Realization rate vs utilization: where billable work loses its value
A busy team can still discount away its work. Utilization shows how capacity was used; realization shows what happened to the value of billable time.
Topic
Profitability
Working out whether the work you just did made any money.
Project budget tracking: the number that warns you before the overrun
A project can be under budget today and already heading for a loss. Track what it will take to finish, alongside what you have spent.
Four time tracking metrics that mislead
Every one of these is genuinely useful and every one of them regularly produces the wrong decision. What each actually measures, and what to read alongside it.
How to estimate project hours using work you have already done
Your last project contains evidence for your next quote. Here is how to turn recorded hours into an estimate you can explain and improve.
Hourly, fixed fee, or value-based: choosing how to charge
The three models fail in different directions. Knowing which failure you can absorb is more useful than knowing which model is fashionable.
Catching scope creep before it eats the retainer
Scope creep is rarely one big unreasonable request. It is forty small ones, none of which was worth an argument, and the only reliable detector is a number you check monthly.
How to calculate agency utilization rate (and the number to aim for)
Utilization is the most quoted and least understood number in agency operations. Here is the formula, the benchmarks, and the three ways the calculation goes quietly wrong.
Effective hourly rate: the number that tells you a retainer has gone wrong
Your rate card says $150 an hour. Effective hourly rate is what you actually got. The gap between the two is where agency margin quietly disappears.
What an hour of your team actually costs
Salary divided by 2,080 is the wrong answer, and it is wrong in the direction that loses money. Here is how to work out the number you should be pricing against.
How to tell whether a project actually made money
Revenue minus obvious costs is not profitability. Here is the calculation that includes the parts agencies routinely leave out, and when to run it.
Numbers like these, without the spreadsheet
Utilization, effective hourly rate and project margin, straight out of tracked time.
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