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Mastering Utilization and Capacity Planning for Agency Profits — Ep. 133

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Parakeeto

Parakeeto

Last updated Jan 25, 2024

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Mastering Utilization and Capacity Planning for Agency Profits — Ep. 133

Last updated Jan 25, 2024 | 0 comments

Parakeeto

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About this Episode

In this special solocast episode of the Agency Profit Podcast, Marcel Petitpas dives into the world of utilization rates in agencies, shedding light on a metric that often leaves people scratching their heads. Marcel stresses the importance of getting the calculation right, weaving it seamlessly into a broader management framework for agencies. He spills the beans on how utilization directly affects the bottom line and shares practical strategies for improvement, like tackling client dilution and fine-tuning team dynamics.

The big takeaway? A consistent metric aligning with financial, capacity, and efficiency measures is the key to agency success. Perfect for agencies navigating changes, this episode provides down-to-earth insights for boosting productivity and profitability.

Hop into the new episode below.

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Points of Interest

  • 0:00-2:00  –  Introduction to the solo cast episode focusing on utilization rates, emphasizing its significance for agencies.
  • 2:00-6:00  –  Historical context of utilization, highlighting its relevance in the billable hour era and its evolving role in the modern agency landscape.
  • 6:00-11:30 – Challenges in measuring utilization, emphasizing variations in defining billable hours and capacity, hindering benchmarking efforts.
  • 11:30-15:00 – Emphasis on a comprehensive management framework and the interconnectedness of utilization with financial metrics.
  • 15:00-18:00 – Discussion on the impact of utilization on agency profitability and the absence of a universal benchmark.
  • 18:00-22:30 – Introduction to the Parakeeto framework and its consistent approach to calculating utilization within a broader context.
  • 22:30-26:00 – Insight into utilization as a lever affecting delivery margin, with examples highlighting potential discrepancies in profitability.
  • 26:00-30:00 – Exploration of the formula for utilization, defined as delivery hours over capacity, with detailed explanations of each component.
  • 30:00-34:00 – Importance of considering delivery hours over billable hours in the context of utilization, using examples to illustrate profitability discrepancies.
  • 34:00  – End Conclusion on the significance of a thoughtful and consistent metric aligned with a broader management framework, with a focus on the flexibility of the Parakeeto framework.

Show Notes:

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