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Profit & Growth Tips for Digital Agencies

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How to Increase Digital Agency Billable Hours

Posted by Laura Hernalsteen on Jan 15, 2016


If your agency operates on the billable hour pricing model, to increase revenue you either need to increase your hourly rate or bill more hours. Today I’m looking at three ways your agency can increase its number of billable hours, and in turn boost agency revenue.

1) Reduce Non-Billable Hours

Your agency’s billable hours are limited by the size of your team: there are a finite number of hours you can work in a week, and in turn a finite number of hours you can bill for. But how many hours in a week does your team spend on non-billable work – things like team meetings (or meeting-related admin) or answering emails?

Team meetings in particular eat into your billable time. They involve many people – maybe even the whole agency – and take up a lot of time. For example, a one-hour team meeting involving everyone in a ten-person agency could create up to ten non-billable hours just for the meeting itself, not including any preparation or follow-up work.

To reclaim some of that non-billable time, consider replacing team meetings with short catch-ups, or avoiding them altogether. By defining and implementing processes for your agency’s work, you can reduce the need for meetings, and reduce uncertainty on how to proceed properly. For example, a defined process on ‘how to validate the end of each project’, which includes how to request customer sign-off and when to bill, will remove the need for meetings to discuss this both internally and with the client - thereby reducing your non-billable time in the process.

Using a resource management tool to share processes, and display project progress, team workloads and priorities could eliminate the need for long meetings by giving everyone visibility into agency projects.

2) Improve Team Productivity

Improving your team’s productivity can also lead to an increase in billable hours. Taking a holistic approach to team utilisation can greatly boost the number of hours that you can bill for.

You want to make sure that as far as possible everyone is working on billable tasks most appropriate to their skill set and seniority. For example, you would want your designer to be creating custom artwork for your client, rather than creating page layouts which could be done just as well by your junior designer.

Effective resource management can greatly improve your agency team’s productivity, by providing insight into team utilisation and helping you to match tasks and projects to the skill sets of your team members. By seeing how much work everyone has on, you will also improve your work planning and scheduling, meaning that you are able to estimate work more accurately, and know when your agency will be able to take on additional billable work.

3) Improve Individual Productivity

A typical office worker gets interrupted every three minutes, and it can take up to 23 minutes for them to get back on track with their work. The best way to boost your employees’ individual productivity is to minimise distractions. Encourage your team to turn off notifications (think social media, email notifications, instant messaging) and spend less time with their emails open.

By minimising interruptions and cutting down on attempts at multi-tasking, you can regain hours of productive, billable time. Additionally, using a resource management tool will provide everyone with clear visibility of agency tasks and priorities, making it much easier for your agency team to manage their workloads in order to maximise the amount of billable work they complete compared with non-billable work.

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