Most agencies don’t actually price wrong — they deploy time wrong.
Fix utilization, and profit jumps fast. The system: install a weekly utilization scoreboard and run your team to it.
What to Measure (Simple, Ruthless)
- Utilization = billable hours ÷ capacity hours (by role, service line, weekly)
- Effective rate = revenue ÷ billable hours (exposes discounting/leakage)
- Mix = time split by service line (shows where low-margin work is scaling)
- Coverage = pipeline hours ÷ staffed capacity (hiring trigger)
Target ranges (adjust to your model):
- Strategists: 55–65% (rest = selling/QA)
- Managers: 65–75%
- Producers: 75–85%
- Healthy team average: 70–75% without burnout
The Cadence (This is the OS)
- Define billable vs non-billable once. No “maybe” time.
- Instrument time at task level and map to invoices (no mapping = fake utilization).
- Weekly 30-minute review:
- Where did we miss target (by role, client, service line)?
- Which tasks should be non-billable or eliminated?
- What scope/price changes prevent repeats this week?
- Enforce rate cards at invoicing (QA price, not just hours).
- Hiring math: only hire when 4–6 weeks of pipeline > 90% capacity.
Levers to Move Utilization Up (Without Breaking Delivery)
- Scope guardrails: cap rounds, define out-of-scope and charge for it
- Price floors: minimums per deliverable; reject low-margin work
- Project to package: convert bespoke work into fixed-scope retainers
- Calendar discipline: pre-block focus time, cut meeting bloat
- Time-to-invoice map: auto-pull hours/costs into billing so effort always becomes revenue
Red Flags (and Fixes)
- High utilization, low profit: underpriced or over-scoped → raise floors, tighten SOWs
- Low utilization, decent profit: too much admin → cut meetings, batch updates, templatize
- Great utilization, cash tight: billing cadence problem → move to shorter cycles (e.g., 28-day billing = 13 cycles/year, an instant 8.3% lift when conversion holds)
Do This This Week (No Excuses)
- Ship a one-page scoreboard: utilization, effective rate, mix, coverage — by role and service line
- Run the 30-minute weekly review; pick one scope rule and one price floor to enforce
- Map time to invoice on one service line; fix leaks you find
- If cash is tight, pilot 4-week billing on new accounts (disclose up front)
Simple scales. Fancy fails. Track the few numbers that matter and hold the line weekly. Profit follows.
Call to Action
I’ll install your utilization scoreboard, set role targets, and design a 90-day plan to raise effective rates and profit — without adding headcount.
We run just two free Agency Health Checks per month for qualified business owners — book HERE to claim one.
About the Author
Michael Argento, CPA
Founder + Fractional CFO at Argento CPA
Michael helps ambitious Canadian business owners align compensation with performance. From creative agencies and SaaS startups to scaling construction trades businesses, he builds financial systems that reward results — without sacrificing sustainability.