Financial KPIs
17 articles
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So, why aren't people tracking their time?
Many agencies don't track time, and some have good reasons. What they get right, where it breaks, and why I still track mine.
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These 2 things are not the same
Your target rate is maths. How you actually price is a simple model that beats it. Know the difference and you'll always know if your pricing is working.
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An expected bonus isn't a bonus
An expected bonus stops working as a bonus. How to actually incentivise an agency team: commission, profit share, ad hoc rewards, training and equity.
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How I built pipeline and stepped out of delivery
How I built pipeline and stepped out of delivery: the luck, and what made it stick. Compounding marketing, knowing your numbers, the right people.
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Why design agency founders get trapped
Design agencies are built differently - and that makes them uniquely vulnerable to four traps that stop talented founders from growing beyond themselves.
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Track time for now. Tomorrow it will be tokens.
As an agency founder your most important job is allocating resource. Time is your unit - imperfect but essential - and knowing what it costs tells you which clients make real money and how to build a business that doesn't need you billing.
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The rules apply to you
Financial KPIs feel like something for bigger agencies. But even tiny ones have delivery margins and effective rates - they're just harder to see. Here's how to start measuring them before they start to matter more.
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The hire that won't pay for themselves
The quick maths you do before hiring - new revenue vs new salary - misses on-costs, management overhead, and the margin contribution a hire needs to make. Here's why that instinct gets less reliable as your agency grows.
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Why are you faking your revenue?
Deposits, prepayments, and retainers all make your revenue line lie to you. Here's why your monthly analysis is built on bad data - and how accrual accounting fixes it.
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Steal my forecasting template to see your future
A practical guide to building a financial forecast for your agency, starting simple and adding sophistication over time, so you can see the impact of your decisions before you make them.
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In defence of the billable hour
Value-based pricing only works when you can predict the outcome, for the uncertain, high-value strategic work that agencies should be chasing, the billable hour still has an important role to play.
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How to tell if your agency actually had a good month
Invoiced revenue can paint a misleading picture of agency performance, using accrual-based thinking reveals the true health of your month and prevents you from scaling problems you can't yet see.
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The curse of the doer: why your greatest skill might be holding your agency back
Being skilled at the work lets you start an agency, but it also lets you get away with being bad at running one, and the habits that form in the early days become the culture that holds you back.
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A more practical vision: using simple numbers to plan your agency's future
Two numbers, team size and target revenue, can replace vague vision exercises with a concrete planning tool that reveals exactly what needs to change in your agency to hit your goals.
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Don't get stuck in the valley of low profit
Agency profitability follows a predictable curve, small founder-led agencies and large structured ones both thrive, but the messy middle is a valley of rising costs, harder sales, and squeezed margins that demands intentional navigation.
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Future-proof your agency with this KPI
Delivery margin is the one financial KPI every agency founder should master, it strips away noise to reveal whether your core service is truly profitable, no matter how your business model evolves.
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Your profit numbers aren't real until you pay yourself first
If you are not budgeting your own market-rate salary before declaring profit, you are hiding the true performance of your agency. Paying yourself first forces better business decisions.