Agency Profitability Management with Marcel Petitpas
Marcel Petitpas is the CEO of Parakeeto, a company that helps agencies improve their profitability through better operational data and time tracking practices.
Marcel's Background
Marcel's first business was a virtual reality services agency for real estate agents. Through that experience, he encountered cash flow issues, thin margins, and profitability problems that made scaling extremely difficult. Those challenges led him to develop systems specifically for agency profitability.
The Agency Model Generator
Marcel built a tool called the agency model generator that helps you model profitability by inputting your team size, hours worked, compensation, and expected billable rates to calculate the revenue needed and how much can be allocated to different business areas.
Time Tracking Best Practices
One of the biggest mistakes agencies make with time tracking is creating excessive detail and complexity. There's a balance needed between insight into people and insight into processes. The goal is to get actionable data without creating a burden that slows your team down.
Project Pricing and Margins
When designing a project, the selling price should leave a margin between 50-70% after accounting for pass-through costs like ad spend and print budgets. This margin range gives you enough room to cover overhead and generate profit.
Value-Based Pricing
Marcel advocates for value-based pricing, especially for digital marketing agencies. This approach allows you to detach the price from your cost basis, meaning you price based on the outcomes you deliver rather than the hours you spend.