What's the secret to agency profitability? Hint: it's not just money.
When it comes to evaluating the success and performance of an agency, the focus is historically on financial data. It’s all people want to look at while spending little to no attention to non-financial data, even though they’re key factors in diagnosing your agency’s problems.
They aren’t completely separate concepts - they work together. Your financial data is a lagging indicator - where you’ve ended up, whereas the non-financial data is your leading indicator to diagnose why you did end up where you did financially.
Financials are precise, they give you an accurate picture of what happened in the business, but they aren’t necessarily a realistic reflection of your business model. Non-financial data can help give you strategic insight. Looking at non-financial data is an accurate way to get timely and specific insights on WHY your financial statements look the way they do. You look at your financial statement and say, “Okay, we aren’t profitable,” then you ask, “why,” and this is where non-financial data can come in.
Dive deeper into this topic with Ryan Watson, Partner at Upsourced, and Marcel Petitpas, CEO & Co-Founder of Parakeeto. Parakeeto is a company dedicated to helping agencies measure and improve their profitability by streamlining their operations and reporting systems, a problem he discovered while running his own agency.