969 is how many hours are your people working doing billable tasks? So how many 45 00:03:36.090 --> 00:03:40.599 hours is drew doing billboal work that, in theory, could be built to 46 00:03:40.680 --> 00:03:44.759 a client? So I'm not in a new business meeting, I'm not in 47 00:03:44.800 --> 00:03:49.560 an all agency meeting, I'm not on vacation. I'm doing my billibal task. 48 00:03:49.719 --> 00:03:53.840 So if I'm an ART director, I'm concepting, I'm designing, I 49 00:03:53.879 --> 00:03:57.509 might be doing final art, but I am doing something that, in theory, 50 00:03:58.270 --> 00:04:00.909 I should be build to a client for doing. So that's your bill 51 00:04:00.949 --> 00:04:08.949 ability and then there's your utilization, and your utilization is did we actually assign 52 00:04:09.150 --> 00:04:13.419 that billable hour that drew did to an invoice? Now, I am not 53 00:04:13.580 --> 00:04:16.339 suggesting that you build by the hour. Very few agencies bill by the hour 54 00:04:16.459 --> 00:04:20.740 today. Most of you are billing on a flat fee kind of project basis, 55 00:04:21.500 --> 00:04:26.410 but it still starts with figuring out how many hours is the task going 56 00:04:26.410 --> 00:04:30.410 to take and figuring out what that flat fee is going to be. So 57 00:04:30.930 --> 00:04:34.730 you can still look at the flat fee project price billing and figure out, 58 00:04:34.730 --> 00:04:40.040 okay, well, we we build this client, let's call it fifteen thousand 59 00:04:40.079 --> 00:04:44.639 dollars, and we bill out at a blended rate of a hundred and fifty 60 00:04:44.680 --> 00:04:46.160 dollars an hour, which, by the way, is the national average. 61 00:04:46.680 --> 00:04:51.990 So in theory that should be how many hours? Oh shoot, we actually 62 00:04:53.069 --> 00:04:57.750 have fifty extra hours more than what that should be. So my bill ability 63 00:04:57.990 --> 00:05:01.310 is fifty hours more than my utilization. All right, so here's how I 64 00:05:01.350 --> 00:05:03.389 want you to think about this. I want you to take the number of 65 00:05:03.709 --> 00:05:08.939 employees that you have, so full time equivalent. So if you have twenty 66 00:05:09.100 --> 00:05:13.699 three employees at work full time and you have one employee that works halftime, 67 00:05:13.819 --> 00:05:16.819 you would take twenty three point five and you would multiply it by one thousand 68 00:05:16.819 --> 00:05:21.250 nineteen twenty, so one thousand nine hundred and twenty. And the reason why 69 00:05:21.250 --> 00:05:27.329 you're multiplying it by that number is that is forty eight weeks a year at 70 00:05:27.449 --> 00:05:31.449 forty hours a week, right. So that takes into account vacations holidays. 71 00:05:31.930 --> 00:05:36.480 Is this precise and perfect? No. Is it close enough? Yes. 72 00:05:38.000 --> 00:05:42.240 Some of you, if you're using accounting software that is specifically built for agencies, 73 00:05:42.720 --> 00:05:46.639 you probably have a report that would give you this down to the Nano 74 00:05:46.839 --> 00:05:48.759 dollar. But for the rest of you, those of you that are using 75 00:05:48.800 --> 00:05:55.310 quick books or some other general accounting software, this is the methodology that's going 76 00:05:55.310 --> 00:05:58.629 to give you the data you need. So again, my number of employees 77 00:05:59.029 --> 00:06:03.269 times one thousand nine hundred and twenty equals the number of hours that I have 78 00:06:03.420 --> 00:06:09.139 available that I could, in theory, Bill and make money from as a 79 00:06:09.259 --> 00:06:12.620 client. So let's say I have ten employees, I'm going to multiply that 80 00:06:12.660 --> 00:06:15.300 by one thousand nine hundred and twenty, which means I'm going to get to 81 00:06:15.459 --> 00:06:19.889 nineteen thousand two hundred possible hours. Right, everybody with me? Okay, 82 00:06:20.009 --> 00:06:24.529 so, in theory, if every bill bow, if, first of all, 83 00:06:24.569 --> 00:06:29.649 if every employee spend all of their time doing billibill work and if I 84 00:06:29.730 --> 00:06:32.959 could bill every one of those hours, I would be able to build nineteen 85 00:06:33.040 --> 00:06:38.560 thou two hundred hours, which would be a beautiful thing. But now what 86 00:06:38.639 --> 00:06:41.720 I want you to do is I want you to figure out the percentage of 87 00:06:42.040 --> 00:06:47.029 billboll hours that you actually build versus what you have available. The easiest way 88 00:06:47.029 --> 00:06:50.990 to do this is to go back. So go back to your year end, 89 00:06:51.189 --> 00:06:55.949 from the most recent year, or again, if you have accounting software 90 00:06:55.990 --> 00:06:59.790 that is agency specific, you can do this by month or by quarter. 91 00:07:00.269 --> 00:07:03.339 But I want you to look at the total gross revenue and I want you 92 00:07:03.420 --> 00:07:06.699 to Div bide that by your billibill rates. So again, if you're a 93 00:07:06.779 --> 00:07:11.660 typical agency, you're going to take that total gross revenue, you're going to 94 00:07:11.779 --> 00:07:14.740 divide it by I'm sorry, you're not going to gross revenue, you're going 95 00:07:14.779 --> 00:07:17.730 to take your adjusted gross income. So just a reminder, gross revenue is 96 00:07:17.810 --> 00:07:20.649 what we build a client. You have to take out all of your cost 97 00:07:20.769 --> 00:07:27.050 of goods, so any media costs or other hard costs like printers, contractors, 98 00:07:27.209 --> 00:07:30.680 things like that, and what's left is your adjusted gross income, and 99 00:07:30.759 --> 00:07:32.160 you're just a gross income, is the money you actually get to keep. 100 00:07:32.279 --> 00:07:36.360 So when you to take your adjusted gross income and I want you to divide 101 00:07:36.360 --> 00:07:40.959 it by a hundred and fifty or whatever your billibill rate is. And you 102 00:07:41.040 --> 00:07:43.759 may, if you may, have some clients that you build a different rates. 103 00:07:44.000 --> 00:07:48.189 So come up with an average that seems reasonable. Divide your Agi by 104 00:07:48.269 --> 00:07:54.589 your average billibill rate and then that's going to tell you how many hours approximately 105 00:07:55.189 --> 00:07:59.379 you actually build your clients. So now what I want you to look at 106 00:07:59.579 --> 00:08:03.459 is here are the number of hours that I actually build. So let's say 107 00:08:03.620 --> 00:08:11.100 I actually build eight thousand seven hundred and fifty hours and I had the availability 108 00:08:11.259 --> 00:08:16.449 of nineteen thousand two hundred hours. If I did the math, what I 109 00:08:16.529 --> 00:08:22.889 would learn is that that means my utilization rate is forty five point five seven 110 00:08:22.930 --> 00:08:26.720 percent. The average agency, who, by the way, is making ten 111 00:08:26.800 --> 00:08:33.639 percent or less profit, is a about forty five percent utilized. So if 112 00:08:33.679 --> 00:08:35.879 we can fix that problem, all of a sudden we change your profit number. 113 00:08:37.679 --> 00:08:43.710 So your goal should be that sixty five percent of all available hours are 114 00:08:43.909 --> 00:08:50.029 utilized, which means that odds are your billibility. So again, remember, 115 00:08:50.110 --> 00:08:54.899 billable is how much time did my people spend doing billibill work? Your average 116 00:08:56.019 --> 00:08:58.100 is going to have to be about seventy five percent, because I don't care 117 00:08:58.179 --> 00:09:01.620 how good you are, I don't care how disciplined you are, you are 118 00:09:01.779 --> 00:09:07.299 going to overservice some clients. So you're never ever going to build every billable 119 00:09:07.379 --> 00:09:11.610 hour that you work. So the goal would be billibility at seventy five percent, 120 00:09:11.049 --> 00:09:16.129 so I can get to utilization of sixty five percent. But again, 121 00:09:16.169 --> 00:09:20.250 as I told you, the reality for most agencies is you're at forty percent 122 00:09:20.289 --> 00:09:24.519 or less, which is why you are not making the kind of money you 123 00:09:24.559 --> 00:09:28.919 want to make. So why in the world if we're billing seventy percent of 124 00:09:30.039 --> 00:09:33.919 our time? So let's say out of a hundred hours, seventy percent of 125 00:09:33.000 --> 00:09:39.190 those or seventy of those are spent on billable tasks, why are we not 126 00:09:39.389 --> 00:09:43.789 billing more of them? Why are we not utilizing more of them in client 127 00:09:43.870 --> 00:09:46.509 billing. Where are we not getting paid for that work? Well, it 128 00:09:46.590 --> 00:09:48.789 could be a plethora of things and it might be a combination of things. 129 00:09:48.870 --> 00:09:54.059 It maybe, and this is a very common problem in agencies, you have 130 00:09:54.139 --> 00:09:58.100 too many people and so there's not enough work for everybody to be super busy. 131 00:09:58.500 --> 00:10:03.179 The there's this thing called Parkinson's law, and Parkinson's law says that we 132 00:10:03.659 --> 00:10:09.450 allow a task to fill the time that we give it. So if you 133 00:10:09.769 --> 00:10:15.289 have one too many art directors and they're each given, you know, a 134 00:10:15.450 --> 00:10:20.250 workload that allows them to spend extra time on any project because they are not 135 00:10:20.330 --> 00:10:24.759 super busy and they're not cranking along to try and get things done, then 136 00:10:24.759 --> 00:10:31.240 I promise you that work will fill the time. So a copywriter can write 137 00:10:31.279 --> 00:10:33.879 something in two hours, but if you give them eight it's going to take 138 00:10:33.919 --> 00:10:37.309 them seven or eight hours to write it. It's just human nature. Has 139 00:10:37.389 --> 00:10:41.470 Nothing to do with art industry. It's just a human nature law called Parkinson's 140 00:10:41.470 --> 00:10:45.350 law. So it may be that you have too many people and there's not 141 00:10:45.389 --> 00:10:48.909 enough work to keep all of those people busy at a pace that is reasonable. 142 00:10:50.340 --> 00:10:54.019 So they're taking too much time to do everything. I guarantee you the 143 00:10:54.139 --> 00:10:58.539 part of the problem is you are over servicing the clients. So your folks, 144 00:10:58.860 --> 00:11:03.220 we in some cases some agencies aren't even telling their team how many hours 145 00:11:03.259 --> 00:11:05.610 they have to work on a project. They're just saying get it done. 146 00:11:05.129 --> 00:11:09.730 In other cases you are prescribing how many hours, based on the estimate they 147 00:11:09.769 --> 00:11:13.610 have to do the work. But I promise you that people are going over 148 00:11:13.809 --> 00:11:18.480 and they're going over because we want to produce the Mona Lisa of everything for 149 00:11:18.559 --> 00:11:24.559 our clients. And sometimes PDF flyers, just a PDF flyer people, and 150 00:11:24.679 --> 00:11:28.759 we have to just bang it out. And if you have people on your 151 00:11:28.879 --> 00:11:33.350 team that are artists and really care about the nuance of everything they do on 152 00:11:33.470 --> 00:11:37.750 every project, that's a problem for you and you've got a course correct that 153 00:11:37.870 --> 00:11:41.230 problem or they need to go and find a job where they can truly be 154 00:11:41.470 --> 00:11:48.259 an artist rather than a marketing professional with a skill in either writing our art 155 00:11:48.299 --> 00:11:52.139 or coding or whatever it is. It's story time, and this growth story 156 00:11:52.340 --> 00:11:56.779 is about search engine marketing. Okay, so the story revolves around e sub, 157 00:11:58.019 --> 00:12:03.250 a project management SASS company specifically for subcontractors. Even though you sub had 158 00:12:03.370 --> 00:12:09.809 incredible customer attention, they struggled with growth being a niche service. They discovered 159 00:12:09.850 --> 00:12:15.370 that there was little demand expressed for their solutions within search engines. To take 160 00:12:15.409 --> 00:12:20.720 on this challenge, E sub hired directive consulting the BB Search Marketing Agency. 161 00:12:20.440 --> 00:12:26.360 After refining targeting, pre qualifying clicks with an ad copy and developing custom landing 162 00:12:26.360 --> 00:12:31.509 pages, directive was able to increase e subs marketing qualified leads by seventy one 163 00:12:31.590 --> 00:12:37.070 percent while decreasing their cost per lead by sixty five percent. I have a 164 00:12:37.070 --> 00:12:41.470 hunch that directive can get these kind of results from too. So head over 165 00:12:41.590 --> 00:12:48.779 to directive consultingcom and request a total wee free custom proposal. That's directive consultingcom. 166 00:12:48.379 --> 00:12:54.019 All right, let's get back to this interview. The other reason why 167 00:12:54.340 --> 00:12:58.379 your efficiency is so low, that your utilization does not match your billibility, 168 00:12:58.929 --> 00:13:03.289 is because, I promise you, your estimates are bad. We are horrible 169 00:13:03.330 --> 00:13:07.570 at estimates as an industry. We are terrible at it. And here's why 170 00:13:07.730 --> 00:13:11.929 we are terrible at it. We're terrible at it because we walk around and 171 00:13:11.009 --> 00:13:16.080 we say, Hey, we're working on this TV spot. How many hours 172 00:13:16.120 --> 00:13:18.399 is it going to take you to do your part? Then we go to 173 00:13:18.440 --> 00:13:20.639 the next person. How many hours is it going to take you to your 174 00:13:20.799 --> 00:13:22.759 part and we do that for the whole team and then we add up those 175 00:13:22.799 --> 00:13:26.350 hours. We multiply a by our billibill rate and that's what we put on 176 00:13:26.389 --> 00:13:31.870 the estimate. But every one of those people gave you the perfection number, 177 00:13:31.870 --> 00:13:37.990 which is if I had three hours of uninterrupted time and I got eight hours 178 00:13:39.110 --> 00:13:43.860 of sleep and I'm not worried about my kid who's failing geography and my mom 179 00:13:43.980 --> 00:13:48.539 isn't texting me all the time about dinner on Sunday, I could get it 180 00:13:48.620 --> 00:13:50.220 done in three hours. But the reality is none of us work in that 181 00:13:50.379 --> 00:13:56.049 reality. We don't work in that Nirvana Environment. We're always being interrupted, 182 00:13:56.490 --> 00:14:00.169 we never get enough sleep, there's always something about our families or our friends 183 00:14:00.210 --> 00:14:03.929 or co workers to worry about, there are always distractions of the email pinging 184 00:14:03.970 --> 00:14:07.610 at us all the time, and so the truth of the matter is we 185 00:14:07.889 --> 00:14:13.600 never ever give enough hours to what the task is actually going to take. 186 00:14:13.120 --> 00:14:18.200 So here is the Ami drew McClellan hack. Go ahead and do that. 187 00:14:18.240 --> 00:14:22.080 Ask everybody how many hours they're going to spend on a project and then multiply 188 00:14:22.279 --> 00:14:26.309 that by one point three to one point five, depending on how bad your 189 00:14:26.350 --> 00:14:31.070 estimates are. That's actually what it's going to take to get the job done. 190 00:14:31.590 --> 00:14:37.629 We had an agency that was in single digit profitability. They couldn't figure 191 00:14:37.669 --> 00:14:41.419 out how they were everyone was slam busy, they couldn't do any more work, 192 00:14:41.820 --> 00:14:43.860 Yada, Yada, Yada. So I was with them on site for 193 00:14:43.899 --> 00:14:48.059 a couple days and we decided to use the drew hack of one point three. 194 00:14:48.100 --> 00:14:52.779 We didn't change anything else. They, he's by the way, had 195 00:14:52.779 --> 00:14:56.009 a complete cow they say. They were like, there is no way the 196 00:14:56.090 --> 00:14:58.570 clients are going to approve these estimates. There are already pushing back on price. 197 00:15:00.169 --> 00:15:03.730 We agreed that despite that reality, if it was going to be a 198 00:15:03.809 --> 00:15:07.320 reality, we were going to do it for ninety days and we were not 199 00:15:07.679 --> 00:15:11.639 going to relent on this one point three factor. So I went back ninety 200 00:15:11.639 --> 00:15:18.720 days later and two very important things happen. Number One, only one client 201 00:15:18.720 --> 00:15:26.549 one time push back on the new pricing. Otherwise everybody signed the estimate every 202 00:15:26.669 --> 00:15:31.549 time and paid the new pricing. And number two, they went from single 203 00:15:31.710 --> 00:15:39.539 digit profitability to thirteen percent profit ability in ninety stinking days because finally their estimates 204 00:15:39.620 --> 00:15:43.059 were accurate. So for most of you it's going to be a combination of 205 00:15:43.139 --> 00:15:48.940 things. You might be overstaffed, you might be doing overservicing clients, and 206 00:15:50.049 --> 00:15:52.409 that's not a mite. I know you're overservicing clients and your estimates, I 207 00:15:52.610 --> 00:15:58.570 promise you, are bad. So those are the three reasons why your billibility 208 00:15:58.850 --> 00:16:02.850 does not match your utilization. So somebody always says, okay, do I 209 00:16:02.970 --> 00:16:06.000 include the non billable people when I do this math? Yes, you have 210 00:16:06.080 --> 00:16:11.159 to include the entire team because that is a hard cost to the agency. 211 00:16:11.200 --> 00:16:15.000 You have to be able to cover and justify that hard cost. And the 212 00:16:15.080 --> 00:16:18.350 other reason why is because all of you are both billable and non billable. 213 00:16:18.909 --> 00:16:22.269 What would you do with the owner's time or the leadership's time if you don't 214 00:16:22.309 --> 00:16:26.750 include them in that mix and you're measuring the efficiency of the agency as a 215 00:16:26.870 --> 00:16:33.899 whole? Non Billable people help billable people be more billable and stay in that 216 00:16:33.980 --> 00:16:38.019 billable space. So it absolutely is got to be everybody on the team and 217 00:16:38.179 --> 00:16:41.419 it very quickly points out if you're overstaffed and one of the things you may 218 00:16:41.500 --> 00:16:47.100 find is that you have too many non billable people. The metric for that 219 00:16:47.409 --> 00:16:51.970 is for every five employees you have, one of them can be non billable. 220 00:16:52.330 --> 00:16:56.929 Right, but that means everybody else has to be really efficient with their 221 00:16:56.970 --> 00:17:02.279 bill ability and their utilization because they have to cover the non billable person's time 222 00:17:02.480 --> 00:17:07.039 and salary. So if you say, you know what, we're super busy, 223 00:17:07.319 --> 00:17:10.279 maybe this isn't our problem, maybe it's something else, I promise you 224 00:17:10.599 --> 00:17:14.200 it is a combination of those things. Here's how you fix it. First 225 00:17:14.240 --> 00:17:18.670 of all, you have better scope documents that don't allow you to overservice your 226 00:17:18.710 --> 00:17:22.349 clients. A lot of times the reason you overservice clients is because your scope 227 00:17:22.430 --> 00:17:26.869 documents are so broad and so general and they don't include a route, number 228 00:17:26.869 --> 00:17:30.700 of revisions or anything like that. There are no specifics, so the clients 229 00:17:30.740 --> 00:17:33.900 can keep asking for stuff and you have no leg to stand on to say 230 00:17:33.980 --> 00:17:40.500 no. So number one, better scope documents, more detail, better estimates, 231 00:17:40.579 --> 00:17:44.609 using the one point three or one point five hack. Everybody doing time 232 00:17:44.690 --> 00:17:51.769 sheets every single day so you can see where you are bleeding money. Maybe 233 00:17:52.130 --> 00:17:56.690 you need to raise your rate, maybe you need to set a minimum clients 234 00:17:56.769 --> 00:18:02.039 spend, because one of the places that agencies really overservice clients is on the 235 00:18:02.119 --> 00:18:07.000 tiny little clients. They are. They are huge drains on the team. 236 00:18:07.519 --> 00:18:11.559 They're needy, their proud. Typically they're a little less sophisticated. So every 237 00:18:11.599 --> 00:18:15.990 agency should have a minimum threshold of this client is too small for us. 238 00:18:17.630 --> 00:18:19.789 You also, by the way, should have a threshold for this client is 239 00:18:19.829 --> 00:18:23.509 too big for us. We are going to be chasing our tails trying to 240 00:18:23.549 --> 00:18:27.259 make them happy. You need to find the sweet spot of clients. You 241 00:18:27.380 --> 00:18:32.700 need to have better scope documents, you need to use the estimate hack and 242 00:18:33.339 --> 00:18:37.980 you need to have a system in place for your team that they know exactly 243 00:18:37.059 --> 00:18:41.730 how many hours they should spend on a job and you need to have checks 244 00:18:41.769 --> 00:18:45.930 and balances so you are, course, correcting that in real time, because 245 00:18:45.930 --> 00:18:48.730 everyone's doing their time sheets every day, so that it the horse doesn't get 246 00:18:48.769 --> 00:18:53.569 too far out of the barn before you can fix it and you can truncate 247 00:18:53.890 --> 00:19:00.039 your overservicing. All of those things without adding a client, without changing your 248 00:19:00.079 --> 00:19:04.559 billibill rate, without selling a new project. If you fix the things that 249 00:19:04.680 --> 00:19:10.269 we've been talking about today, I promise you what you're going to find is 250 00:19:10.789 --> 00:19:12.789 you're going to make more money and you're going to keep more of the money 251 00:19:12.829 --> 00:19:17.630 you make, and that's what it's all about. So please go implement some 252 00:19:17.710 --> 00:19:22.029 of these things go, poke around your numbers, download the spreadsheet so you 253 00:19:22.109 --> 00:19:26.299 can check your bill ability versus utilization and begin to focus on this. This 254 00:19:26.660 --> 00:19:32.940 is an easy problem to fix because it's all within your control. It's not 255 00:19:33.099 --> 00:19:36.980 easy to change the behaviors, it's not easy to change the mindset. So 256 00:19:37.059 --> 00:19:40.130 I'm not saying you're going to snap your fingers and all of a sudden things 257 00:19:40.130 --> 00:19:42.650 are going to get better, but this is totally in your control and, 258 00:19:42.849 --> 00:19:47.250 just like the agency I was telling you about, you can put a pretty 259 00:19:47.250 --> 00:19:52.609 significant upswing on your bottom line if you focus on this stuff. All Right, 260 00:19:52.359 --> 00:19:56.119 thanks for listening. I'll be back next month with another episode. Again, 261 00:19:56.200 --> 00:19:59.519 thanks to the folks at Sweet Fish for inviting me to do this. 262 00:19:59.720 --> 00:20:03.799 If you're curious about Ami, you want to learn more about us, head 263 00:20:03.839 --> 00:20:07.630 over to agency Management Institutecom. Happy to have you take advantage of the resources 264 00:20:07.750 --> 00:20:12.109 there are build a better agency podcast and all the other free resources we have. 265 00:20:12.230 --> 00:20:15.950 We have a bunch of ebooks and things like that. We're also doing 266 00:20:15.029 --> 00:20:18.990 a big conference in May of two thousand and twenty called build a better agency 267 00:20:19.029 --> 00:20:23.500 summit. It's the first conference. It's really built for small to midsized agencies. 268 00:20:23.619 --> 00:20:26.500 So if you're an agency of five people, it's the right place for 269 00:20:26.539 --> 00:20:30.420 you. If your an agency of twenty five people, it's the right place 270 00:20:30.539 --> 00:20:33.019 for you. We're going to talk about things that matter to you, not 271 00:20:33.140 --> 00:20:36.930 to agencies of three hundred or four hundred or five hundred. So I would 272 00:20:36.930 --> 00:20:38.809 love to meet you there in person and if that doesn't work out for you, 273 00:20:38.849 --> 00:20:41.930 I will be back here next month with another episode. Talk to you 274 00:20:42.049 --> 00:20:49.319 soon. We totally get it. We publish a ton of content on this 275 00:20:49.440 --> 00:20:52.799 podcast and it can be a lot to keep up with. That's why we've 276 00:20:52.839 --> 00:20:57.480 started the BTB growth big three, a no fluff email that wolves down our 277 00:20:57.599 --> 00:21:03.279 three biggest takeaways from an entire week of episodes. Sign up today at Sweet 278 00:21:03.279 --> 00:21:08.309 Phish Mediacom Big Three. That sweet fish Mediacom Big Three