The 50/25/25 Profit Model can generate above-average profits for marketing communications agencies in the short term. However, to achieve both consistently high profitability and sustained growth, you need to carefully avoid the most common lapses in agency management:
1. Failing to align revenue, costs and profit for each agency role.
2. Not recognizing that billing rates and multiples are both important.
3. Not managing capacity in line with projected revenue.
4. Hiring for the present and not the future.
To better understand how to effectively apply the 50/25/25 model to your agency, visit our Resource Library.
Next month: Prosper Group’s new Digital Revenue Driver.
– Alex Halbur and David Bosses, Prosper Group