507: How To Think More Profitably As An Agency | Marcel Petitpas

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Marcel Petitpas is the CEO & Co-Founder of Parakeeto, a company dedicated to helping agencies improve their profitability by streamlining their operations and reporting systems. He’s also the fractional COO at Gold Front, an award-winning creative agency in San Francisco working with brands like Uber, Slack, Keap, and more. As well as the head strategic coach at SaaS Academy by Dan Martell, the #1 coaching program for B2B SaaS businesses in the world.

Today he’s going to dissect agency profitability. This is a coast-to-coast breakdown on the financial aspects, how to manage time, and how to approach clients. Everything you need to increase margins and scale your business is in this episode of the Conquer Local Podcast.

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Introduction

George: This is the Conquer Local Podcast, a show about billion dollar sales leaders, marketers leading local economic growth and entrepreneurs that have created their dream organizations. They want to share their secrets, giving you the distilled version of their extraordinary feats. Our hope is with the tangible takeaways from each episode, you can rewire, rework, and reimagine your business. I’m your host George Leith and on this episode, we have the privilege of having Marcel Petitpas join us. Marcel is the CEO and co-founder of Parakeeto, a company dedicated to helping agencies improve their profitability by streamlining their operations and reporting systems. He’s also the fractional COO at Gold Front, an award-winning creative agency in San Francisco working with brands like Uber, Slack, Keep, and more, as well as the head of strategic coaching for the SaaS Academy by Dan Martell, the number one coaching program for B2B SaaS businesses in the world. When he’s not helping agencies make more money, he’s probably watching The Office or Parks and Rec in a never ending loop and eating breakfast foods for every meal of the day. Get ready, Conquerors, Marcel Petitpas, coming up next on this week’s episode of the Conquer Local Podcast. Marcel Petitpas joining us from Parakeeto, Moncton, New Brunswick, Canada, I’d love to have another Canadian on the show. Marcel, welcome to the Conquer Local Podcast.

Marcel: Thank you for having me, George. It’s a pleasure to be here and I have to say, it’s been great working with the whole team at Vendasta, we’ve done a whole bunch of content together, and everybody is just amazing that I’ve interacted with, so thanks to all of you for making this fun.

About Parakeeto And Its Founding Story

George: So, our pleasure, you know, we’re gonna talk about one of my favorite subjects today is agencies and maybe before we get started, tell us a little bit about Parakeeto and how you started up that organization.

Marcel: Yeah, Parakeeto exists to solve one problem which is helping agencies make a profit and measure their profitability in a way that doesn’t end up taking them tons of spreadsheets, tons of hours crunching numbers or pulling data together, we know that’s a problem and we started this company because we had that problem ourselves as founders, we were running service businesses and we realized it’s just way too hard to get answers to these simple questions that we’re asking ourselves every day without building a bunch of spreadsheets and pulling data from a million different places.

George: So what would be some data that you’re able to pull? You know, we’ve got a lot of agency owners and agency sales reps that listen to this show, give us an example of some of the problems that you’re trying to solve.

Marcel: Yeah, well, we’ll start with the highest level which is really the important thing, what questions are we trying to get answered? And I think so many of us run to the data and the reports and the time tracking tool before we actually sit down and think about like, okay, what are we gonna use this for? And the questions that we see people trying to answer and struggling to answer all the time are things like, who do we need to hire and when, what if we close this deal? What if we don’t close this deal? What if this deal starts two weeks later? Do we have enough talent? Do we need to hire people? What kind of skills they need to have? Things like, are we making money on clients and projects? If so, how much? What services, clients, or types of work are most least profitable for us? And then of course all the questions around like, are we even scoping things properly? Did this take as much time as we thought it was going to when we sold it? These are all the kinds of questions that we see agency leaders and operations managers and teams having, and unfortunately it’s really painstaking for them to get some numbers together to support that conversation and actually feel like they’re making objective decisions as opposed to just using their gut which so many of us have to end up relying on.

George: When you started on that vignette I actually in my head went somewhere, I’m not gonna say the country I was in, I’m not gonna say the client, but I remember signing the deal, the deal that I’ve been working on for three or four years we had the whole team involved, I was so excited and I’m sitting on a bench at the hotel waiting for the executive launch to open so I could have a drink, and my head was in my hands like I’m doing right now going, this is amazing, how the hell are we gonna make this work? And I kind of felt that at the beginning of your discussion where an agency owner goes out and does all the hard work, they win the big account, and then they’ve gotta make a decision as to how they’re gonna make all the things that they said come true, and I think that that’s what you’re pointing to is one of those, you know, some of the questions that we answers to, so I love that you’re, you know, digging into this problem ’cause it’s a real problem.

Marcel: It is, the industry and just the nature of a service business, there’s a lot of complexity in answering these questions ’cause we’re dealing with humans, we’re dealing with time, and it’s just one of those things where it feels like the business is always happening to us instead of for us, and I think if we can start to get agency owner in a place where they can be looking forward and making decisions, that’s a game changer and really makes the business so much more enjoyable to run. And it allows you to show up better for all your stakeholders. You can set better expectations for clients, you’re not asking your team to stay late, to hit deliverables as often, everyone benefits from having better visibility into the future.

George: You know, one of the thing as I’m thinking about as I, you know, start to interrogate with you your philosophy is I think it also allows an agency owner to make better decisions on choosing their customers. And I’ve talked a lot about that on this show that if you know, you have an ideal customer, the one where you know you knock it out of the park, you deliver every time, not saying it’s easy to deliver, but it’s easy, hell of a lot easier than trying to fit a round peg into a square hole, so it would, when I listen to you, I’m sitting here thinking as an agency owner, if I deploy some of the things that you know you’re talking about, I might make better decisions on the customers that I go hunting for that map to the deliverables that I can knock out of the park.

Marcel: Absolutely, this is a conversation that we’re supporting all the time with data and it’s not just the conversation of, should we take this client on and on? But there’s also within that the conversation of like, how lenient should we be with our price? Should we be aggressive and stick to our guns and risk losing the client or do we really need this work? And there’s math that you can look at to help you triangulate where on that spectrum you exist ’cause there are times when it makes sense to even if you’re making a dollar an hour on the project, if your utilization is gonna be low, it’s better to make a dollar an hour than to make $0 an hour and let those hours go bad, whereas if you’re forecasting your capacity and your utilization, and you’re saying, well, you know, if we don’t lose this deal, it’s not the end of the world, we’ve got some pipeline behind it, then you might take a different approach, but what I see a lot of people doing is, again, it’s gut feel and they end up in this systemic discounting, anything to get the work when a lot of times it’s not necessary and it ends up causing indigestion which feels like starvation and has the same effect on the bottom line.

George: Well, the other thing that it does is if you aren’t able to deliver around a set of parameters that you might have stretched to win the deal, you’re gonna have to discount on the back end of it because you didn’t deliver, you don’t to give some money back, and that’s even more painful and it hurts your reputation.

Marcel: That’s right.

The Key Metrics Every Agency Should Track: Earning Efficiency, Utilization Rate, Accuracy Of Scoping Your Projects, Revenue, Gross Profit, and Net Profit

George: What are the four metrics in your opinion that every agency listening to the sound of our voices should track?

Marcel: It’s a great question, and I think people get really overwhelmed when we start talking about KPIs and metrics for agencies. There’s no book, there’s no website, there’s no clearly defined set of parameters that you can just go look that says, this is what you need to track and this is how you need to calculate it. And I think a lot of people listening to this, if you’ve ever sat down with your team and even just tried to figure out, how are we gonna calculate utilization? And then you end up in the debate about, well, what is somebody’s capacity? What does it include and what does it not include? What about vacation time? What about the foosball tournament we had on Friday? What are we taking out? And then also what’s a billable hour? How are we defining that internally? Can we all get on the same page? It’s nuanced, but I wanna explain clearly before, and I’m gonna start with the financial metrics because I think that’s the lowest hanging fruit for most people listening, ’cause you probably already have a bookkeeping cadence, maybe you’re already working with an accountant or a bookkeeper, you’re already getting financial reports, and there’s a couple small tweaks that you can make that are gonna make those way more valuable for you without having to install any additional tooling, add time tracking, change any of your processes, and so what you wanna make sure that you can find on your P and L statement are four important things, number one, you need to understand the delineation between your revenue and your agency gross income. And I’m gonna credit Drew McClellan for really popularizing the idea of agency gross income. There’s a unique thing in service businesses where traditional accounting practices, they wanna have one layer of cost of good sold. And so what often ends up happening for an agency is the expenses that they incur that are really pass through expenses. So revenue that they collect that moves on to another vendor that they were never really responsible for owning, really obvious examples of this are like ad spend, right? If you collect 16 grand from a client but you give six of that to Facebook, well that’s six grand really never belonged to you, but if you’re trying to make on your business and you’re including that kind of stuff, it clouds your judgment and it gives you a false sense of how big your business is. So you first need a layer to strip out all the pass through.

George: Can I add one thing to this?

Marcel: Yeah.

George: We also have found valuations, we’ll get hurt dramatically in an exit or a purchase because to your point, that’s pass through, so, you know, if we were to start, you know, I know where you’re going with this, ’cause if I’m starting an agency tomorrow, I’m never counting that stuff, that’s all pass through. I wanna count the real revenue and the real profitability, so, brilliant, thank you for bringing that up. We see lots of organizations that make that error.

Marcel: Yep, so you wanna make sure that you can identify AGI and I’ll give you just a few more examples of things that you’d consider pass through, so ad spend print budgets, things like that are clear, white label partners often you’re gonna consider pass through expenses, and then contractors is where it gets fuzzy, and my POV on how to treat a contractor is if the contractor is doing work that’s not core to your business, it’s pass through, but if you hired the contractor because you just didn’t have the time internally for your team to do it, so you’re enhancing your internal capacity, then I would bring that below the line, I would not consider that pass through. So hopefully that gives you some clarity. And if you’re looking at your P and L right now, if you pull it up while you’re listening to this, gross profit is probably your AGI, but your accountant is calling it gross profit right now ’cause that’s how they do it for all their other clients and so that’s how they’re gonna do it for you. So first we wanna isolate our agency gross income by pulling out the pass through and then we wanna figure out our gross profit or what we call delivery margin, we created our own term because all of this is so confusing and accountants were like, well, wait a second, what are you talking about? So delivery margin, which is really how much did we spend to earn that revenue? So that’s where we wanna isolate late our delivery costs, and that’s really simple, it’s shared delivery expenses, so you know, like your Figma subscription, your Canvas subscription, your Vendasta subscription, these tools that aren’t attributed necessarily to a single project, but your delivery team needs to do their job and the delivery team salaries essentially, all the time that goes towards doing work for clients. And generally, you’re aiming for a delivery margin of 50 plus percent on the P and L at any given period of time. So that’s the first two levels that you wanna be measuring, and then we can talk about overhead here next, but I’ll pause there in case you have some commentary.

George: No I think that it’s brilliant and you are for an agency owner that’s not thinking about this way, rewind that and listen to it again because we find this to be a problem, it’s like, yeah, I’m not making any money, yeah, because all you’re selling is ads and the only guys making any money are Mark and Larry and Sergey and their shareholders, because it’s all pass through, and you know, understanding what that, I like that term, and let me just make sure I got it right, delivery margin.

Marcel: Yeah.

George: And now isolating that, that is a real interesting component because that’s where you’re, that’s your profitability.

Marcel: And so just that you’re really tactical on this for a second. There’s two really simple ways that you can make finding out your delivery margin a lot easier ’cause for most of you listening, you’re gonna look at your P and L and all your payroll is in a single account, payroll, and everybody’s in there, your executive assistant is in there, the custodial services is in there, your delivery team is in there, your salary is in there, and so you either have to use classes and quick books so layering that on and split that one line into different buckets and we generally consider those buckets to be delivery, sales and marketing, administration and facilities, or you just create separate lines on your chart of accounts and you have one for payroll, for admin, and then you have another one for delivery payroll. But it’s just about isolating what are the things we’re spending in the delivery function, so doing work for clients, the people, the process, the tools, whatever, let’s isolate those so we can quickly do the math on, okay, we spent this much on delivery and we earned this much AGI, therefore our delivery margin is this percent, it’s good, it’s bad, it’s whatever, but at least you know it and it’s easy to figure out.

How Often Should You Be Analysing Your Agencies Metrics?

George: One question, Marcel. What’s my cadence on this as an agency owner? Like what would you recommend that they’re getting a glimpse of this data, is it annually, is it quarterly, is it monthly, is it daily? what’s the best practice?

Marcel: Right, so, and this is the problem with financials, this is why I’m starting here, and then we’re gonna talk about some other metrics that you can look at much more often. The reality is most agencies, unless they’re doing a lot of revenue, they don’t have the resources to be doing weekly bookkeeping or daily bookkeeping, you don’t have a full time controller or bookkeeper in house, you don’t have a CFO in house, so the fastest you can probably see this information is on a monthly basis, and that’s the cadence that I think most businesses are running on. You get a report from your bookkeeper every month that tells you the state of the business. And so what I arguing for here is whatever cadence you’re on right now, let’s try to get to monthly, maybe it’s quarterly, I would say at least quarterly, let’s just make it a little more insightful so you can get true metrics on how you’re actually performing and delivery margin is a super important one ’cause that’s the most precise way to measure what I like to call your earning efficiency, how efficiently does this business earn its revenue? And that is the baseline of profitability, without delivery margin, without earning efficiency, it’s gonna be really hard to have a good, strong bottom line profit, and it’s probably gonna put undue pressure on your overhead spending and make you really make cost cutting decisions where they don’t belong because there’s a fundamental problem with, you’re just not profitable enough when you get things done for clients.

George: So we’ve covered off the key financial metrics, we’ve covered off improving your operational cadence to you’re looking at the books every month, which is probably a big win for a lot of people, we’ve talked about earning efficiency, we’ve talked about utilization, you’ve got one other metric that I’m really interested in learning about and that is scoping accuracy, I think I know what you’re talking about there, but educate us.

Marcel: Well, I wanna come back for a second, I hate to break it to you, George, but we still haven’t even finished going through financials. So there’s one more element here that I wanna break down-

George: So you can tell I’m the sales guy, I’m like, oh, let’s get on the next thing, but you’re like George, slow down and look at the books.

Marcel: Yeah, let’s look at the P and L, okay, so we have our total revenue, we figured out AGI, and then we figured out our margin on AGI delivery margin. The next thing we wanna look at is overhead. We wanna make sure that we’re not spending in total more than 20 to 30% of our AGI on overhead and we generally wanna be able to figure out our three core categories in overhead. One, how much do we spend on administration? Two, how much do we spend on sales and marketing, and three, how much do we spend on facilities? And you know, that’s like rent, internet, phones, that stuff. And generally we wanna be anywhere from 8 to 12% on admin, 8 to 12% on sales and marketing and 4 to 6% on facilities, and that total should be 20 to 30%. If we’re over that number, ideally that’s overages in sales and marketing and it’s a deliberate decision that you’ve made to borrow from the bottom line to invest in more growth. But if you can benchmark yourself now, your financials are gonna give you a sense of like, are we healthy? Are we spending our money appropriately relative to the side of our business? And you’re gonna get a lot more value out of financials. So that wraps up financials and carries us into the next metrics. And the one I wanna go into next is earning efficiency and just dig a little deeper there.

George: So let’s go back one minute. What I hear this is, this is G&A. This is the G&A number that a lot of organizations have and I don’t think that you just came up with the arbitrary 8 to 10 and 8 to 10 and 4 to 6, this is based on in industry analysis and common practices, correct?

Marcel: That’s right, and this is based on auditing and analyzing, you know, hundreds of agencies and looking at data on this from industry reports as well as our own work where, you know, we do this, we lift up the hood, we look at people’s P&Ls and we restructure them using our own system, and it’s amazing how consistent these numbers actually end up being across a wide range of agencies that are running very, very different operating models.

George: I wanna punctuate another thing you said, if that 8 to 10 number for sales and marketing is higher, it usually is a deliberate decision to grow the business, you are investing to grow the business, something to think about ’cause when I talk to organization and ask ’em what’s in your sales and marketing budget? I usually get sales head count, marketing, and I’m like, no, what is the money that you’re spending to get that next dollar? What is the dollar you’re investing to get that next $10? And a lot of times you get blank looks, so I’m glad that you’re calling that out, see, even the sales guy can go back into the key financial metrics. What’s next, Marcel, you had me, let’s talk about numbers.

Earning Efficiency

Marcel: Yeah, so that’s, we talked about financials and the nice thing about financials is they’re the source of truth, but the problem with them is you’re probably not seeing them more than on a monthly basis, and we know that getting 12 shots on net in a year to write, you know, correct course on the business is probably not enough, so how do we get tighter visibility into these things to make sure that in between those months we’re still steering the ship, and there’s two key metrics, the first is earning efficiency. And so we’ve talked about how delivery margin is the most accurate way to measure earning efficiency, but it’s expensive, it requires an accounting software, it requires bookkeeping, requires a lot of inputs, there’s another way to measure it that’s way easier and you can do it for any time period, for any project, for any client, you can slice and dice the business any way that you want, and it’s average billable rate, ABR, the formula for that is very simple, take your AGI across anything, any time period, any client, any project and divide it by the number of hours that were worked to earn that AGI or billable hours as most people will call them. So for example, if we had a project and we had $10,000 in AGI on that project and we spend a hundred hours on it, then we made a hundred dollars per hour. That was our average billable rate. This is not what you charge the client when you sent them the proposal, this is not the number that you use to figure out how much to charge them, this is the actual level of efficiency that you have, and the beautiful thing about this is, you saw how simple that math is? You can do it in two seconds and you can very quickly start to get a sense of what clients have a higher average billable rate, what clients have a lower average billable rate, how is that number trending over time? And if you understand what your average cost per hour is for your salary team, you can get a sense of what your gross margin is or your delivery margin is on a project or on a time period just by doing that quick math. So that’s earning efficiency and that’s a quick way that you can start to, you know, on a daily or weekly basis, get a read on how well you’re doing on earning efficiency as using average billable rate.

George: Well, and I love how simple it is because then somebody like me could do it. So now we’ve talked a little bit about utilization, are there other things we need to unpack there?

Utilization Rate

Marcel: Yeah, the really simple concept with utilization is, and there’s a lot of controversy around this metric and how it should be calculated, so I’m just gonna make it clear how we calculate it and why, the way we calculate utilization is we take the baseline capacity, the gross capacity of a person, and so for most people, that’s 2080 hours per year, 40 hours per week times 52 weeks a year. There’s a lot of people listening and they’re like, well, Marcel, what about vacation time and time off and weekends? And some of them are billable and some of them are non-billable and some of them spend half their time billable and half their time not, it’s like, no, that doesn’t matter, we look at the whole team and we look at all of their time and we don’t strip any of that stuff out. The reason for that is it just makes it easier to calculate and it also allows us to just bake into our target and bake into our modeling the inefficiency we know is gonna be there because of sick time and pay time off, et cetera. So let’s strip all that complexity out of the metric and just say, what is the total amount of time that that person had in a given period of time, and then we look at the relative amount of delivery or billable hours that they worked, so as an example, if in a year, George, you had 2080 hours available, and you worked 1400 billable hours, then you were 67% utilized in that time period. And for most agencies, you’re setting a target on a weekly basis for your purely billable team at anywhere from 75 to 95% on an annual basis for your entire team, if you can be south of 60%, you’re probably good and healthy, you have a good team composition, the team is busy enough, that’s what we wanna be targeting on utilization.

George: Well, and I love that thought around utilization because I think for a lot of our organizations listening to this call, there probably is some more juice you can squeeze from the orange, but by understanding what your capacity is and where your utilization number is, it’ll allow you to make those strategic decisions. Scoping accuracy, I’m excited to learn about scoping accuracy.

Marcel: Yeah, that’s the last one, and it’s super critical because we talked earlier about looking into the future, right? Predicting capacity, predicting profitability, pricing things well, and our thesis is when you really think about it, agency operations, the ultimate objective, a high functioning agency operations team is able to look into the future. But the only way for them to do that is to use assumptions about client work and to project them into the future, and if those assumptions about client work aren’t solid, then there’s no foundation for good agency operations, and so if we don’t have a feedback loop to tell us, hey, when you put this proposal together, you are totally out in that field, and it took us twice as much time, or the specifically the development portion of this website project was way off, then we don’t have a way to tighten that up and make it more accurate over time. And so even if the pushback I get on this is, well, we don’t price by the hour or we don’t do, you know, like hourly rates, we bill on value, well, it doesn’t matter, you still have the resource plan, you still have to tell your team what they’re working on, you still have to project your own operations, so don’t think about this as an exercise you do for the client, think about scoping as an exercise you do for yourself. And the simple thing here is measure how close you were to the assumptions you made in the estimate at the end of every project and measure that as a percentage, and the goal is to get within 10% consistently of what you estimated to what you actually did, and I know for some people they’re gonna think, holy crap, we are really not even close to that at all, that’s okay, we can dig into more of like how to close that gap, but you should be measuring this. It’s very important.

George: One of the questions that I get asked a lot when we do, you know, either convention or a keynote, or maybe it’s an under the hood, you know, direct message on LinkedIn, I’m a founder, I started my own agency, I got maybe a couple people work with me and now I wanna scale up. So we’re successful, we wanna scale up. Do you find that that’s how hard for that founder? Because they really they’re doing a lot of things. I’ve found instinctively, They haven’t really been tracking any of it. They give stuff away, all over the place to get a deal. And now you hire five sales reps and they start doing that and then the wheels fall off the cart. That’s kind of what I’ve seen time and time again. Tell me what do you think of that.

Why Time-tracking Is So Important For Agencies

Marcel: Yeah, I’m gonna take, like I agree on the sales perspective, I think people try to outsource sales before they have a clear playbook for the sales team to follow to be successful, so there’s all kinds of issues with that, it creates all kinds of indigestion, but then similarly, there’s all these roadblocks that are caused by not having clarity on what the cost of getting somebody else to do this is, and by not having the margin to be able to afford to bring that person in. So this is why I think if you’re a freelancer or a solo founder, you have a very small team and your plan is to scale, you should start tracking your time now, and you should start to think about what are like the three or four hats that I wear in a project. When am I the account manager? When am I the designer? When am I the developer? And when am I the strategist? Like maybe that’s your schema and start tracking your time that way, that way in six months, when you’re like, man, I could really use a project manager, you can go in and look at the data and understand exactly how much it’s gonna cost you on every single project, and you can run the numbers as well when you quote a client to say, well, if know that going to market and hiring a freelance PM is gonna cost me $50 an hour, then I need to price this such that I’ve got a 60 or 70% margin on top of my hard costs, and then I know that I can afford to hire a project manager whenever I’m comfortable giving up that amount of revenue, and I’m not in a position where ’cause I see this all the time, it’s like, if I’m gonna hire a team to do this, well, all of a sudden I have to raise my prices and I’ve got all these clients that are hanging around like dead weight that I set bad expectations for, and I’ve gotta fight against the ghost of myself, the ghost from agency past, in order to even put myself in a position to scale, I’ve created a set of golden handcuffs for myself and you can avoid all of that just by tracking your time and measuring the end investment on day zero, that way the answers to those questions are already there when you come to that point in time.

George: Marcel, I was pumped to have you on the show to get you to give us some of those formulas and the science that you’ve been building into this, but I’ll tell you, this has exceeded my expectations, I am feeling smarter than I was when we started this because you’re really starting to dig into the heart of some of the issues that we hear from agencies all the time. Now I got good news for our listeners, you actually have an online toolkit where you can start to run some of this analysis. Let’s talk about that.

Marcel: Yeah, so my belief, George, is that your marketing should serve more people than your product ever does, and I also believe that every agency should be able to do this without paying us or anybody else a penny ’cause it’s just fundamentally necessary to have a sustainable business and I wanna see people win, so, yes, we put together the agency profitability toolkit, it’s loaded with spread eats, templates, and training videos that should give you everything you need to get these basics that I’ve talked about today in place absolutely free, and you can get access to that at parakeeto.com/toolkit, it’s my gift to you and I really hope that all of you listening go and check that out and get some value from it.

How To Connect With Marcel To Increase Your Agency’s Profitability

George: Well, if you’ve been keeping track at home, Marcel has given us a number of different gifts, he’s given us the four metrics that every agency should track, given us a really good reason to believe because it’s obvious that you guys do this and do it well on a daily basis. And then the freebie, and we’re gonna put the information in the show notes on how you can access that. If people want to work with Parakeeto and Marcel Petitpas and your team, again, how would they reach out and find you, Marcel?

Marcel: Well, if you wanna connect with me personally, you can find me on LinkedIn, I’m wearing a shirt with birds on it, I’m not hard to spot, and if you wanna learn more about what we’re doing at Parakeeto, you can head on over to Parakeeto.com and all the information that you should need is there, you can go ahead and book a call with us if this is a problem that you’re ready to really get solved and also make sure you check out the agency profit podcast if you’re hungry for more of the nerdy side of running an agency like this.

George: Marcel, thanks for joining us on the show. Really appreciate having you, and you now are a part of the Conquerors, the alumni of Conquerors that have been on the Conquer Local podcast, And again, I don’t say that very often, I feel a heck of a lot smarter having listened to you over the last 20 minutes, you gave me a lot to think about and I’m sure our listeners would agree, so thank you for your insights.

Marcel: Thank you, George, it was a pleasure.

George: As agency owners, we rely on this gut feeling of discounting that often becomes systemic and highly affects the bottom line, and Marcel talked a lot about this and I saw this a number of times in agencies as they look to scale and they look to grow. This approach often isn’t scalable and will leave you more scrambled. There is a math equation that you can put in place that will tell if what you’re discounting will really be smarter than taking no deal at all. You can implement in your day to day a process to reduce uncertainty and provide you with a repeatable decision making process, And that’s what Marcel laid out in his four key metrics, the earning efficiency, utilization of your resources, the accuracy of scoping your projects, and then we spent a lot of time on those key financial metrics like revenue, gross profit, and net profit, and Marcel did an amazing job of drilling into those and why as owners, we need to pay particular attention. If you’d like Marcel’s episode discussing increasing agency profitability, let’s continue the conversation by checking out episode 444, the psychology of starting and running an agency with Robert Davis. Please subscribe and leave us a review. Thanks for joining us this week on the Conquer Local Podcast. My name is George Leith. I’ll see you when I see you.