How to Analyze Agency Performance with Key Financial KPIs

Are you an agency owner or manager looking to get a real handle on your financial performance? Stop relying solely on last year's accounts and start looking at the road ahead! This podcast dives deep into the top financial KPIs (Key Performance Indicators) your agency should be tracking right now to ensure you're heading in the right direction for growth and profitability. We break down the essential metrics you need to monitor monthly to stay on track and address issues quickly. Learn why looking at your current position and future trajectory is crucial in today's fast-moving global economy. In this episode, we cover: •Income (Gross Profit): Understanding your profitability from both existing and new business. •Costs: How to break down salary costs (and the crucial salary-to-gross-profit ratio), overheads, and freelancer expenses to identify potential issues. We discuss aiming for a salary ratio of 55-65%. •EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) and EBIT (Earnings Before Interest and Taxes): Understanding your operating profit and retained earnings. •EBIT Percentage (Operating Margin): How to calculate and use this to benchmark your agency's performance, aiming for a target of 20%. •Revenue (Gross Profit) per Head (Rev/FTE): A key metric for tracking team productivity, with a benchmark of £100,000 for most agencies. •Recoverability: Ensuring you're billing for the work you're doing and maximizing profitability. By tracking these six core KPIs, you'll gain the ultimate finger on the pulse of your business, allowing you to make informed decisions to improve your agency's future success. Don't just look in the rear-view mirror – focus on the windscreen and drive your agency forward! #FinancialKPIs #AgencyFinance #Profitability #BusinessMetrics #AgencyGrowth #RevenuePerHead #EBITDA #GrossProfit #Recoverability #FinancialAnalysis #BusinessPerformance #TrendingKPIs