-10% to 40%+ EBITDA in 9 Months - Part 3/4

The power of dashboards saved this agency from bankruptcy.

This week in part 3 of 4, we’re going to do a deep dive into the finances behind this agency that was losing money.

If you missed part 2 last week, read it here.

I’m Nick Avaria, agency owner, and founder of Agency Acquisitions. Every week I share case studies and insights of growing businesses while making more profits.

Revenue + Workload Forecasting - 2 dashboards joined as 1

By the end of this step, we took profits (EBITDA) from 10% to 35%

How? 

Compound decision-making. 

When you make 1 great decision after another the value to the business goes non-linear, meaning:

1+1+1= 3 becomes 1+1+1= 8

The 1 dashboard that drives the most decision-making power is the Revenue+Capacity combination Dashboard

Believe it or not less than 1/10 agencies have both a revenue and workload forecast that is updated monthly at minimum.

This company didn't have a capacity forecast and the revenue forecast was only accurate within 30% (anything more than 5% is not usable for quality decision-making).

Revenue forecast = Sales forecast + ongoing client revenue forecast

Capacity forecast = assigned hours per person and role + amount of available time per person and role (best practice per day of the month, by month as a worst-case scenario)

An accurate Revenue forecast is VERY valuable. Let's give it a value of 5 points of decision-making power.

A well-done Workload forecast has a value of 3 points of decision-making power.

When combined you’d think that they give you decision-making power of 5+3=8 …. 

But when combined with calculations weaving them together they power up.

I would conservatively say that the combination report has a value of 20+ decision-making power.

Why?

Because:

Do you need to hire? Fire? Get contractors or employees? Should you buy that software? Should you overhaul some large internal processes? How much more or less should we spend on marketing and sales? What about 1-time expenses?

The combination report gives you huge amounts of control and accuracy over:

- How much money and time resources you have 

- How much money and time you will need months from now

Translation: You can now predict the future accurately. In a business, this is THE superpower. 

And that's exactly what we pulled off.

Decisions that were hard become effortless. 

Waste was cut 

Staff went from thinking they were busy to knowing exactly how busy they were.

This meant more productive + happier staff which  = less turnover = more profits

Because we could generate compound wins via decision-making, profits went up predictably month over month

If you want to learn step by step how to put this report together you can see that training below.

Next week we’ll cover how we used data to hold managers accountable for the amount of resources they were responsible for. 

And how we did this to squeeze out another 9.5% EBITDA to take us to 44.5%

Here’s the full video breakdown:

Do you want to chat about setting up dashboards and improving EBIDTA for your agency?

Use this link to apply to see how I can help you scale your agency before the end of 2024.

Nick Avaria