About this Episode
If you’re an agency owner, ops lead, or finance leader, you’ve likely asked yourself: Are we actually making money on our projects? What does good profitability even look like? And why does it feel so hard to measure and improve our margins?
That’s exactly the problem Parakeeto was built to solve.
In this episode of the Agency Profit Podcast, host Marcel Petitpas (CEO of Parakeeto) and consultant Kristen Kelly go behind the scenes to break down Parakeeto’s proven approach to helping digital and creative agencies become more profitable—without relying on bloated spreadsheets or guesswork.
They explain why profitability is such a tricky target to hit. Spoiler: it’s usually a mix of messy data, unclear metrics, and a lack of consistent process. Most agencies are tracking something, but few are tracking the right things in a way that connects to actual business outcomes.
That’s where Parakeeto comes in. Our framework simplifies complex metrics like utilization, project margin, and average cost per hour. Our tools clean and normalize data across project management, finance, and sales systems. And their consultants guide agencies through modeling, benchmarking, pricing, forecasting, and reporting—giving leaders real visibility and confidence in their decisions.
This episode also touches on common agency questions like:
- How does an agency make a profit?
- What’s a good profit margin?
- Why is profitability so hard to measure?
- How do we track ROI more effectively?
Whether you choose to work with Parakeeto or just want to better understand the building blocks of agency profitability, this episode offers a transparent roadmap for scaling your agency without sacrificing your bottom line.
Watch this Episode
Points of Interest
- 2:14 – 3:18 – Founding Insight: Parakeeto was created to help agencies easily answer crucial financial questions by replacing guesswork with structured systems.
- 3:23 – 4:39 – How Agencies Make Profit: Strong delivery margin is key. Parakeeto targets a 50%+ delivery margin and 20–30% net profit as benchmarks.
- 5:45 – 6:58 – Why Profitability is Hard to Measure: Profitability requires collecting and aligning fragmented data across leadership, ops, and finance functions.
- 6:59 – 8:33 – Framework Misalignment: Agencies struggle with inconsistent definitions and relationships between key metrics like utilization and capacity.
- 9:10 – 10:10 – Messy & Incomplete Data: Most agencies collect data in tools but struggle with consistency, structure, and hygiene—making optimization difficult.
- 10:41 – 12:14 – Need for Operational Bookkeeping: Like accounting, operational data needs regular cleanup, maintenance, and review to support decisions.
- 13:05 – 14:27 – Improved Visibility = Better Focus: Parakeeto’s framework simplifies agency metrics and identifies gaps to improve ROI tracking and alignment.
- 16:02 – 17:30 – Modeling & Benchmarking: Agencies get clarity by comparing their performance against industry standards and their own financial goals.
- 18:15 – 20:49 – Pricing Tools that Drive Profit: Parakeeto’s estimator helps standardize pricing, reduce guesswork, and align prices with profitability targets.
- 25:02 – 27:15 – Forecasting Made Simple: “Top-down forecasting” lets agencies simulate staffing and revenue scenarios with minimal setup—great for scaling.
- 29:39 – 31:58 – Actionable Reports Drive Change: With consistent reporting cadences, teams align around data to reduce scope creep and focus on what matters.
Additional Resources
Calculators
- Agency Profitability Target Calculator
- Agency Fee Calculator: How Much Should You Charge?
- Agency Rate Calculator: Determine Your Hourly Rate
- How to Calculate Your Billable Employee Cost-Per-Hour (ACPH)
Blog Post
- Measuring and Improving your Agency’s Profitability – The 2023 Guide
- 3 Key Profitability Drivers Agencies Need to Prioritize
- 8 Vital Agency Metrics & KPIs to Improve Profitability
- Maximizing Project Profit Margin: A Guide to Increasing Returns
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