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Thanks for coming back on Jason! Always a blast chatting with you.

Glad you enjoyed it!

Glad you found this episode insightful! Liston is pretty awesome :)

Glad you found it helpful!

You might have been! 😁

Was awesome having you on Matt!

Loved having you on the show @HeyJoeyTackett thanks so much for making time for us :)

Glad you enjoyed it!

I'm glad you found it valuable Malek!

Thanks for coming on the show Craig!

You can call it whatever you want, as long as the math is consistent. Unfortuantely, there aren't any "standard" terms for these tings. We're working on writing a book and trying to formalize it, but you will likely see a lot of different language used to describe these types of concepts.

I don't recommend basing utilization on the amount of time recorded for exactly the reason you mention, you're probably not going to get consistent compliance on people logging all of their time. Therefore, the basis for utilization won't be consistent and will make it hard to measure changes in utilization over time, it also creates the risk of false positive or false negatives. For example, you might think someone's utilization is very high, but it's just because they're not logging much of their non-delivery time, therefore making the basis of their utilization a smaller number than someone else. By using total capacity, we normalize the basis for utilization which makes it easier and less expensive to calculate over time, and makes it easier to calculate for different time periods. The other added benefit is that it becomes more accurate, as we're not trying to adjust it down for things like non-billable time, time off, holidays, etc. We are able to see the cost of that non-delivery time reflected in the utilization metric and again avoid the potential false negatives/positives that could be associated with someone's utilization appearing to move up or down, simply because of an increase or decrease in time-off (for example)

Thanks Clarence!

Thank you Marc Antoine! Glad you enjoyed it :)

Thank you!

That's a great idea! Thanks for chiming in :)

It sounds like what you effectively did was increased your ABR by decreasing the amount of time it takes to get deliverables done / increasing efficiency of the time you're putting in. Sometimes just applying the constraint is enough to push the team to figure out ways to get more done in less time.

@@marcelpetitpas - That and we limited WIP. It reduced context switching and put the emphasis on finishing things instead of starting them.

Certainly important to consider how to make this kind of move without degrading the client experience and to *earn* the right to move to this model by finding a way to achieve great outcomes with more efficiency.

Generally yes, but there are nuances and edge cases. For example, some agencies have "freelancers" who are retained for a certain number of hours per week on an ongoing basis and need to be utilized, in a case like this, assuming that freelancer is performing a "core"s service for the agency, it they may be considered a delivery cost. However, the generally acceptable starting point is to move freelancers, contractors and whitelabel partners to Pass-Through expenses and deduct from AGI.

@@marcelpetitpas thanks. Does this conflict with Profit first approach or can they work together?

​@@zakirhoosen4404 It's more of a continuation of the basic principles of Profit First. The basic principle with profit first (at the most fundamental level) is to work backwards from the net profit you want to have. We have the same view. Howver we have more specific and nuanced definitions of the different things that need to be measured thereafter that are specific to professional services firms, and go deeper on the other metrcis and levers to pay attention to that help you drive performance between financial touchpoints. Does that make sense?

Thank you!

Agreed!

I think what Marcel is saying is that letting go of things is a process, and one that can be challenging. In his experience, the things that can create resistance aren't always objective or logical. They can be rooted in psychological challenges that have nothing to do with the work itself or the people doing it.

Great question Trent. Generally the best practice is to keep things broader/more general at first for a few reasons: 1. It will be easier to discern what kind of time belong in what bucket 2. There will be less complexity to tracking time, and fewer options to chose from. That means less room for error leading to data cleanup 3. You will be able to collect larger samples of data more rapidly, because you won't be diluting your data across many buckets - which makes a report like this insightful much quicker. Our approach is always to start simple and broad, and then add complexity as needed later on. Generally, we try to align the tasks to buckets that are in alignment with how you think about "Roles" on your team, that way this data is easier to use for forecasting capacity/resources as well. For example: - Development - Design - Project Management - Strategy - Copywriting In this example, you would make sure that every time entry can be mapped back to one of those buckets. If you're tracking time inside a PM tool, this might mean making sure every task or time entry is "tagged" with one of those roles. That would allow you to make things as detailed as you like in the PM tool, but still end up with clean and consistent data for this kind of reporting. Hope that helps!

Not reallllly what we were getting at. Time Tracking should never be used as a weapon to 'show people how unproductive they are. If we find that someone is constantly too busy, tracking more than 8 hours a day and starting to slow down, this would be the opportunity for us to consider another hire to help take some of the load off. In a case where someone is logging time but things aren't 'getting done' then it can help facilitate the conversation..."I see this is typically taking you 2 hours to complete, but from my POV it's a 20 minute task. Is there anything you need on your end to hit this mark?". Stuff like this!

You betcha! drive.google.com/uc?export=download&id=1CRWqRcMHFSit-xUcxD612xpB6SHsqR87

Thank you!

Our pleasure!

Really excited to work with you and your team Nihar!

Right now we're seeing average multiples on SDE (Seller Discgretionary Income) or EBITDA (Earnings before Interest, Taxes, Depreciation and Ammortization) of approximately 4-6x. That's up a bit from the last few years, we used to see closer to a 3-5x standard mutliple. If an agency has over $1m in EBITDA per year, that can often add 1-2x to the baseline mutliple as there is less competition for those kinds of companies. We go into good detail on this in our interview with Michelle Seiler Tucker here: ruclips.net/video/wPSkFvHUsTo/видео.html&ab_channel=Parakeeto Of course there are a lot of factors that can influence a multiple, especially how strategic the acquisiton is to the acquirer, and have seen multiple above 10x but those are more unusual. Hope that helps!

Thanks so much!!

lmao