Writing for people who run service businesses
Profitability, pricing, scoping and delivery: the parts of client work that decide whether a good project makes money. No growth-hacking, no listicles.
Profitability & margin
Project profitability: why your biggest client might be losing you money
Revenue tells you which client is biggest. It doesn't tell you which one is profitable. Here's how to work out the real margin on a project, and what to do when the number is bad.
·4 min read
How to calculate your agency's real hourly cost
Salary divided by 2,080 is the number most agencies price against. On a worked example it understates the real cost by 169%. Here's the full calculation you can copy.
·3 min read
Agency profit margins: what good looks like at 5, 15 and 50 people
Margin doesn't improve smoothly as you grow. On a worked example where revenue per head is identical at all three sizes, operating margin goes 14%, then 10%, then 12% — and the dip in the middle is structural.
·5 min read
Utilization rate: the metric that predicts agency failure
Ten points of utilisation is worth $26,640 a year per person on the worked example below — the difference between a 17% margin and a 28% one. It moves profit faster than pricing and nobody watches it weekly.
·5 min read
How to spot a project going over budget while you can still fix it
On the worked example below, a project at 52.5% of its hours and 35% complete in week four is already projecting a $20,000 margin down to zero. The signal was available in week four. Most agencies find it in week ten.
·5 min read
Cash flow for agencies: surviving the 60-day payment gap
In the worked example below, six months of steady growth produces $90,000 of profit and $18,000 of cash. The other $72,000 is sitting in receivables. Profit and cash are different businesses and only one of them pays salaries.
·5 min read
Effective hourly rate: the number that matters more than your day rate
A $1,200 day rate looks like $150 an hour. On the worked example below it turns out to be $94.74 — 37% lower — and the smaller client with the smaller fee is the more profitable one.
·4 min read
Why agencies with full pipelines still run out of money
A $1.2m pipeline weighting to $516,000 sounds like a solved problem. On the worked example below, only $162,000 of it turns into cash inside twelve weeks against a $255,000 cost base — a $93,000 hole behind a healthy-looking number.
·5 min read
Retainer pricing that's still profitable in month nine
On the worked example below, an $8,000 retainer starts at 36.8% margin and is losing money by month nine. Nothing went wrong — the hours crept up 3 or 4 a month and nobody was counting. Here's the mechanism and how to build it out.
·5 min read
Pricing & scoping
How to turn a client brief into a priced scope in an afternoon
A brief is a wish list. A scope is a list of things you will actually do, with hours attached. Here's a four-step method and a worked example that lands on a $48,000 quote at just over 50% margin.
·5 min read
A statement of work template that actually prevents scope creep
Most SOWs describe what you'll deliver and say nothing about what happens when the client wants more. Here's a section-by-section outline, plus the four clauses that do the real work.
·5 min read
Fixed price vs time and materials vs value pricing: an honest comparison
The same 300-hour project priced three ways. Fixed price starts at 50% margin and falls to 24% if the work runs 52% over. Time and materials holds 36.7% no matter what. Here's how to choose.
·5 min read
How to price a project you've never done before
Three-point estimating turns a 120-to-320-hour guess into a 193-hour number you can price against — and shows you the worst case leaves only 17.8% margin before you sign anything.
·5 min read
The change request process that protects margin without annoying clients
Six small extras on one project add 44 hours. Absorbed, they drop margin from 50.1% to 41.4%. Billed, the project ends at 48.5% on more revenue. Here's the process that makes billing them normal.
·5 min read
Why creative estimates are always wrong, and what to do instead
Stop trying to estimate better. Measure how wrong you usually are and multiply. On a hypothetical six-project history the correction factor is 1.29 — enough to move a project from 35.6% margin to 50%.
·4 min read
How to say no to scope creep without losing the relationship
Fourteen three-hour favours is 42 hours. On a $30,000 project that's $3,990 of cost and 13.3 margin points. Here's the language that stops it without making the client feel policed.
·5 min read
What to do when a project is 150% over estimate
A $60,000 fixed-price project heading for 1,000 hours instead of 400 loses $35,000 if you finish it as planned. Four options, worked through — the best one turns it into an $8,500 profit.
·5 min read
How AI changes what agencies should charge for
If a 300-hour project now takes 180, hourly billing at the same rate cuts your gross margin from $16,500 to $9,900 — a 40% fall at an unchanged 36.7% margin rate. What survives is what you charge for, not how fast you work.
·5 min read
Winning work
How to write an agency proposal that gets replies
Most agency proposals are written for the wrong reader and buried under credentials. Here's a structure that gets a decision, plus a template you can copy and send this week.
·5 min read
The discovery call script that filters out bad-fit clients
A discovery call should tell you whether to walk away, not just what to quote. Here's a 45-minute script with the exact questions, in order, and what the bad answers sound like.
·6 min read
How to respond to an RFP without burning a week
On a worked example, a 38-hour RFP response at a 1-in-6 win rate costs $21,660 in team time per win — against $24,000 of margin. Here's how to cut the cost without cutting your chances.
·5 min read
How to qualify a lead before you write anything
Writing a proposal costs real money — $855 on the worked example below. Here's a five-question scorecard that tells you whether to spend it, before you open the document.
·5 min read
Where agency revenue actually comes from: referrals, outbound and inbound
On the worked example below, referrals return $5,500 of revenue per hour of business development and outbound returns $400 — nearly fourteen times less. Here's how to work out your own numbers.
·5 min read
How to raise your rates without losing existing clients
A 12% increase across ten retainers lifts margin 40% if everyone stays — and still leaves you ahead if two leave. Here's the arithmetic, the script, and the order to do it in.
·5 min read
Red flags in a client brief, and what to ask about them
Most bad projects were visible in the brief. Here are the specific phrases to watch for, what each one usually means, and the question that turns a red flag into information.
·5 min read
Why your proposals lose to more expensive agencies
Losing to a bid 42% higher than yours isn't a pricing problem. It's a risk problem — the client is buying certainty, and your proposal didn't sell any.
·5 min read
Delivery & operations
Agency capacity planning: can you actually take the next project?
A team with 35 free hours a week can still be unable to start a project that needs 30. Here's the role-level capacity calculation that tells you yes or no before you sign.
·5 min read
The weekly operating rhythm that prevents client surprises
Most client blow-ups were visible two weeks earlier and nobody was looking. A 45-minute weekly agenda, with time boxes, that surfaces problems while they're still cheap.
·5 min read
Client status reports nobody dreads writing
A six-block status report format you can fill in in ten minutes, that clients actually read, and that quietly documents every decision you'll need later.
·5 min read
How to run a client portal that reduces your email volume
Most client portals add a channel instead of replacing one. Here's how to categorise a week's inbox first — in a worked example, 23 of 60 emails disappear — and what the portal has to do to earn that.
·5 min read
Structuring projects so handoffs don't lose context
Every handoff loses something. The question is whether it loses the decisions. A one-page handoff format and four structural habits that make any project survivable when the person leaves it.
·5 min read
What to track on client projects, and what to ignore
Five numbers decide whether a project is healthy. Everything else is decoration — and in a worked example, 25 unlogged hours make a 28.8% margin look like 36.7%.
·5 min read
How to rescue a project that's already gone wrong
A project quoted at 36.7% margin is heading for 10.7% and the client doesn't know yet. The projection to run first, the four levers that exist, and a script for the conversation.
·5 min read
Running distributed delivery teams across time zones
Three cities on a standard 9-to-5 give you 3 hours of overlap in one pair and 1 in another. Two small schedule shifts turn that into 4 and 2 — and the rest is written handover.
·5 min read
Team & capacity
When to hire your next person, and how to know you can afford them
A hire whose fully loaded cost is $118,000 a year needs 66 billable hours a month just to break even. Here's the capacity test, the cash test, and the ramp curve most agencies forget to model.
·5 min read
Contractor vs employee for agencies: the real math
Compared properly, an $80,000 employee costs $80.44 per billable hour at 70% utilisation and a $65/hour contractor costs $70.65. The comparison flips at about 80% utilisation. Here's the full calculation.
·5 min read
How to write a job post that gets good applicants
A job post's job is to filter, not to attract. Here's a reusable skeleton, the four things that make strong candidates skip your ad, and why leaving out the salary costs you the people you most want.
·5 min read
Screening candidates without wasting everyone's week
A five-stage funnel from 120 applications to one hire costs about 24 hours of senior time — $2,280 at a $95 loaded rate. Here's how to spend those hours where they actually change the decision.
·5 min read
How to spot AI-generated answers in take-home tests
You can't reliably detect AI-written work, and detector tools flag innocent people. The fix is task design: ask for decisions and process, then follow up live and have candidates explain their own work.
·5 min read
Onboarding someone onto a live client project in three days
A three-day plan to get a new person contributing to an active client project, with an hour-by-hour schedule, the six documents they need, and the four things you must not let them do in week one.
·5 min read
Performance reviews for small agency teams
Annual reviews don't work at eight people. Here's a 45-minute quarterly format with a one-page written template, how to talk about utilisation without weaponising it, and how to keep pay conversations separate.
·5 min read
Time tracking your team won't quietly sabotage
If five people lose two billable hours a week to Friday-afternoon reconstruction, that's 10 hours a week — up to $69,000 a year at a $150 rate. The fix is design and framing, not enforcement.
·5 min read
Comparisons
How to choose agency management software
The subscription is the smallest cost. On a hypothetical 12-person agency, migration effort runs close to three times the annual licence fee. Here's how to evaluate the decision properly.
·5 min read
ClickUp alternatives for agencies, and when it's time to leave
Outgrowing a tool feels like the tool getting worse. It usually isn't. Here's how to tell a genuine ceiling from a configuration problem before you spend a quarter migrating.
·5 min read
How to choose time tracking software for an agency
Half an hour of unlogged time per person per week costs a hypothetical 12-person agency 276 billable hours a year. Choose the tool on capture accuracy, not on reports.
·5 min read
How to choose proposal software for an agency
Cutting proposal time from 6 hours to 3.5 across 5 proposals a month frees 150 hours a year. Here's what to evaluate, and why the pricing engine matters more than the templates.
·5 min read
AI tools for agencies: what actually saves time
Two hours a week each across a hypothetical 12-person agency is 1,104 hours a year. Saved hours only become money if you can sell or reclaim them — here's how to tell which tools do that.
·5 min read
Project management tools for creative and marketing teams
Creative work breaks the assumptions most PM tools are built on. Here's what to evaluate — review cycles, capacity, and the commercial layer — instead of comparing feature lists.
·5 min read
Do agencies still need a PM tool when everyone uses AI?
AI takes a real bite out of coordination work. It doesn't touch the commercial layer — scope, margin, capacity, client accountability. Here's what changes and what doesn't.
·5 min read