How to STOP Losing Money on your Agency Projects
How to STOP Money Loss on Projects
If you are always experiencing some form of money loss on the projects you take on, you may not be alone but it’s not something to accept especially when you want to grow your business.
Get your agency to the next level by actually making a profit.
If you want to actually make a profit, start tracking your time.
Yeah, it sucks.
Yeah, it’s hard to do. But if you want to ensure you’re turning a profit, you need to implement a system for you and your team to track the hours they’re spending on projects.
Before I started tracking time, I was losing money on 60% of the projects we were doing. In some cases, I was losing around $20,000. Learn from my mistake!
Does this sound familiar? You’re going along, thinking you’re making money on a project but once you start really looking at how much time you spent, you find that you actually lost money. Or you’ve been selling like crazy all year, only to look at what you made and discover that you made a lot less than you thought?
Raise your rates!
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How do you know how much to raise your rates?
Surprise – it starts with tracking your time! We would use the time we tracked previously to figure out what to charge on similar projects. We would know from the previous records how much time it took for each phase of a project. This gave us an accurate judgement of how many hours it would take to complete the work.
But setting your rate doesn’t stop there. You also need to add to it for profitability and unknowns. For example:
100 hour project + 25% for profitability + 25% for unknowns
So essentially, that 100 hour project is charged as a 150 hour project. Whatever you end up charging, at the very least, you need to make sure you know how long it takes you to do the project.
Use tracking software.
I’ve used a great software called My Intervals, but there are lots of awesome ones out there. These tools make it super easy for you and your team to track time. If your team is resistant, incentivize them! After all, if you’re tracking your time you’ll be able to pay bonuses!
Still don’t think you can do it?
I’d love to hear your excuses for why you don’t think you can track time. Or what happened when you tried to track time and it didn’t work out. Post your comments below and let’s talk about it.
Building the Best Digital Agency
Stopping money loss on projects needs to be a priority if you want to build the best agency possible but what other issues are you experiencing or even worse, ignoring? I can help you get through all of it.
I have provided many successful agency owner with support and advice on many topics from what to do when you want to speed up sales processes, ways to increase your business profit margins or how you can build an authority for your agency.
Growing pains within an agency can be a major struggle and I can show you how to identify the different phases of agency growth, why placing a solid process for performance based pricing can be the best pricing strategy and what the three questions you need to ask yourself are for you to sell more!