The KPI Analysis

Most agencies rely on budgets, but don’t identify and manage their profit potential. At Instinct Systems, our financial experts work with our clients to address this issue.

We can help you increase your profits without taking on new projects, winning new clients or hiring additional employees. We begin by identifying the billing and profit potential of your business. This analysis generates the key performance indicators (KPIs) that will help you maximize your company’s performance.

The KPI analysis is a reality check for your business and asks you to challenge the assumptions that are inherent in running an agency. Once the KPI analysis is complete, you can use our world-class software to actively manage your profitability and measure your success against your profit plan.

The Process

An Instinct Systems KPI analysis is a six-step process that will answer the following questions for you:

Step 1 - What are your billable hours?
Every person in your agency who generates billable time should have a target number of hours. If they don’t, then you are missing one of the most fundamental KPIs for your business. Without this KPI, it’s impossible to determine your business potential.

Step 2 - What is the overhead structure of your business?
Your overhead has a huge impact on your profitability and directly affects what you should be charging per hour for each employee. Our KPI analysis will help you understand how your overhead expenses support your revenue generating potential and how to incorporate them into your pricing decisions.

Step 3 - What other revenue (other than billable hours) can you generate?
It can be hard to predict what other income (e.g. mark-up on external services) you can expect to generate each year. Our KPI analysis will help you understand how every dollar you earn takes the pressure off your cost structure and the inevitable leaks from your time-based revenue.

Step 4 - What do your employees really cost you?
This is the magic number and many companies fail to calculate it correctly. If you use a multiple of salary to calculate your charge rates, you will not see how the key drivers of your business are impacting your potential performance.

Step 5 - What is your potential and what do you have to do to reach it?
This is the #1 outcome of our KPI analysis. When we put all the information into our model, we discover what you need to do to reach your desired level of profitability. The findings will surprise you, either for better or for worse. If the outcome is negative, we will help you identify which areas you can work on to maximize your performance. If it’s positive, then there’s usually untapped profit potential in your business and we can help you make the most of it.

Step 6 - How do your actual charge rates affect your potential?
Our KPI analysis generates two equally important outcomes that help guide you to a more profitable future:
• A thorough understanding of your business potential.
• Knowledge of how your management decisions will impact your potential.

The Benefits

• Our KPI Analysis will give you opportunities to improve the performance of your business.
• You will know the key drivers that impact on the performance of your business.
• You will be able to tell if you are on track to make a profit for the month, without asking your accountant.
• You will know the impact of hiring and firing decisions before you make them.

Interested in learning more?

For a limited time Instinct Systems is offering the KPI analysis as a complimentary service to potential clients. Please visit our Contact Form page, or send us a message directly for more information.

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