Gross Service Margin
What remains once the cost of delivering the work is taken out. If this margin is thin, no amount of overhead control will fix it, because the problem sits in how work is priced and resourced.
Performance Intelligence
Twelve measures that show how a practice is really performing — what each one reveals, and what it quietly hides.
Profitability metrics
Whether the work being won is actually worth doing, once the cost of delivering it is accounted for.
What remains once the cost of delivering the work is taken out. If this margin is thin, no amount of overhead control will fix it, because the problem sits in how work is priced and resourced.
A plain test of whether added headcount is producing added value. If revenue rises while this figure falls, the business is getting bigger without getting stronger.
Not all revenue carries the same value. A higher fee project may still produce weak returns if it demands too much time or senior attention. Looking only at revenue can hide this.
A practice can be busy, win awards and still be earning far less than it should. If project margins are not clear, leaders may continue taking on work that looks attractive on the surface but quietly weakens the practice financially.
CAPACITY & DELIVERY metrics
Whether the team can carry the work it has taken on, and what it costs when the plan and the reality drift apart.
Knowing what the team can realistically deliver before committing to it. Without a forward view, work is either turned away that could have been won, or accepted at a cost to everything already in progress.
Utilisation affects profitability more than many studio leaders realise. If utilisation is too low, salary cost erodes profit. If it is too high for too long, quality, morale and delivery begin to suffer.
Growth and risk metrics
What the months ahead are likely to hold, and how exposed the practice is if one part of the picture changes.
The weighted value of work still to be won, set against what the business needs to win. Pipeline judged on volume alone tends to flatter, because it rarely accounts for how likely, or how soon, the work will convert.
How much of revenue depends on a small number of clients. A practice can be profitable and growing and still be fragile, if losing one relationship would remove a significant share of income.
How closely earlier forecasts matched what actually happened. A forecast that is consistently wrong in the same direction is more useful than it first appears, because the bias can be corrected for.
Strategic finance advisors for businesses that have outgrown bookkeeping and their accountants.
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