Have you ever wondered what the $ value earned is for each percent of extra billable work that your team does?
Take a small professional services company. The company has:
- 10 chargeable staff
- An average billing rate of $100 per hour
- Staff work 40 hours a week and 48 weeks a year.
In this case a 1% of chargeability is worth $19,200 of revenue and profit. In other words if its staff misses their target by 1% then your firm loses $19,200 of billings and profit.
Conversely, that is also what the business gains for every percentage point that its employees exceed their average chargeability target. This also assumes that every chargeable hour billed.
So what is it in your business? Leave a comment and let us know.
Either way this great collateral for a business case for a change to systems or processes that will increase the chargeability in your professional services company.
