Utilisation-to-profit calculator

As your consultancy firm grows, the more permanent team members you will typically have and consequently the more important it is to ensure your team is productive.

The traditional method of measuring productivity is to use a metric typically called utilisation.

Utilisation can be defined as the % of days a consultant spends on chargeable work as a percentage of available days.

How firms calculate available days can vary, the important thing is that you are consistent.

However, founder-led firms often resist time sheets and utilisation tracking, driven by a desire not to re-create a ‘big four’ culture.

Some firms have succeeded in focusing on project outputs rather than inputs, but this is not always easy to do and will depend on the nature of your consulting work.

Which ever way you cut it, not measuring the productivity of your team is highly likely to result in progressive margin erosion.

Então, quão importante é a utilização?

In a tougher economic climate, as consultancies face increased pressure to maintain operational profitability and manage their costs effectively, measuring utilisation rates can help you identify if you are underutilising resources or not operating at full capacity.

Isso foi destacado no Relatório de Benchpress da consultoria deste anoConsultancy BenchPress report, the leading annual benchmark survey for founder-led consulting businesses in the UK and Ireland. For the second year running, top-performing founder-led consultancies highlighted profit and pricing as key growth opportunities.

With an average 1% improvement in utilisation delivering a 20% improvement in operating profit (for teams of 20 and above with average gross margin and net profit levels), managing your consultancy’s utilisation better could be the difference between sinking or swimming in challenging economic times.

The key question is:

Qual seria o valor do lucro incremental de uma melhoria de 1% na utilização em sua empresa?

Por que parar com melhorias de 1%? Se você alcançou uma melhoria de 5%, o impacto do lucro seria 5x como ótimo.

Like any process of targeting and accountability, the way you introduce and manage the communication around such targets is what will define your culture, not whether you choose to measure such critical success factors or not.

Este é um exemplo de como você pode melhorar o desempenho da sua consultoria. Para obter informações mais acionáveis ​​e comparar seus KPIs com as consultorias com melhor desempenho no mercado, explore o BenchPress de consultoria: uma versão abreviada do relatório está disponível para todos, enquanto o relatório completo está disponível para participantes da pesquisa de consultoria de referência e membros da rede de crescimento da consultoria. Artigo