The Agency Profit Podcast

POINTS OF INTEREST * 1:08 – 2:17 – Why Time Tracking Still Matters: Kristen and Marcel introduce the episode’s goal—to reframe time tracking from a frustrating chore into a strategic advantage for agencies. * 2:28 – 4:59 – Debunking Common Misconceptions: Marcel breaks down the three common arguments against time tracking, particularly the mistaken belief that it's only relevant for time-and-materials billing. * 5:04 – 6:19 – Understanding the Agency Business Model: Marcel explains why all service businesses, regardless of pricing model, must measure time to truly understand costs and profit margins. * 6:33 – 8:39 – When Time Tracking Becomes Non-Negotiable: The hosts argue that the ideal conditions for skipping time tracking rarely exist—most agencies operate in too much uncertainty. * 8:45 – 10:47 – The Cultural Problem with Time Sheets: Beyond logistics, the core issue is lack of transparency—teams don't understand how time data is used or how it benefits them. * 10:53 – 13:12 – Misuse of Metrics and the Consequences: Marcel describes how overexposing metrics like utilization or budget variance skews behavior, leading to inaccurate and untrustworthy data. * 14:20 – 16:38 – Time Tracking and Cost Visibility: Even with fixed pricing models, agencies must know how much time goes into work to assess whether it's profitable or sustainable. * 16:44 – 18:58 – Key Metrics Affected by Time Tracking: Delivery margin, utilization, and average billable rate are highlighted as critical performance indicators that depend on time data. * 19:04 – 21:58 – The Profitability Flywheel Explained: Kristen and Marcel introduce Parakeeto’s four-step framework for building a feedback loop that drives clarity and continuous improvement. * 24:22 – 27:33 – Modern Alternatives to Time Sheets: They outline a spectrum of options—from traditional time sheets to resource planning and AI-assisted tools—offering flexibility based on agency complexity. * 28:06 – 32:25 – Sequencing Time Tracking for Success: Marcel shares Parakeeto’s phased approach: start with modeling and forecasting before implementing time tracking to ensure team alignment and data utility. SHOW NOTES * Boost Agency Profits: Calculate your Profitability Targets [https://parakeeto.com/blog/agency-profitability-target-calculator/] * Maximize Project Profit Margins: Boost Returns Today [https://parakeeto.com/blog/project-profit-margin/] * Essential Agency Metrics & KPIs for Boosting Profitability [https://parakeeto.com/blog/agency-metrics/] * Master Agency Time Tracking: Optimize Without Timesheets [https://parakeeto.com/blog/how-to-track-time-with-marcel-petipas-episode-42/] * Request demo videos of our reporting platform [https://parakeeto.com/apply-for-a-call/] LOVE THE PODCAST Leave us a review here [https://lovethepodcast.com/agencyprofit].

POINTS OF INTEREST * 1:09 – 2:28 – Meet Rich Brett: Rich shares his background in agency finance and how he now serves 12–15 agencies monthly by bridging gaps between finance, operations, and strategy. * 2:29 – 4:03 – The FinOps Mindset: Rich defines FinOps as the intersection of finance and operations—connecting financial data with the reality of agency delivery for more meaningful insights. * 4:04 – 6:02 – Rate Cards and Data Integrity: The duo explores how operational metrics like utilization and recovery must align with financial planning, especially when building rate cards. * 6:03 – 9:03 – Revenue Recognition Fundamentals: Rich explains revenue recognition as booking revenue based on delivery progress rather than invoice or payment dates, providing a more accurate financial view. * 9:04 – 12:08 – Cash vs. Accrual Accounting: Marcel and Rich outline the critical distinction between accrual accounting for tax, GAAP, and management purposes—and why methodology matters for insight. * 12:09 – 15:17 – Common RevRec Mistakes: Many agencies overcomplicate revenue recognition or fail to track only fee-earned income, leading to distorted financials and misaligned reporting. * 15:18 – 17:55 – Building a Methodology: Rich outlines a practical approach using project forecasts, resourcing, and delivery inputs to estimate monthly revenue earned from projects. * 17:56 – 21:08 – Percent Complete Frameworks: The episode covers five models for calculating project completion—from time vs. timeline to project manager estimates—each with pros and cons. * 21:09 – 24:47 – Operational Insights from Finance: They highlight how mismatches between recognized revenue and time tracking reveal performance issues and inform staffing decisions. * 24:48 – 27:37 – Working with Accountants: Rich emphasizes keeping revenue recognition simple and ensuring bookkeepers support your methodology with appropriate journal entries. * 27:38 – 36:00 – Scope Clarity and Internal Truth: The conversation turns to separating internal planning from client-facing documents and how poor internal assumptions lead to inaccurate reporting. SHOW NOTES * Rich’s LinkedIn [https://www.linkedin.com/in/rich-brett-36903590/] * My Framework * Time vs. Timeline * Hours vs. Budget * Burndown Chart/ Task Checked Off * Initial Project Shape/ Resource Plan- Based Forecasting * % Complete LOVE THE PODCAST Leave us a review here [https://lovethepodcast.com/agencyprofit].

POINTS OF INTEREST * 0:00 – 1:00 – Introduction to Forecasting Challenges: Marcel and Kristen set the stage by identifying forecasting as a critical but often misunderstood aspect of agency operations, particularly in scaling businesses. * 1:06 – 2:30 – Defining Forecasting’s Importance: They explain how forecasting provides the necessary visibility to manage capacity, revenue, and key metrics, forming the foundation for informed decision-making. * 2:47 – 3:48 – Forecasting as a Management Function: Marcel discusses how balancing workload and staffing is a core leadership task, becoming more complex and high-stakes as agencies grow in size. * 5:05 – 6:17 – Bottom-Up Forecasting Explained: Marcel describes the traditional method of forecasting via detailed task-level planning, often used by project managers to allocate resources with precision. * 6:32 – 7:52 – Limitations of Bottom-Up Approaches: Kristen and Marcel highlight how bottom-up forecasting becomes difficult to scale due to its complexity and sensitivity to frequent changes in scope or staffing. * 7:59 – 9:39 – Top-Down Forecasting Defined: The conversation shifts to top-down forecasting, which simplifies inputs by modeling at the role or department level, enabling faster, strategic scenario planning. * 11:00 – 12:20 – Embracing Uncertainty in Leadership Planning: Marcel explains how top-down methods are better suited to leadership conversations, which often require evaluating multiple uncertain scenarios quickly. * 13:04 – 14:27 – Statistical Logic Behind Simplicity: Marcel introduces the concept of reliability block diagrams, illustrating why less granular systems can actually offer more consistent accuracy over time. * 17:00 – 17:45 – Precision vs. Accuracy in Uncertain Contexts: The hosts explore how broader, less precise estimates (e.g., ranges) are often more accurate and actionable when future outcomes are unknown. * 20:31 – 23:01 – Keeping Systems Separate for Efficiency: Marcel warns against tightly coupling bottom-up and top-down systems, advocating for independent but aligned processes to avoid maintenance burdens. * 26:15 – 27:02 – Material Discrepancies and Process Discipline: They stress that small mismatches between forecasting systems aren’t necessarily problems and underscore the importance of scope-driven planning. * 30:57 – 34:20 – Getting Started with Top-Down Forecasting: The episode closes with advice on how agencies can start building simple top-down models using team capacity and project estimates to guide executive decisions. SHOW NOTES * Book a call and learn more about our Forecasting system [https://parakeeto.com/apply-for-a-call/] * LinkedIn Post on Bottom-Up vs Top-Down Math [https://www.linkedin.com/posts/marcelpetitpas_if-your-resource-planning-feels-brokenthis-activity-7287147922536693760-n1hp?utm_source=share&utm_medium=member_desktop&rcm=ACoAABKYd-AB3GPNrxSnwVzP5JJOtdGi3VQDNWk] * Request demo videos of our reporting platform [https://parakeeto.com/apply-for-a-call/]

POINTS OF INTEREST * 0:00 – 1:18 – The Real Growth Blocker: Mandi kicks off by addressing how many agency owners avoid growth-driving actions not due to lack of knowledge, but due to fear and discomfort. Commitment to transformation must outweigh resistance. * 2:22 – 3:53 – Mandi’s Mission at Hands-Off CEO: Mandi shares her focus on helping service-based agencies scale sustainably and profitably by building systems that allow businesses to grow without the owner being in the weeds. * 4:00 – 5:15 – Understanding Delivery Margin: Marcel introduces delivery margin as a core profitability metric—the portion of revenue left after delivering services, which can fund growth, overhead, and profit. * 5:23 – 7:23 – Charging More for the Same Work: They discuss the first profitability lever: increasing your average billable rate. Mandi explains why agencies should price for outcomes, not deliverables, and how a value-focused approach earns higher fees. * 7:29 – 9:09 – Pricing Confidence is a Mindset Shift: Many owners struggle to raise prices because they lack confidence. Mandi emphasizes becoming the type of person who can confidently sell high-value offers before they’re “ready.” * 10:03 – 12:26 – Real Case: From $30K to $120K Projects: Mandi shares a client success story where reframing services as long-term transformational engagements led to a 600% price increase and more stable profitability. * 13:25 – 15:27 – Efficiency vs. People-Pleasing: The second lever—efficiency—is often blocked by the urge to keep clients happy. Mandi explains how this mindset causes scope creep and prevents outcomes-driven work. * 16:00 – 17:59 – Leadership Over Likeability: Mandi makes the case that effective client leadership, not compliance, drives results. You must be more committed to their transformation than to being liked. * 18:48 – 20:22 – Right-Sizing the Team (The Hard Way): As utilization drops, hard decisions arise. Mandi discusses the emotional difficulty of letting go of team members—even those who’ve been with you a long time—but insists it’s necessary for long-term vision. * 23:17 – 25:39 – Create Revenue Before Cutting: Instead of jumping to layoffs, Mandi encourages tapping past and current clients to unlock fast revenue with strategic conversations and new vision-based offers. * 30:05 – 32:59 – Rebalancing Workloads and Internal Focus: When utilization rises, teams often feel overworked. Mandi and Marcel recommend reprioritizing or pausing internal projects to ensure capacity goes toward revenue-generating work. * 34:07 – 36:46 – Reducing Average Cost per Hour: The final lever involves delegation. Mandi outlines a “$5 to $5,000/hour” time audit to move low-value tasks off senior team members and improve margin through better team leverage. SHOW NOTES * Download the Scalability Checklist [https://handsoffceo.com/checklist/] * The Hands-Off CEO Book [https://book.handsoffceo.com/book-org] * Mandi’s Podcast [https://handsoffceo.com/podcast/] * Mandi’s LinkedIn [https://www.linkedin.com/in/mandiellefson/] * Buy back your Time [https://www.buybackyourtime.com/] LOVE THE PODCAST Leave us a review here [https://lovethepodcast.com/agencyprofit].

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 [https://parakeeto.com/blog/agency-profitability-target-calculator/] * Agency Fee Calculator: How Much Should You Charge? [https://parakeeto.com/blog/agency-fee-calculator/] * Agency Rate Calculator: Determine Your Hourly Rate [https://parakeeto.com/blog/agency-rate-calculator-determine-your-hourly-rate/] * How to Calculate Your Billable Employee Cost-Per-Hour (ACPH) [https://parakeeto.com/blog/how-to-accurately-calculate-your-agencys-billable-employee-cost-per-hour/] Blog Post * Measuring and Improving your Agency’s Profitability – The 2023 Guide [https://parakeeto.com/blog/measuring-and-improving-your-agencys-profitabilty-the-2023-guide/] * 3 Key Profitability Drivers Agencies Need to Prioritize [https://parakeeto.com/blog/profitability-drivers/] * 8 Vital Agency Metrics & KPIs to Improve Profitability [https://parakeeto.com/blog/agency-metrics/] * Maximizing Project Profit Margin: A Guide to Increasing Returns [https://parakeeto.com/blog/project-profit-margin/] LOVE THE PODCAST Leave us a review here [https://lovethepodcast.com/agencyprofit].