Agency & Consulting

An agency or consultancy sells the applied expertise of its people, billing by time, by project, or on retainer.

It is the most straightforward business to start and the hardest to scale, because capacity and cost both rise with headcount and revenue does not compound without more people.

Revenue is the difference between what clients pay for staff time and what that time costs, adjusted for utilisation and overhead.

Profitability is driven almost entirely by billing rate, utilisation, and how much of the work junior staff can perform.

• Utilisation rate across billable staff
• Average billing rate and rate realisation
• Revenue per employee
• Client concentration
• Proportion of retainer versus project revenue

Strong agencies show high utilisation, rising revenue per employee, retainer-weighted revenue, and no single client dominating the book.

The best build intellectual property or tooling that lets them charge for outcomes rather than hours.

• Strategy and management consulting
• Creative and marketing agencies
• Engineering and development shops
• Specialist technical consultancies
• Staff augmentation and contracting

• What is utilisation, and how does it vary seasonally?
• How concentrated is revenue among top clients?
• What happens if senior staff leave?
• Is there reusable intellectual property, or is everything bespoke?
• What proportion of revenue is contracted forward?