How One Client Doubled Her Net Income In 7 Months
It’s story time today, friend.
Today I want to share about a client who wanted to improve her biz's profitability so that her scaling efforts translated into an increase net income.
When I first started working with this particular client, she was paying herself about $4,500 each month, despite running a boutique service-based business that had a stellar professional reputation.
We eventually determined that her biggest problem was her super-sized team / payroll expense which was a direct result of time tracking practices.
Honestly, most service-based businesses I work with have some sort of team-related challenge.
My client's issue was that she didn't have a group of people working for her that were accustomed to tracking their time in a diligent fashion. It was a BIG challenge to get her full time employees to record 40hrs of work in the time tracking software we implemented.
It wasn't that the team wasn't working, but the system and recording-side of things was the challenge.
Once we got the team consistently recording their time, we focused hard on their utilization rates.
For this client's industry, I would've expected her managers to have a utilization rate of 70-80% (i.e. at least 70% of their time should've been on client facing, revenue-driving, non-admin-type work).
However, this wasn't the case. Instead, her directors were doing about 50% client work and 50% admin tasks.
Not okay.
Getting her directors back on track and prioritizing client work helped this client do a few things:
drastically increase profitability in the short term
decrease the client's workload and hours worked
increase team capacity because the directors knew they actually had lots of space for client work if they de-prioritized internal special projects
Some of this might seem rather obvious, but I promise you it's not. When there are issues with an above-average team or payroll expense, there are a number of factors that could be causing it - especially on the inside of a growing, scaling biz. For this client, it was utilization rate. For others, it could be realization rates (i.e. how much chargeable work can I actually bill out to the client?).
If you're running a business and you have team members, I would be lying to you if I said I knew exactly how to decrease your payroll expense.
Instead, I want to give you the exact tools I use with my 1:1 clients to allow you to do some digging and determine which dial should be turned. And then, I want to meet with you 1:1 to discuss your thoughts and see if I can add anything.
And…. if you're like my client, you'll find yourself with a BIG increase in the amount of net income on your P&L in no time.
That's the kind of growth I love: profitable. It’s results like these that we will focus on during our 1:1 coaching sessions inside +The Formula+, our newly launched program. We’ll dive into the nitty-gritty of metrics like recovery and utilization rates, using spreadsheet templates to give you a clear roadmap.
If you’re struggling with team expenses or want a clearer picture of where your revenue is really going, this is the work we’ll tackle together.
Our goal? To offer a comprehensive program designed to help you hit your revenue growth goals.
We would love to see you as our next success story- are you ready?