Agency profit improvement calculator

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2				Agency profit improvement calculator			How improvements (%) to process impact your profit… and what you can do with the extra money.
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4							Grads who train with Louder Than Ten are generating 20% net profit margin and 20% growth for their agencies. This is how.
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6			Current agency snapshot				Plot your existing income
7			Agency Gross Income (AGI)		$3,000,000		Start by filling in your Agency Gross Income (revenue after any pass-through expenses like contractor fees and client software licenses), net profit margin, number of active clients, and number of full-time employees (both billable and non-billable). Ballparks are fine.
8			Net profit margin		25%
9			# of active clients per year		22
10			# of full-time employees		20
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12			Average client size		$136,364
13			AGI per full-time employee		$150,000
14			AGI per business day*	* Based on 260 working days per year	$11,538
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16			Expense reductions				Skinny those expenses
17			Improved estimation process		5.00%		Want to increase profit? Start by controlling your spending. If your profit margin is 10%, $1 savings on expenses means $10 worth of sales. Notice the impact on profit when you improve by 10% in expense reductions vs 10% in revenue generation. Add a row for each area you can improve efficiency that yields the biggest financial impact. Add as many rows as you need. We pre-filled a few of the more common line items that result in decreased expenses.
18			Accurate requirements definition		5.00%
19			Tighter handovers and shorter approval windows		5.00%
20			Total		15.00%
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22			Revenue increases				Generate unexpected revenue
23			Turning scope creep into paid future features		5.00%		Even though expense reductions have a bigger impact, don't sleep on revenue increases. There's only so much you can trim from expenses, but a well-trained project leader can generate a significant amount of high-margin revenue in unexpected places. Add as many rows as you need. We pre-filled a few for you.
24			Upselling or retaining existing clients		5.00%
25			New revenue stream		5.00%
26			Total		15.00%
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28			Results	Before	After	% change	Efficiency + creativity = profit
29			Revenue	$3,000,000	$3,450,000	15%	Notice the multiplier effect that expense reductions have compared to revenue increases. Project efficiency is the secret ingredient to a healthy agency. Finding ways to generate more revenue is the icing on the cake.
30			Expenses	$2,250,000	$1,912,500	15%
31			Net profit	$750,000	$1,537,500	105%
32			Net profit margin	25%	45%	20%
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35			Things you could do with the additional profit		$787,500		Use this extra money to hire, increase salaries and benefits, or reinvest in your agency
36			Equivalent number of clients		5.775		Close this many fewer clients per year
37			Equivalent number of full-time employees		5.3		Hire this many more full-time employees
38			Company-wide salary increase		$39,375		Raise everyone's salary by this amount
39			Available monthly overhead		$65,625		Improve your working environment
40			Number of working days		68		Shut down for this many more days per year (hello 4-day work weeks)
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42			Want help realizing these improvements? Book a strategy call with our CEO, Rachel Gertz.
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44		© 2022 Louder Than Ten Industries Inc. All rights reserved.
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