Marcel Petitpas is the CEO and founder of Parakeeto, a consulting and technology firm dedicated exclusively to helping agencies answer important questions without wasting time on spreadsheets. They specialize in helping digital marketing creative agencies improve their profitability by essentially helping them get the right insight into the key questions that they need to answer every day in order to be awesome.
He is also a motivational speaker, entrepreneur, coach, and host of The Agency Profit Podcast. He helps first-time entrepreneurs prepare for battle and design a lifestyle and a mindset that accelerates their success. Marcel Petitpas helps creative and digital agencies optimize their profitability by helping them measure and master their core operational metrics and processes.
In this episode, learn how to improve your agency’s profitability through managing things like your time, hiring the right people (and getting rid of those who aren't), using systems to make work easier and less stressful, setting up proper accounting practices for your business including profit & loss statements and balance sheets, tracking KPIs for each department within your agency so you know where improvements can be made.
This Cast Covers:
- Reducing your taxes is one of the best investing strategies (03:29)
- What they do at Parakeeto, who they help, and how they came about helping agencies with profitability (05:31)
- What's a typical agency operating from a profitability perspective? And then what should they or could they operate at? (06:04)
- Why most agency owners settle for 10-15% profit when getting up to 35-40% net margins at the end of the year is completely achievable (06:47)
- You should pay attention to profit especially if you’re looking to sell your agency and have that exit one day (08:47)
- What most agency founders forget when they say their profit is 10% which only makes them half as profitable as they say they are (10:33)
- The #1 & 2 culprits that will kill profitability in agencies (11:25)
- How to compute for agency gross income and average billable rate (12:34)
- Joey gives an example of utilization (15:05)
- Do agency owners and founders know that they're struggling with utilization, or is it typically like the silent killer? (16:43)
- Marcel talks about the pros and cons of value-based pricing (17:39)
- Why you should still be tracking time even if you do value based pricing no matter how profitable you are (19:20)
- Scoping and pricing are two separate things and are independent of each other (21:09)
- Where to start if you want to improve the profitability of your agency (28:37)
- Questions to ask yourself to move your agency into the right direction with more profit
- Is utilizing partners or freelancers to deliver work a good thing? (32:52)
- The big profit driver Joey uses that allows him to have 70% profit margins in the agency – having strategic partners (34:19)
- A way to ensure that your scoping gets done well and could be a much easier offer for your salesperson to sell (39:32)