In this coaching call, Marcel Petitpas focuses on boosting agency profitability. He discusses the “cycle of insolvency,” a scenario where agencies struggle to stay profitable even as their revenue grows. To tackle this, he stresses the need to grasp essential financial metrics such as Agency Gross Income (AGI), delivery margin, and utilization. He identifies three critical metrics—average cost per hour, average billable rate, and utilization—that can enhance delivery margin and increase profitability. The conversation also delves into effective pricing strategies, recommending a target of 70% for direct delivery margin and suggesting various pricing models like time and materials, abstracted time and materials, flat fees, and value-based pricing based on the project’s value and risk.
