Many professional service firms are being challenged today —by competition, retention of associates and clients demanding more for less. Whether you are a consultant, provide technology services, information management, market research, legal or other professional services, you need a strong partner to guide you with tax planning, have human capital challenges, retirement plan, financial and practice management resource needs.
If you are just getting started, we will help you with your company structure. The way you choose to incorporate may have financial implications as your business grows. Selecting the right structure is important. Our professionals understands how to determine which one is right for you to help minimize the tax burden and maximize profits in the future.
We can also help you create an actionable business plan, get you setup on cloud accounting software or provide outsource book keeping service. We understand the critical metrics to successfully manage a professional services organization.
Metrics for Effectively Managing Your Business
Client Service Costs – The cost of serving a client includes all of the regular fixed costs such as rent, payroll and utilities in addition to the marketing expenditures to bring a new client in the door and maintain them.
Client Retention – What is the longevity of your client relationships? Often a firm’s best prospects are its current clients. How are you at managing key client relationships? In some professional services firms, 20% of their clients generate 80% of the revenue.
Profitability – Understanding the impact, or contribution each respective area has on the firm’s bottom line is an important part of evaluating profit. One area of your firm may be more profitable that another and the same is true of clients.
Marketing expense as a percent of revenue – Some firms tend to limit marketing to personal networking and the management of a website without considering what truly differentiates their brand in the market place.
Technology expense as a percent of revenue – Technology spending includes computers, software, hardware, and also mobile devices and secure client portals. Technology spending in most firms exceeds marketing expense.
Realization – This metric compares how much a firm works in billable hours with what it realizes in earnings.
Utilization of staff – Considering the available hours your staff have to perform client work, are they fully utilized or do they have excess capacity? Understanding the capacity of your firm to handle new client projects is critical to serving clients well as you grow.
If your firm would like to learn more about managing the financial metrics of a professional services organization, we are here to help. Reach out to firstname.lastname@example.org.