What’s one mistake you’ve made as an agency leader you’ll never forget?

Several guests on this show have shared the same exact answer: “I wish I’d invested in my own financial literacy sooner!”

But, what financial metrics should you focus on the most?

Even if you answer that question—how do you (and your team) impact those financial metrics that matter most for your agency?

To answer these questions, in today’s episode, you’ll hear from Ryan Watson from Upsourced Accounting, where he & the team help agencies just like yours avoid financial pitfalls & achieve financial health. Ryan’s a former agency COO & CFO himself, so he comes with financial know-how but also real agency life experience.

In today’s episode you’ll learn:

• The 5 Financial Metrics successful agencies get right (from Upsourced’s own analysis of agency client data)
• An introduction to the Hierarchy of Financial Needs (that will help you determine the right financial metric to prioritize right now)
• The building blocks to a successful Project Profitability Analysis (which Ryan says is the most important thing you can do to getting a handle on your agency’s gross margin)

Want to get more content to support your agency life?

Subscribe to the Agency Life newsletter, check out past episodes, and find more content at teamwork.com/agencylife.

Prefer to listen, follow the show on your favorite podcast app:

Apple Podcasts: https://podcasts.apple.com/us/podcast/agency-life/id1446486346

Spotify: https://open.spotify.com/show/4vuIskDFN0jhIjBjhXwnte

Resources Mentioned in This Episode:

• Connect with Ryan on LinkedIn: https://www.linkedin.com/in/ryankeithwatson/
• Subscribe to the Upsourced Accounting's Channel: https://www.youtube.com/@UC5BS4Jty7-sSyd-dVaV9rkg
• The State of Agency Operations Report: https://bit.ly/3Szd2Vo
• Teamwork.com Profitability Reporting: https://bit.ly/3Ox19yf
• The 4 P’s of Time-Tracking Your Team Won’t Hate: https://www.teamwork.com/agencylife/podcast/the-4-p-s-of-time-tracking-your-team-won-t-hate/

00:00 Introduction to Financial Literacy for Agency Owners

01:54 Top-Line Revenue vs AGI (Agency Gross Income)

03:51 The 5 Financial Metrics The Best Agencies Get Right

04:50 Number 5: Recurring Revenue vs New Logo Revenue

7:31 Number 4: Forecasted Utilization

11:15 Number 3: Cash Reserves

13:10 Number 2: Operating Leverage

16:11 Number 1: Project Profit Margins

19:53 The Hierarchy of Financial Needs

29:34 The Margin Triangle

33:17 Project Profitability Analysis

41:05 Listener Q&A

50:19 Agency Life Fast Five