Time management and opportunity cost in business are more closely related than many agency leaders may suspect. When you look at how the two concepts connect, it’s clear that your time management skills can significantly impact your opportunity cost in decision-making.

Service based businesses constantly face time-related decisions. Do you invest in a long-term project that requires more resources but promises a steady contract? Do you bring in new clients even if your employees are nearing capacity? And with all these time and time-management-related decisions, there are different opportunity costs.

Since no business can do everything at all times, understanding how to manage your time and increase efficiency can help you mitigate the opportunity cost of upcoming business decisions.

Understanding Time Management in a Multitasking Environment

Daily workflows necessitate varying degrees of multitasking, especially in startup businesses and fast-paced digital agencies. Employees who struggle with time management may have difficulties adapting to a company’s needs. In a multitasking agency environment, employees may face several time management hurdles.

Juggling multiple projects

Agencies often have to balance multiple projects simultaneously, which can be challenging. It's important to prioritize projects and set deadlines for each one.

Dealing with unexpected tasks

Things come up unexpectedly in any job, but they can be especially disruptive in an agency environment. It's essential to be flexible and able to adapt to change.

Managing client expectations

Agencies need to manage client expectations carefully. Clients often have unrealistic expectations about what an agency can accomplish in a given time, leading to an increasing opportunity cost. It's necessary to set clear expectations and communicate regularly with clients.

Dealing with distractions

There are many distractions in an agency environment, such as email, phone calls, and social media. It's essential to focus on the task at hand and avoid distractions.

Staying organized

Fast-paced agencies require organizational skills, including keeping track of projects, deadlines, and client information. Business software like Elorus can help streamline your efforts with time tracking, project monitoring, and reporting tools.

The Concept of Opportunity Cost in Business

So, what is the opportunity cost? It’s the value of something you must give up to gain something else. Opportunity cost in business is the value of the best alternative foregone when you make a decision. For example, if a company decides to invest in a new product, the opportunity cost is the potential profits it could have made from investing in another product or project.

Opportunity cost in business is a critical concept because it helps brands to make decisions that are in their best interests. By considering the opportunity cost of different options, businesses can ensure that they are making the most of their resources and not making decisions that will negatively impact their bottom line.

Increasing opportunity cost can dramatically influence resource allocation. One resource there’s seldom enough of is time. Digital agencies and service-based companies must strategically determine how to allocate their time best to serve clients and customers.

Example of Increasing Opportunity Cost

As an opportunity cost example, a digital marketing agency has limited time and resources to allocate to its clients. If the agency focuses on a new client, it may need to remove resources from its existing clients. This means the existing clients may receive a different level of service than before, and their results may suffer.

The opportunity cost of taking on a new client is the potential loss of revenue from the existing clients. The agency must weigh the benefits of taking on the new client against the potential costs of jeopardizing the relationship with its existing clients.

Increasing opportunity cost can also occur when a digital marketing agency invests in new technology or hires new staff. These investments can take away from the agency's existing resources, impacting its ability to serve its clients. However, they can also help the agency become more productive in the future.

Any agency or service based business must consider new investments' potential benefits and costs. How will a new investment eat into your time? What resources will it require? What do you stand to gain, and what do you stand to lose? Finding the intersection between time management and opportunity cost can help you better answer these questions. 

The Intersection of Time Management and Opportunity Cost

Time management and opportunity cost affect each other greatly. When we choose how to spend our time, we also choose what we are giving up. This is the opportunity cost of our time. For example, if you spend extra time working on a specific client’s account, you’re giving up the opportunity to use that time on your other clients. Therefore, the opportunity cost of that extra time spent on one client may be the inability to service your other accounts fully.

Now, apply that thinking to your business as a whole. Every time-related decision in business has an associated opportunity cost that can present several different pathways your brand could take. If you make decisions or investments that are time-inefficient, you could face a steeper lost opportunity cost compared to a decision that made more effective use of time management. Calculating opportunity cost can help you determine the ideal course of action. 

Simple Time Tracking Solution for your AgencyAchieve the great time management and productivity control your company needs.

Impact on Business Efficiency and Client Satisfaction

When you look at opportunity cost in decision-making and use time management to maximize your choices, you can increase efficiency and client satisfaction in your service business. While mastering time management and understanding opportunity cost can represent positive net changes for your business, failing can lead to inefficiencies, poor decision-making, and soured client relationships. As an opportunity cost example, if you prioritize a project with potential that may not yield results for months over one that could give a client an immediate win, you could face negative reception. 

Strategizing with Opportunity Cost for Efficient Time Management

Ultimately, your business must find effective time management strategies to test new opportunities. A few best practices can help you maximize your available time and free up resources to focus on business-critical tasks.

Task prioritization

Identify the most important tasks and focus on them first. You can create a to-do list and rank the tasks based on their importance, urgency, and cost/benefit.

Delegation

Assign tasks to others so that you can focus on the most important ones. When delegating, be sure to communicate the expectations and deadlines.

Time blocking

Schedule specific times for specific tasks to help you stay on track and avoid distractions.

Utilizing relevant technology

There is a plethora of tools that you can take advantage of, like time tracking, project management automation, and AI tools that will help you manage your time more efficiently. For instance, Elorus offers features to help you keep tabs on your billable hours, direct your projects, and automate tasks.

Equipping your agency with the right tools can help you when calculating opportunity costs and boost your overall business efficiency.

Elorus can help you master time management in your business

Time management may come naturally to some employees and agency leaders. Fortunately, Elorus can help with our all-inclusive business software that is backed with robust time-tracking, reporting, accounting, and invoicing features so you can more clearly see the opportunity cost of time-related decisions. Get the most out of your business data and find new efficiencies when you sign up for free with Elorus today.

In the fast-changing world of digital agencies, staying up-to-date means staying on top of technology trends. If you're an IT manager aiming to keep your company in the lead, your role is all about adopting the latest technologies and smoothly fitting them into your day-to-day work.

Today's IT professionals are more than just problem solvers. They guide their companies through the complex world of technology, helping them to stay ahead of the game.

Whether you're a marketing agency, a law firm, or a business consulting agency, it's crucial to assess your technology portfolio, boost staff training, and draw inspiration from success stories of tech adoption. But what does technology adoption look like, and how can it be brought to life in your company?

More often than not, IT departments lead the charge regarding technology adoption. With the support of tools like Elorus, you can unlock the benefits and inspiring success narratives of effective tech integration.

The Impacts of Adopting New Technology in a Service Based Company

With a smartly laid-out technology adoption strategy, you can see rapid returns and near-immediate impacts across your business. Whether improving your services or enhancing overall digital security, understanding how new tech can impact your service based company can help you influence your colleagues to buy a new tech solution or increase corporate buy-in.

Increased Efficiency

New technology adoption can automate time-consuming tasks such as project management, time-tracking, invoicing, and data collection. These gains, in turn, free up your employees to focus on providing top-tier services to clients and partner companies.

Improved Service Delivery

Consistency, data reliability, and more acute insights can help you leverage data to improve service delivery. Any service based company can employ new technology platforms to gain more granular insights into their business performance, leading to more reliable services and stronger agency-client relationship. 

Enhanced Communication and Collaboration

Newer software tools can help you streamline and enhance communication while enabling global collaboration. IT managers of distributed workplaces understand how important centralized communication can be for functional, successful teams.

Cost Saving

Technology can help you spot process improvements, workflow bottlenecks, inefficiencies, and areas of opportunity, which can directly translate into cost savings for your business. You may be spending too much time on invoicing and missing out on potential expansion opportunities, or your current platforms may not show a complete view of your incoming data, causing you to miss out on performance improvements.

Case Study:How a well-established law firm has increased its productivity and income using the Elorus time tracking

Increased Revenue and Scalability

The right software solutions and technology improvements can scale alongside your business and help you increase revenue. Combining cost savings with greater automation potential and more reliable data points allows you to grow your brand smartly and sustainably.

Competitive Advantages

Businesses have greater access to data and new technology than ever before. How they use these tools can often define their successes or failures. New technology offers better access to data that can inform critical business decisions alongside competitive advantages related to efficiency gains and growth potential.

Improved Security

Many software platforms an IT manager might propose will come standard with robust encryption tools and security features. This simplifies managing sensitive client information and financial data and helps you build a reputation as a trustworthy service provider.

Employee Satisfaction

You will likely see improvements in overall employee satisfaction by eliminating redundant tasks, automating time-consuming processes, streamlining communication, and reducing employee overworking possibilities.

New Technology Adoption Best Practices for IT Managers

Since IT managers are often the most likely to suggest new technology platforms and solutions, they must come to each proposal with clear intentions, a solid business case, and a way to track performance.

Have clear goals and objectives

What is the purpose of implementing new technology in your business? Are you looking to streamline existing processes? Will a new platform improve your services and client relations? Before investing in new tech, define your goals and objectives, both in the short and long term.

Build your business case

Do your research and identify the top solutions. This means gathering information about your existing technology limitations and bottlenecks, the potential solutions, and the pros and cons of each new technology adoption strategy. Once you have identified the top solutions, you can do a SWOT analysis or use a similar strengths assessment. After that, you can structure a solid implementation plan. This plan should include the steps you’ll take to implement the solution, the resources you’ll need, and the timeline for implementation.

Communicate your business case to stakeholders

Come prepared with costs, analyses, and projections to help you explain the short and long-term ramifications of investing in a new technology solution. Be sure to specify whether it's a subscription-based model or a one-time investment, a detail that can be reviewed later as your company expands.

Conduct a pilot program

Mid-sized and large companies often initiate technology adoption on a small scale before rolling it out to the entire company. Usually, an IT manager does this to avoid disrupting internal processes. Thus, the new technology is first implemented at a departmental level. The company then monitors its impact on current processes and workflows before proceeding with full-scale adoption at the company level.

Review and adjust

Take the time to track user progress, gain insights from training, and find out what is and isn’t working for trainers and trainees. Not everyone on your team will have the same tech aptitude, familiarity, or comfort, so you must adjust your new technology adoption training approaches over time. In addition, you should consistently review your company’s performance against your KPIs and make any necessary changes. Also, source feedback from your employees and clients to determine how technology is working in practice and that it’s still meeting your needs. 

Don't cut corners when it comes to training

Create training materials in various formats — such as videos, walkthroughs, tooltips, in-app training, PDFs, or live online courses — to bridge the gap between technical and non-technical staff. You should base the training format on the nature of the new technology you introduce.

Ensure security and compliance

You should ensure the security of your company's or client's data. Especially in law firms and consulting firms, there are often specific regulations about data management, client confidentiality, and other aspects of technology use. Technology managers must ensure their firms' systems and practices are in compliance with these regulations. For example, Elorus software, which processes sensitive client data, is certified with ISO 27001. This certification demonstrates that Elorus has implemented robust security measures to protect customer data.

While this isn’t necessarily an exhaustive list of best practices, you can use these tips to level out the technology adoption curve and make getting employees up to speed easier.

Technology Adoption Examples

What does it look like when a service based business successfully navigates new technology adoption? Elorus has experience helping companies implement and leverage our software to its maximum potential.

Constantly tracking work time in a mid-sized law firm

By using Elorus's time-tracking features, a well-established law firm increased its productivity and income significantly. Prior to adopting our platform, the firm struggled with recording times accurately, and the absence of historical performance data occasionally led to inaccuracies in their service costing.

By leveraging the detailed service costing, accurate time tracking (which includes both billable and non-billable hours), and comprehensive invoicing features of the Elorus platform, Koutalidis Law Firm was able to speed up its invoicing process and enhance its turnover.

Effectively managing the company’s finances of a post-production team

Before using Elorus, a post-production agency was in need of a reliable and intuitive way to manage the company’s finances. In addition, the agency was looking for project analysis tools to allow for more precise cost accounting for services.

By adopting the Elorus business technology platform, CandyshopVFX has been able to readily view detailed reports of the company’s financial data, cost services as needed, and efficiently manage expenses and invoices.

Case Study:How a telecommunications company has fully automated the billing process of its subscribers using Elorus

Elorus can help you make the most of technology across your business 

 If you’re an IT manager looking for a comprehensive business technology platform to empower your service based company, Elorus can aid you with new technology adoption. Our all-inclusive business software offers access to time-tracking, invoicing, expense management, and reporting tools to help you maximize your data, increase buy-in, and improve service delivery.

Business consulting helps organizations improve performance, solve problems, and make better decisions. As a consulting firm, your role extends beyond problem detection, becoming the architects of solutions, activators of change, and mentors guiding businesses to implement necessary transformations.

Whether you're operating in marketing, finance, or operations, your choice of business model shapes your operation's core, client engagement, and growth potential. It's crucial not to pledge allegiance to a model mindlessly. Before committing to a business model, you should familiarize yourself with standard consulting models and emerging trends and strategies.

The Most Common Consulting Firm Business Models

Depending on your niche, area of expertise, and goals, you may benefit from some of the most common business models that consulting firms employ.

Traditional Consulting Model

In the past, most consultancy firms relied on a traditional consulting business model, where individual consultants would work on one-off projects and specific client initiatives. That consultant identifies areas where the client’s operations could be improved and proposes solutions. If the client’s data is thorough and easily accessed — and the consultant’s expertise is a good fit — the traditional consulting model can still be valuable. Today, however, some businesses prefer newer and emerging consulting models that offer ongoing relationships and continued collaboration.

Freelance Consulting Model

Freelance consultants most commonly work solo or with a small team of independent contractors and collaborators. Instead of prioritizing client quantity, freelance consultants provide specialized, high-dollar services to a manageable client roster. However, since this model depends on your constant presence, it’s harder to strike an agreeable work-life balance.

Agency Consulting Model

For this model, think of your typical consulting firms or agencies. Going the agency consulting route often means focusing more on management and delegation than the day-to-day needs of client projects and campaigns. Instead, you’ll leverage a team of consultants at the associate, junior, and senior levels to handle most client-facing responsibilities.

Productized Consulting Model

Most commonly, this model develops as an extension of one of the prior three models. A productized consulting model focuses on providing services presented as products with predetermined, set prices. In return, the consulting firm offers its clients clearly defined deliverables. This model sometimes requires much repetition, with less client-specific, customized work.

Emerging Consulting Business Models

Alongside a few more recognizable consulting business models are several emerging trends that could continue to alter the industry landscape.

Collaborative Consulting

Collaborative consulting takes the diverse skills of industry experts and applies them to mutually defined problems to find the most effective solutions. While this can be a more resource-intensive approach, it can generate some of the most significant returns by pulling in several experts. Collaborative consulting can include low fixed and high variable costs, and it also involves pulling in knowledge and data from other consultancies and companies.

Continuous Consulting

Continuous consulting marries data analytics and subscription-based services to develop an ongoing consultancy platform for short- and long-term needs. This model combines consulting with data insights to generate recurring, continuous business opportunities. It often requires a high degree of interaction between client and consultant and the delivery of new services to an existing client base.

Instant Consulting

While many consultancy models focus more on long-term, foundational adjustments that can steer a brand to success, other consultants work to provide immediate wins to their clients. Instant consulting works best for projects where consultants may not require extensive research to provide their insights and expertise. This model can deliver immediate, measurable benefits, even at the beginning of a project.

Though these consulting business models are still newer to many, they’re on the rise within the industry. As technology intertwines itself more with consulting, instant, continuous, and collaborative models will likely continue to grow in popularity. For more information on these consultancy models, Sioo’s research provides further context.

Simple Time Tracking Solution for your Consultancy
Achieve the great time management and productivity control your consulting business needs.

How do you choose a suitable business model for your consulting firm?

Before taking on clients and starting networking, you should define your consulting firm strategy more clearly and understand how that could influence your consultancy.

Assess your expertise

What are you good at? Do you have a specific niche? Are you certified, licensed, or otherwise professionally recognized? Your skill level can play into your chosen business model. For instance, if your expertise is highly specialized and high-value, the traditional consulting model may suit you best.

Define your target market

There’s a gulf between a startup business owner and a corporate C-suite, so you should determine who you’ll consult and what value you can offer them. For a startup, you may be able to help a business owner grow and expand. For a corporate brand, you might revitalize a failing department or lead a large-scale marketing initiative. As a result, you should consider choosing between productized and agency consulting models accordingly. 

Analyze the competitive landscape

Find out precisely how competitive your chosen market is. For instance, marketing consultancy can be incredibly competitive, so you should ensure you have a diverse skill set or a robust portfolio if that’s your chosen industry for a consulting firm or even a solo business. However, you may see more success in a crowded market with collaborative consulting.

Consider your business goals

You may be interested in freelance consultancy if you want to call all the shots in your business and work with a smaller roster of high-quality clients. If you want to build an extensive consulting practice with high revenues, the agency consulting model could provide a way to engage with numerous businesses.

Evaluate scalability

As you evaluate the growth potential of your chosen consulting business model, you must consider whether it can scale to meet your evolving needs. For instance, if you start as a solo industry consultant but face high client demands due to your unique skill set, how do you plan to grow your business sustainably? One strategy is to consider models that are independent of your personal involvement. If you aim to scale your business, options like the productized consulting or agency model could be fitting solutions.

Consider the digital environment

What does your business model require of you regarding digital resources? Are you aware of the latest trends, forecasts, and projections? Your digital aptitude can help determine your consulting firm strategy.

Test and iterate

Constantly test your chosen business model's performance in real-time and adjust when needed. Gather client feedback and use current data to understand how your brand reacts to new initiatives and to find the most successful workflows. You might start with one business model and then tweak it to meet your client's needs better.

Choosing a consulting business plan can set you up for success or lead to failure. Take your time when gathering market data, audience insights, and competitive reports. Making the best decision for your brand now can save you from difficulties down the road. 

What challenges and opportunities do consulting firms face in maintaining and evolving their business models?

Adjusting an existing model isn’t always the most straightforward of tasks. Similarly, maintaining that model can be problematic in the face of digital disruption and economic uncertainty. However, choosing a business model that suits your consulting firm can offer several opportunities.

Challenges

Competition

In most industries, there’s always someone else willing to do your job faster and cheaper, which is why your business model needs to reflect the value a client gets from collaboration with your brand. In short, your consulting business model must give you room to react to the competition and enhance your service offerings.

Digital Disruption

New technology can impact how clients react and spend money on your services. For instance, the ongoing expansion of AI-powered technology has shaken up several industries, making it harder for consultants to maintain existing business models without accounting for AI.

Economic Uncertainties

Fewer clients want to spend much money in the face of a potential recession or global economic crisis. Understanding how economic anxieties impact clients and your consultancy can help you navigate unsteady financial climates.

Changing Client Needs

As clients grow, expand, and adapt, so will their needs. Your clients may add new services that fall outside your consultancy scope or area of expertise. 

Opportunities

New Markets

Shifting your consulting business model can allow you to tap into previously inaccessible markets. Whether developing a collaborative consultancy partnership or hiring new associates with diverse skill sets, shifting or adjusting your business model can give you more room to grow.

Digital Transformation

Evolving your consulting firm strategy can impact and improve digital transformation. Incorporating business tech platforms like Elorus into your existing business model can help you scale and adjust performance as needed using readily available data.

More Diversified Service Offerings

With the possibility of expansion and market competition comes the potential for diversification. Whether that means bringing on new staff in a consultancy firm or offering collaborative consulting with trusted partners is up to you.

Of course, these aren’t the only challenges and opportunities an industry consultant may face when shifting their business model. Using the right business software is helpful to best adapt to changing market circumstances, business needs, and client demands.

Elorus can help you boost your consulting business 

Whether you’re deciding the business model of your consulting firm for the first time or adjusting your existing strategies, it’s helpful to have the backing of data. Elorus supports consulting firms by offering time-tracking, project monitoring, and reporting features so you can review consultancy performance in real-time and make adjustments as needed. Sign up for free with Elorus to learn more about our software platform and how it can benefit your consulting brand today.

More than ever, employees show the signs and symptoms of working too much. According to Gallup, 76% of employees experience burnout on the job at least sometimes, with Robert Half noting that 41% of employees are more burnt out now than a year ago.

Though some business owners assume more working hours translate to more productivity, overworked employees come with high costs. Burnout presents several consequences, from financial pitfalls to social repercussions. As such, you should take stock of your employees’ well-being regularly and learn the ins and outs of overwork to spot the signs of burnout.

The financial costs of overwork

As a digital agency owner, you should understand how overworked employees can impact you financially. It’s easy to assume that more hours equals more income, but the opposite is more likely to be true. Financially, overwork can impact staff retention, cost clients, and even affect ongoing healthcare expenses.

Increased turnover costs

Per Gallup, employees are around 2.6x more likely to search for other jobs if burnt out. If your teammates are constantly stressed, overworked, and worn down, they’ll likely seek employment elsewhere. Not only does this paint your business as a bad workplace, but it also means you’ll have to reinvest in hiring and training. More burnout means more turnover and, therefore, more expenses. Finding a suitable replacement for a highly skilled worker can be much more difficult if you work in a specialized industry.

More errors and client revisions

A burnt-out employee is likelier to make mistakes that can impact your bottom line and reputation. It could be small, like an employee missing common errors in a proof. Or, it could be a severe financial mistake with ad spend. Either way, employee mistakes will lead to more client revisions, redoing tasks, and potential loss of clients. On the other hand, a rested, happy employee is less likely to impact an account negatively.

Impact on healthcare costs

Overworked employees know how stress can affect health and wellness. From emotional burnout that requires regular care from a mental health specialist to physical burnout that leads to illness can cause employees to use their healthcare benefits much more frequently. Plus, missed time from a burned-out employee means more work for your other team members, increasing their chances of overwork as well.

The productivity costs of overwork

Employee overworking impacts far more than your bottom line. It can also cause subtle effects that drag down your agency’s productivity.

Burnout causes creative blocks

Overwork, especially in creative roles typical in digital agencies, can lead to burnout which, in turn, can diminish creative output. An employee showing signs of overworking may express reduced creative capacity or difficulty with regular workloads. Healthy boundaries and time to unplug can help boost creativity and prevent burnout.

Lower team morale

Overwork can result in lower confidence, impacting collaboration and decreasing your team’s quality of work. Often, burnout has a domino effect. When one employee is overworked and has lower output, the added stress can impact coworkers and teammates. Employees are more conscious than ever about workplace conditions, so consider your team’s needs and actively work to improve morale.

Sick leaves and absenteeism

When working too much, agency burnout can cause illnesses, requiring employees to use sick days. Overwork can increase how frequently your employees miss work, significantly impacting your project timelines. It can also lead to absenteeism, which can, in turn, lower team morale and productivity. 

Simple Time Tracking Solution for your AgencyAchieve the great time management and productivity control your company needs.

The impact of overwork on brand image

Outside of overworked employees' financial and social impacts, burnout can also affect your brand’s image and how clients, prospective talent, and peers view you and your digital agency. Between talent acquisition and client relationships, low employee morale can impact your brand image in ways you may not suspect.

Talent acquisition

Overwork can diminish your digital agency's reputation, making attracting and retaining highly qualified employees harder. Social media and employee review platforms like Glassdoor allow unhappy employees to bring attention to the challenging conditions and unfair treatment they encounter. Today’s digital agency owner needs to worry about far more than just word of mouth if disgruntled employees decide to start speaking their minds. No one wants to take a new job at a company with a reputation for burnout or a toxic work environment!

Client relationships

A client is less likely to interact positively with a burnt-out employee. While some clients are more forgiving than others, negative interactions with overworked employees can sour your relationships and create harmful word of mouth about your agency. Conversely, a happy employee is liable to go the extra mile needed and leave a positive impression on clients, helping to bolster your agency’s reputation.

How to prevent employee burnout

Now that you understand the signs of overworking, familiarize yourself with how to prevent employee burnout. You can take several proactive steps, from training your team leads to more capable spot disengagement to cultivating a healthy, productive agency culture.

Promoting work-life balance

You can improve your agency’s work-life balance in several ways, such as introducing flexible hours and remote work options or enforcing “no-work” periods for creative rejuvenation. Robert Half reports that 70% of professionals who can set their own schedules work more hours than they used to. As an added benefit, a positive work-life balance can also help attract top talent to your agency, making it easier to grow your brand healthily and sustainably.

Training for team leads

With some training, you can equip your team leads to spot critical signs of employee burnout. These signs include decreased productivity, lower engagement, behavior or attitude changes, increased errors, overwhelming expressions, and pessimistic time attitudes. From Gallup, employees who say their manager is always willing to listen to their work-related problems are 62% less likely to be burned out. By training your team leads proactively, you can prevent overwork from settling in before it becomes an issue.

Leveraging technology in your processes

Digital agencies should use time-tracking and project management software to analyze efficiency and plan projects. Time-tracking software like Elorus can highlight inefficiencies in processes or tasks that take longer than they should, enabling leaders to make improvements and reduce unnecessary work. You can also use these tools historical data to improve project planning and prevent a frantic, last-minute scramble to push a project across the finish line.

Cultivating a healthy agency culture

Spend time creating a culture that values a sustainable balance of well-being and productivity. Employees want to know they’re appreciated just as much as finances. Lead by example, which could mean taking the occasional mental health day yourself or adhering to any “no-work” periods you develop for your team members. In addition, it should be a good idea to organize team bonding activities several times a year and reward employees’ good behavior at every opportunity.

Equip your brand with the right tools to prevent employee overwork 

Reviewing employee timecards to ensure your team members aren’t working too many hours and using software greatly benefits your brand. Platforms like Elorus can help eliminate redundant tasks, lead to better data insights, and make it easier to spot the signs of overworked employees before they harm your brand image. Sign up for free today to learn more about Elorus and our comprehensive business software.

The cost-benefit analysis is one of a digital agency's strongest tools in its arsenal. You can quickly assess your projects and decisions using available data and analytical tools to interpret risk and return better. You can also more promptly examine how many resources a project may require.

Give your agency a competitive advantage by learning how to do a cost-benefit analysis. In addition, it might help to see a cost-benefit analysis example to help you better understand how to apply it in your workplace.

What is cost-benefit analysis, and what is its relevance in business growth?

On the surface, cost-benefit analysis is relatively straightforward. You examine the potential costs — expenses, fees, ongoing payments, etc. — against benefits like income and subscription revenue to inform your agency’s decisions. You can also use this analysis to help you make hiring decisions, train employees, or enter a new market or geographical region.

Effective business leaders apply this analysis regularly and thoroughly, pulling data to support many decisions. Without using cost-benefit analysis, you can stall your brand’s growth or make risky financial decisions that aren’t likely to pay off.

How to conduct a cost-benefit analysis for business growth

Once you understand more about the cost-benefit principle, you can apply a cost-benefit analysis process throughout your brand. This process requires a few steps, from identifying strategies to comparing costs and benefits.

Identify potential growth strategies

Whether you’re considering tapping into a new market, launching a subscription service, or hiring a specialist to handle your digital marketing efforts, take the time to identify your potential growth strategies. These growth items can be as big or as small as you want, but they should have some tangible impact on your business.

Outline potential costs and benefits associated with the growth initiative

Take a look at how much your new initiative may cost. Does your brand have the resources to support a new application as it latches on? Can you take a hit on the first year of a project running negative? On the other hand, ask yourself what you could stand to gain. A tough first year could lead to a boom in the second. Perhaps a specialist’s higher salary starts paying for itself through increased leads.

Assign a monetary value to these costs & benefits

This step is where it’s time to budget. Assign a value to each cost and benefit on your list, and try to be reasonable and unbiased. You may think a new initiative will immediately take off, but it’s better to err on the side of caution sometimes.

Compare the aggregated costs & benefits

Once you have a value for the items in your analysis, you can compare them to see where your project or initiative lines up.

Make decisions based on the results

You're ready to make some decisions at the end of your cost-benefit analysis. Sometimes, your research shows that a new initiative could be lucrative for your brand if you market it aggressively and handle the increased spending. Other times, the data will suggest a new market won’t be a significant success, and you should scale back expectations. While your cost-benefit report may not be the only factor in your decision-making process, it should be a big one.

Incorporating the opportunity cost in the cost-benefit analysis

The concept of opportunity cost represents the potential benefits a business may miss out on when choosing one alternative outcome over another. By incorporating the opportunity cost in the cost-benefit analysis, companies can have a comprehensive understanding of both the tangible and intangible costs associated with their expansion strategies.

Imagine a scenario of a business having two potential growth paths, expanding to a new geographical market or investing in product development for the existing market. Which path is the most cost-effective for their case?

When estimating the costs associated with the potential geographic expansion, the company should consider not only the direct expenses such as shipping, tariffs, or new offices but also the indirect cost of missing the chance to improve their existing products increasing their client loyalty and consequently their revenue.

To calculate the opportunity cost of your business strategies, you just have to follow the following formula:

Opportunity cost = Cost of alternative outcome - cost of chosen outcome

Read also:
How Service Costing Helps Your Digital Agency Maximize Profits [Plus Example]

Using the appropriate tools to facilitate a cost-benefit analysis

The easiest way to conduct a cost-benefit analysis is to use the right technology. However, agency leaders often need help knowing where to start with so many options available. Ask a handful of professionals what tools they prefer, and you’ll likely get a few common responses, including traditional spreadsheets and BI software.

Microsoft Excel or Google Sheets

You can use your existing CBA template or find one online for either spreadsheet tool. Using Excel or Sheets, you can calculate costs, benefits, and returns over time while factoring in discount rates and possible taxation. It’s highly recommended to collaborate with your finance team on this spreadsheet, making sure that you have added all the critical information needed.

Project Management Software

Using project management software, you can more closely monitor new initiatives and projects while spotting workflow deficiencies. Project management software also helps you to manage team members more effectively.

Time-Tracking Software

Time-tracking software like Elorus allows businesses to measure employees' work time more accurately on different projects. You can use this data to calculate labor costs, which is a critical cost-benefit analysis component, or the time needed to launch a new service that’s similar to your existing offerings. You can assume a roughly comparable amount of resources will be necessary for the new project too.

The time-tracking tool might not be as relevant if your new service is a major departure from your current services, but it can still help you frame your expectations.

Business Intelligence and Analytics Software

Business intelligence tools can help you analyze and interpret cost-benefit reports. Visualization makes it easier to communicate your findings and helps employees understand the data’s implications.

If you use software tools to enhance your analysis, you should remember that they are not a substitute for sound judgment and strategic thinking. Also, you must ensure employees are appropriately trained in those tools. Then, you can integrate the data you collect into your business processes. Without sufficient training on each platform, you’ll risk inaccurate data skewing your cost-benefit analysis.

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Cost-benefit analysis example

Talking about the perks of cost-benefit analysis can be helpful, but it’s easier to understand when you can see them for yourself. The following example shows what it might look like if a digital agency launches a new subscription service.

Keep in mind that this is a simplified cost-benefit analysis example. A software-backed analysis may factor in other real-world situations, like varying discount rates, taxation, fluctuating revenue, etc.

Software development includes the costs of creating the online service. This may consist of hiring developers or paying a software development company for app creation. Ideally, this is a one-time expense, though you may need additional development for new releases, patches, or other content.

Marketing and launch cover the initial marketing spend of the new service to potential customers and the costs associated with the official launch. Since you’re only launching the service once, you only need that first initial bout of launch marketing. Further promotional activities, significant updates, and external partnerships can all impact future marketing spend, though.

Customer service covers the cost of providing support to customers. Most commonly, this will include hiring customer service staff, setting up a digital help desk, and investing in software. This figure will grow as your new service expands and you gain more clients.

Server and maintenance include the costs of hosting an online service and ensuring the servers remain up. There should also be available support for troubleshooting and fixes. Notice that these are ongoing expenses and scale alongside the business. As your audience grows, so will your server needs.

Other operational costs include your general administrative expenses, legal and accounting services costs, and additional miscellaneous fees you might encounter while developing your new service.

The example runs the total costs of each expense against the projected revenue, showing that launching the subscription service could represent a net positive for your agency. However, it also highlights that you’re likely operating the service’s first year at a deficit, meaning you need to be prepared to financially support your subscription service in its early days.

To sum up

Cost-benefit analysis can inform your digital agency about much more than just its bottom line. The information you get from a well-thought-out cost-benefit analysis can help you identify inefficiencies and opportunities for growth. While by using the right resources, you can generate a reliable cost-benefit report that allows you to accurately map out your digital agency’s future.

As the business world becomes increasingly data-driven, understanding your digital agency’s metrics is often a driving factor between success and failure. Your business metrics are a set of KPIs (key performance indicators) that can showcase business health at a glance and provide more granular data to inform significant decisions or help you allocate resources.

Before you can leverage your business metrics to have a more significant impact throughout your digital agency, you must understand which metrics are integral to business growth and how to calculate them, either manually or with helpful software solutions. Here’s what you should know to hit your agency KPIs consistently.

What are the top agency metrics?

Agency Growth Metrics

While your digital agency's specific goals and targets can vary, affecting your agency KPIs, the most common growth-oriented agency metrics are revenue growth, net profit margin, lifetime value, customer acquisition cost, and employee utilization rate.

Revenue Growth

Simply put, revenue growth measures your month-over-month increases in revenue, expressed as a percentage. This business metric gives you a quick snapshot of your growth and is easy to calculate.

Calculation formula:
Revenue Growth = (Current Period Revenue - Prior Period Revenue) / Prior Period Revenue * 100

Net Profit Margin

Your net profit margin helps you quickly measure overall profitability, making it one of the most critical agency metrics you can track. Net profit margin is how much net income or profit your digital agency generates as a percentage of your revenue. A higher net profit margin indicates a more profitable business, as it shows the company is efficient in controlling its costs and generating profit from its sales.

Calculation formula:
Net Profit Margin = (Net Profit / Total Sales) * 100

Lifetime Value (LTV)

If lifetime value sounds self-explanatory, that’s because it is. This quick calculation shows the estimated revenue a customer will generate throughout their business lifespan.

LTV helps businesses understand the long-term value of each customer and make informed decisions on customer acquisition and retention strategies.

Calculation formula:
Lifetime Value = Customer Value * Average Customer Lifespan

Customer Acquisition Cost (CAC)

CAC refers to the money your business must spend to attract a new customer or conversion. By calculating the CAC, companies can determine the efficiency of their customer acquisition efforts and make data-driven decisions on marketing and sales investments.

It is also an essential metric for determining the profitability and sustainability of a business, as it allows companies to ensure that their customer lifetime value (LTV) is greater than the cost of acquiring those customers.

Calculation formula:
Customer Acquisition Cost = Sales & Marketing Expenses / New Customers

LTV to CAC Ratio

In an ideal world, your LTV to CAC should be 3:1, meaning you make three times what you spent acquiring a customer. If your business metrics dip under a 3:1 ratio, it could be a sign of trouble, and you must consider optimizing your marketing & sales strategies or your customer retention efforts.

Conversely, if the ratio is significantly higher than 3:1, you may have opportunities to scale your agency by increasing investment in customer acquisition.

Calculation formula:
LTV to CAC Ratio = LTV / CAC

Employee Utilization Rate

Utilization rates can show how well you deploy labor in your agency and express the amount of time employees spend doing billable tasks versus administrative work. Agencies can calculate their employee utilization rate using time tracking software, calculating their billable hours.

While there isn't a one-size-fits-all benchmark for employee utilization rate, a common target in professional services industries, including digital marketing agencies, is around 75% to 80%. This allows some non-billable time to be spent on administrative tasks, training, and business development.

Calculation formula:
Utilization Rate (%) = (Billable Time / Total Available Work Hours) * 100.

Sales and Marketing Metrics

The next type of agency metrics we’ll discuss involves sales and marketing. It’s essential to constantly monitor the following metrics to keep your sales initiatives and advertising spending in balance.

Cost Per Lead

Sometimes, you’ll pay a predetermined price per lead. Cost per lead is an incredibly valuable business metric for every digital agency.

By constantly monitoring your CPL, you can evaluate the performance of different marketing channels and campaigns of your agency and focus on the most cost-effective lead-generation strategies. A lower CPL indicates a more efficient marketing effort, as it costs less to acquire each new lead.

However, balancing CPL with lead quality is essential, as low-cost leads may not always translate into high-quality customers who convert and generate revenue.

Calculation formula:
Cost Per Lead = Marketing Budget / New Leads Acquired

Lead-to-Customer Rate

Your lead-to-customer rate helps you understand how many prospective customers convert to actual clients or buyers. This can help you focus on whether your lead generation and sales funnels produce results.

There isn't a universal benchmark for lead-to-customer rate, as it varies depending on factors like industry, target audience, and the nature of the product or service.

However, a 2% to 5% conversion rate is often considered average across industries, while a rate above 5% is considered good. It's essential to consider your business's specific circumstances and goals when setting targets for the lead-to-customer rate and continuously work to improve your sales and marketing processes to increase conversion rates.

Calculation formula:
Lead-to-Customer Rate = (New Customers / Leads) * 100

Sales Growth Rate

Like revenue growth, you can calculate this month-over-month or annually to showcase large-scope performance. It helps digital agencies evaluate their performance, understand the effectiveness of their sales strategies, and track their growth over time.

Calculation formula:
Sales Growth Rate = ((Current Period Sales - Prior Period Sales) / Prior Period Sales) * 100

Sales Closing Rate

This ratio compares the number of prospects your sales team contacts to the number of closed clients. This agency metric helps you identify if your sales efforts are working or failing to close deals.

A closing rate of 20% to 30% is often considered average across industries, while a rate above 30% is considered good. This can vary depending on factors like industry, product or service complexity, pricing, competition, and the quality of leads the marketing team adds to the sales funnel.

Calculation formula:
Sales Closing Rate = (Closed Deals / Total Sales Opportunities) * 100

Project Metrics

Every digital agency needs to monitor individual project metrics closely, ensuring each project is sufficiently profitable.

Estimated vs. Actual Project Time

Your estimated hours are how long you think a project will take, while actual time is how long it takes in practice. Accurate estimates are crucial in helping distribute resources. Elorus time tracking makes tracking your project time and determining performance much simpler.

This comparison helps you evaluate your project management processes, resource allocation, and the accuracy of your estimations. A lower percentage difference (closer to 0%) indicates that your estimations are accurate and your project management processes are efficient.

Calculation formula:
Estimated vs. Actual Project Time = Total Time Spent - Time Estimated

Estimated vs. Actual Project Cost

Like project time, estimated versus actual project cost takes your estimates and stacks them against real-life money spent. Using the Elorus expense management tool, you can quickly determine your project costs. This comparison will help you evaluate your budgeting and cost management processes, identify potential inefficiencies, and find areas for improvement.

Calculation formula:
Estimated vs. Actual Project Cost = Money Spent - Money Estimated

Profit per Project

Understanding a project’s profitability can help determine which business efforts are and aren’t worth the time and expenses. Agencies can track each project's revenue, cost, and expenses with Elorus and make informed decisions about future projects and resource allocation.

Calculation formula:
Profit per Project = Project Revenue - Total Project Cost

Business Finance Metrics

There are also several financial business metrics that are vitally important for digital agencies. Tracking your realization rate and break-even point can help you hit your agency KPIs.

Realization Rate

Your realization rate is the percentage of billable work that is actually invoiced and collected from clients. A low realization rate indicates that your revenues are reduced. Conversely, a high realization rate (90% or above) indicates solid performance. Agencies can track the total and billable hours using the Elorus dashboard.

To improve the realization rate, agencies can focus on optimizing their billing processes, enhancing communication with clients about fees and expectations, and ensuring that their pricing strategy is competitive and accurately reflects the value of their services.

Calculation formula:
Realization Rate = (Actual Billable Amount / Potential Billable Revenue) * 100

Break-Even Point

The break-even point is when your total revenue and cost are even. This business metric is vital because it can show you when there’s no loss or gain for your agency. The break-even point helps agencies understand their cost structure, evaluate pricing strategies, and assess the viability of new products or ventures.

Calculation formula:
Break-Even Point = Fixed Costs / (Selling Price of Specific Service - Variable Costs of Specific Service)

Employee Satisfaction Metrics

Any digital agency also needs happy, productive employees to maximize its efficiency. Your employee net promoter score and turnover rates can help you understand whether you have built a healthy team environment or must take immediate action.

Employee Net Promoter Score (eNPS)

eNPS score can help determine employee engagement and satisfaction within your digital agency.

To calculate eNPS, employees are asked to answer the following question on a scale of 0 to 10.  "How likely would you recommend this company as a workplace to a friend or colleague?"

A higher eNPS generally suggests better employee satisfaction and loyalty.

Employee Turnover

Employee turnover is how many employees leave your organization within a given period. Most often, employers use a year when they’re measuring turnover. A high turnover rate could indicate employee dissatisfaction.

To reduce employee turnover, agencies can focus on improving employee engagement, providing competitive compensation, offering opportunities for growth and development, and fostering a positive work environment.

Regularly monitoring employee turnover can help companies identify trends and address potential issues before they escalate, leading to a more stable and satisfied workforce.

Calculation formula:
Employee Turnover = (Terminations / Total Employees) * 100

Customer Support Metrics

Finally, there’s nothing more important for a digital agency than keeping your clients happy and returning for more. Three core agency metrics can help you track this critical factor.

Customer Satisfaction (CSAT) Score

The CSAT score measures a customer’s happiness or satisfaction with your products, services, or both. Typically, you’ll use customer satisfaction surveys to determine this score, which can act as a quick glimpse into the customer journey and showcase your overall client health.

Customers are usually asked to rate their satisfaction with a specific product or service aspect to calculate the CSAT score. For example, customers could be asked: "How satisfied are you with our product/service on a scale of 1 to 5, where one is very dissatisfied, and five is very satisfied?”

To improve CSAT scores, agencies can focus on understanding customer needs and expectations, enhancing product/service quality, providing excellent customer service, and proactively addressing customer concerns.

Client Retention Rate

A client retention rate is the average number of customers remaining with your business after a certain period. This can be month-to-month or year-over-year for most agencies. Constantly tracking the client retention rate can help companies identify trends, address potential issues, and track the success of initiatives to increase client satisfaction and loyalty.

Calculation formula:
Client Retention = ((Clients at End of Period - New Clients) / Clients at Start of Period) * 100

Churn Rate

Your churn rate is also referred to as the rate of attrition and shows the rate at which customers stop doing business with your agency. A high churn rate indicates problems in your brand that need immediate attention.

Calculation formula:
Churn Rate = (Lost Customers / Number of Customers at the Beginning of the Period) * 100

Elorus can help you make the most of your agency metrics

To some, this list of business metrics can easily seem overwhelming. In many senses, that’s true; you have to juggle several factors and agency KPIs to ensure your business is growing sustainably and profitably. Luckily, establishing and hitting agency metrics is easier than ever using analytics or business platforms like Elorus.

With expansive toolkits that include invoicing software, time tracking, project monitoring, and expense management features, Elorus empowers agencies to take greater control of their data. Sign up for free today to the Elorus platform and start tracking the most critical metrics of your agency.

You should use all available data in an agency setting to make the most robust, thoughtful decisions for your brand. Establishing a data-driven culture within your business can help you and your team members make the most of incoming reports and help you pivot depending on what your data says.

In an increasingly connected world, a data-driven approach to business is less of a suggestion and more of a requirement. If you’re not reading into your data, you’re likely not seeing the complete picture of your agency’s performance.

That begs the question: How do you improve decision-making and promote more excellent knowledge in your agency? Can you transform your brand into a data-driven organization?

What is data-informed decision-making?

Data-informed decision-making involves collecting, analyzing, and interpreting data to understand your agency’s current situation and identify potential solutions to any trouble. As a result, a data-driven organization is much more likely to thrive and be able to adapt to shifting circumstances or market changes.

What are the benefits of adopting a data-driven approach?

Deploying data-driven culture throughout your agency can have clear, visible benefits. For example, you can use big-picture data to make more generalized decisions or look into granular reporting to find specific hiccups, bottlenecks, and areas of opportunity.

Faster, more informed decision-making

Leveraging data enables organizations to make decisions more quickly and accurately, allowing them to seize opportunities in an ever-changing marketplace. More precise data leads to better decisions for your digital agency.

Improved operational efficiency

Use data to identify inefficiencies and streamline processes, to reduce costs and increase profitability. For example, using a time-tracking system like Elorus, digital agencies can constantly monitor their work hours and evaluate their performance. They will answer questions like how many hours they spend on specific projects or clients, how many hours they need to complete a task, how many employees are needed to complete a specific task, etc.

Based on that information, agencies can optimize internal processes to become more efficient and productive and do accurate service costing, securing their service profitability.

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Fosters a mindset of continuous improvement and experimentation

This leads to more innovative solutions and the ability to adapt quickly to market changes. Don’t let your agency get stuck in its ways, as this may prevent you from seizing new opportunities that come your way.

Informed risk management

By using data to identify trends and potential risks, agencies can make more informed choices, accurately balancing risks against potential rewards. Few things can undermine an otherwise-successful digital agency, quite like unbalanced risk management — you don’t want to take big risks for small gains.

Offer enhanced customer experiences

Understanding customer data enables organizations to tailor their offerings to meet the needs of their audience better, resulting in higher customer satisfaction and increased loyalty. Properly integrating a data-driven culture in your digital agency will enable you to focus on your best-performing areas of client engagement and customize new experiences your customers will love.

Demonstrate ROI to your clients

Establish clear goals and objectives for each project and develop a system for tracking and reporting on data-driven KPIs. Regularly share insights and success stories with clients to showcase the impact of your services. Too many agencies assume that their work will do the talking for them — make sure your clients understand your value without being arrogant or showy about it.

While this isn’t an exhaustive list of the benefits of a more comprehensive data culture in your agency, it’s a great showcase of how much your existing and incoming data can bolster your brand’s efforts. Using data effectively can help you better communicate with clients, mitigate risks, and continuously improve your offerings and efforts.

How should a company adopt a data-driven culture that will stick?

Implementing new data-forward policies may sound easy in theory, but it’s often tricky for more extensive changes to stick in practice. So, when rethinking your data-driven culture, how do you ensure your efforts are successful? There are several ways to get your agency to adopt a data-rich mindset, including vital goal-setting and collaborative efforts.

Leadership commitment

Fostering employee buy-in can be complicated. Some employees may be stuck in their ways and resistant to becoming a data-driven business. Leadership needs to commit to data-informed decision-making. Leading by example will increase employee engagement.

Set specific, measurable, and achievable goals

Though SMART (specific, measurable, attainable, relevant, timely) business goals aren’t the be-all, end-all of agency goal setting, they are a great way to help your brand adopt a data-driven approach. Be clear and concise with your goal setting. For example, do you want to launch a new service by the end of Q3? Is your goal to decrease your agency’s customer acquisition cost by X percent by the end of the year? Whatever the goal, ensure it’s reasonable and trackable.

Employee training programs and workshops

In many cases, it’s helpful to develop data literacy and analytical skills through programs and workshops. Ongoing education is paramount for agency settings, especially if some of your team members are unfamiliar with working at a tech or internet company. These courses offer more excellent structure to your team members, and in-person training and remote courses are often available.

Encourage collaboration between departments

One of the best ways to promote knowledge sharing is by fostering a collaborative environment. Whether cross-team or inter-department, look for ways to help teams work together, especially on data-rich projects.

Incentivize and reward data-driven behaviors

Be sure to highlight and praise data-driven decision-making and successes. For example, reward those employees who have used specific data in their company presentations or to support their rationale during your team meetings. The more employees see your data strategy as a positive, the more likely they are to engage.

Make data easily accessible to all employees

Invest in user-friendly tools that simplify the process of data analysis and visualization. Establish a centralized data warehouse for your employees where they can dig deeper into your company’s metrics. Creating this knowledge base will improve your employees’ “data vocabulary” and provide them with actionable insights.

Read also:
How to Improve the Operational Efficiency of Your Digital Agency

Incorporate data analysis into all aspects of decision-making

You can leverage your data-driven strategy business-wide with smart applications, touching on anything from strategic planning to day-to-day operations. As your data culture becomes more present within your agency, it’ll also become more familiar.

Promote a culture of curiosity and experimentation

Encourage employees to ask questions, explore new ideas, and test hypotheses using data. Not only does this build core data skills, but it also helps create a forward-thinking atmosphere in your agency.

Establish internal processes to analyze data-driven insights

During these review processes, you can optimize business outcomes by looking at large-scope and granular reports to assess performance. These internal processes should be regular, consistent, and adaptable so you’re maximizing the time you spend with your data.

Elorus can help you become a more data-driven company

Data-informed decision-making is a smart bet for your brand. As collective access to data increases, it’s essential to use all available information effectively. Whether you’re interested in speeding up your agency’s decision-making processes or want to create a culture open to continuous growth and improvement, it’s beneficial to equip yourself with the right tools.

When you’re ready to make the most of your agency’s data, free sign up for Elorus. We offer a feature-rich business software platform to help you leverage your data. The Elorus platform can help you review labor statistics, streamline invoicing and payments, and simplify time tracking with intuitive, user-friendly toolkits.

Leading by example can establish a business culture, set workplace standards, and encourage growth. Some digital agencies struggle when implementing new behaviors and practices, and some business owners require extra coaching and training to thrive. Developing your leadership style is essential to your agency’s success and helps you develop consistent operations.

Why is leading by example important?

The employer/employee relationship is a two-way street in the fast-paced and collaborative environment of a digital agency. Building trust, fostering respect, and generating morale take time but are much more easily achieved when setting a clear example for your team.

When you demonstrate the qualities and behaviors you value in the workplace, you set a precedent for your peers and employees. From C-suite representatives to team leaders, every workplace authority can develop the skills to lead by example.

9 tips to become a better leader within your agency

While leading by example might seem like a nebulous concept, there are actionable steps you can take to become a better business leader. Follow a few critical tips whether you’re focusing on industry trends and best practices or are interested in improving collaboration.

Be a role model for desired behaviors

Showcasing desired behaviors can be vital for your business culture, day-to-day collaboration with your team, and the overall growth potential of your agency. While picking up new habits can be difficult, it can inspire employees and increase buy-in to new policies and procedures.

Showcase your passion and dedication to the agency

When the agency lead is excited about their work, it’s hard for their employees not to feel the same. While it’s impossible to be constantly cheerful, always be professional and energetic, especially in collaborative or team-facing scenarios.

Stay current with industry trends and best practices

Between setting up continuing education courses, training, or consultations for your team, you can promote workplace development in several ways. Even if you can’t attend every conference or training your employees do, you should try to be present as often as possible so you’re not relying on secondhand information and can act as an authority within your industry.

Set clear expectations and goals for your team

Setting clear expectations helps keep the team leaders and employees aligned. Manageable, observable goals help teams understand progress and their impact on those specific goals and the overall agency performance. Adjust your expectations and goals regularly based on available data.

Prioritize team collaboration and skill-sharing

In an agency, collaboration is vital. For example, one account manager might excel with client-facing tasks but requires help with data analysis. Another may be an expert at SEO or advertising but needs help conducting an online survey. Collaboration and skill-sharing help everyone grow, including team leaders. Leading by example and collaborating with your teams on sales opportunities, new clients, and internal touchpoints can greatly help.

Provide regular feedback and opportunities for growth

Leading by example also involves providing clear, solid feedback and encouraging continued growth. Otherwise, you risk employees feeling as though they’re in the dark. Use any of the 360 employee feedback tools available periodically throughout the year, establishing a peer-to-peer feedback culture within your agency. Giving constructive feedback to your team members will help them understand their strengths and weaknesses so that they can constantly improve them.

Celebrate successes and learn from failures

Your failures are equally crucial to your successes, and you should respond to each one accordingly. Failure allows you to understand what went wrong. Success will enable you to drill down on what you did well and lift team members and leaders.

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Promote a culture of accountability and responsibility

Understanding when and how to take responsibility for failures and missteps can show employees that you’re not immune to criticism and can still grow and learn alongside your team. Humility is an essential facet of a successful leadership style.

Be open to new ideas and embrace experimentation

Make your employees feel heard by sourcing new ideas, trying new methods, or testing proposals. This helps employees feel more agency over their work.

How can you overcome the challenges of leading by example within your agency?

Of course, with any new behaviors, policies, or initiatives, there will be challenges. Leading by example doesn’t come naturally for every agency owner, though you can train many core skills. There are a few natural challenges you might experience, from difficulty establishing new routines to employee pushback.

Maintain consistency

If you respond to one of the agency’s clients professionally one day but don’t give the next day’s call the same level of effort, it can set a bad precedent for your employees. Consistency is critical, particularly when encouraging new behaviors or workplace standards. So, how do you remain consistent when you’re learning how to lead people?

If you’re adopting new policies, consistently follow them and help course-correct when you see others struggling to do so. Regularly monitor progress toward goals, adjust strategies as needed, and foster a culture of accountability, encouraging team members to hold themselves and each other to high standards.

Cope with resistance or skepticism

Not everyone adapts well to changes in the workplace. Sometimes, you’ll find that your initiatives face a fair bit of skepticism. Leading by example and setting expectations can be especially difficult in these instances. Focus on communicating the reasoning behind your decisions and detailing the anticipated benefits. Be receptive to feedback and adjust your approach when necessary.

Manage diverse and remote teams

Part of any leadership style deals directly with your capacity to work with diverse and remote teams within a digital agency setting. Managing distributed teams can help expose team leaders and employees to new perspectives, fresh ideas, and exciting opportunities for collaboration.

To set solid examples for your team members, establish regular check-ins and team meetings to maintain engagement and productivity. You should always work to promote a culture of inclusivity, understanding, and respecting individual differences and working styles. In addition, you can also provide team bonding opportunities, such as virtual social events or team-building activities.

Read also:
Setting the Right Standards of Performance in your Digital Agency

Adapt to changing circumstances

Static businesses can quickly become stagnant, especially if agency leaders aren’t willing to adapt to new industry information, market shifts, or changing circumstances. As for how to lead people to navigate change better, encourage innovation and adaptability within your team, fostering a culture of continuous learning and improvement. Communicate changes effectively and involve your team in the decision-making process when appropriate so everyone feels like they are heard.

Most importantly, be proactive in seeking resources, tools, and support systems to help you adapt and thrive in changing circumstances. While it’s impossible to completely future-proof your agency, you can always future-prepare it.

Address client concerns and expectations

As a digital agency owner, you should be as knowledgeable about each client as your team leaders and account managers. However, you also need to address concerns and expectations proactively. To do so, develop a deep understanding of each client's business goals, industry, and target audience.

Foster strong client relationships through regular communication and transparency. Set realistic expectations and communicate the project scope, timeline, and deliverables. Beyond that, you can use time-tracking software to provide more accurate time estimations.

Be proactive in addressing potential issues, providing timely updates, and offering solutions. Finally, solicit client feedback regularly to improve processes and services that can aid you when leading by example.

Elorus gives you the tools to become a better leader

Remember that leadership by example doesn’t mean doing everything on your own. With assistance from the Elorus platform, it’s easier to access rich, actionable data to inform your leadership style and business decisions.

Elorus provides all-inclusive business software that comprises time-tracking tools, project management capabilities, invoicing, and expense management. Using more robust data sets, you can focus on what’s going well for your agency and discover areas of opportunity for growth and development. Sign up for free today to learn more about the Elorus platform and how it can help your agency grow.

All effective agency-client relationships depend on a foundation of trust, mutual respect, and proven results. A long-lasting business relationship can represent a continual income stream for your agency, often making them more valuable than new client acquisitions.

With this in mind, finding ways to connect with your clients on a deeper level and meet them on their terms is essential. Sometimes, this means adjusting a few of your business practices and software platforms to empower your efforts. Whether you’re running a successful marketing agency ready to expand its portfolio or a new agency owner trying to develop solid agency-client relationships, it’s crucial to have a clear idea of why client relations are so important and what you can do to improve them.

Why is your agency-client relationship so important?

Your relationship with your clients is the lifeblood of your business. Strong agency-client relationships can lead to business referrals, ongoing contracts, upsells, and much more. Conversely, a bad relationship with a client can generate negative word-of-mouth, impacting your ability to attract new clients and expand your agency’s reach.

Honoring your business relationships can increase client retention rates, encourage word-of-mouth connections, improve your reputation, and lead to higher revenue and profitability.

15 best practices to build a strong relationship with clients

While each agency’s client relations strategy will differ somewhat, a few best practices can better inform the overall approach to relationship building. Between taking a more holistic approach to client evaluations to following an under-promise, over-deliver model when establishing services, here are some of the most important ways to invest in client relationship management.

1. Understand your client’s business needs.

From individual services to overarching business goals, you should have a solid working knowledge of your client. When learning about a new client or re-evaluating existing partnerships, dig deeper than general business discussions. Find out what’s coming down the pipeline, ask questions about workflows, and discuss KPIs, metrics, and other performance data.

2. Evaluate whether the client is a good fit for your agency.

Even if you’re investing heavily in new client acquisition, it’s important to remember that client relationships are a two-way street. While you may be a good fit for a prospective client's needs, you should also take the time to determine whether the client is a good fit for yours. For example, if you specialize in a specific industry, a client in a different vertical may be outside your expertise.

Read also:
How To Fire A Toxic Client (With Minimum Consequences For Your Agency)

3. Set the right expectations at the beginning of your working relationship.

Expectation management is a significant component of any client relationship. Setting practical expectations can ensure client satisfaction and improve your long-term prospects. Using tools like Elorus can help you gain access to real-time data that can establish expectations and track performance.

4. Create a straightforward implementation process your client will trust.

Preparing for a rollout, product launch, or campaign should be straightforward from the client’s perspective. You should clearly understand what you’re doing, what you hope to accomplish, and how you'll do it. It helps to introduce clients to your processes early. If you can build a reliable implementation method, it can enhance your client relationships.

5. Leverage technology to streamline your processes.

Smart technology investments can represent great leaps forward for client relations, mainly when you use tools like CRM systems and project management software to streamline processes and improve communications between you and your clients. In addition, platforms like Elorus simplify business software, providing actionable, insightful data about your projects that you can use in everyday decisions.

6. Under promise, over deliver.

Many agencies make the mistake of overselling their capacity, resources, or outcomes, which can lead to highly disappointed clients. One of the most significant components of client relationship management is an under-promise, over-deliver mindset. By managing early expectations and finding ways to exceed them, you’re more likely to impress clients and secure long-term partnerships.

7. Implement proactive problem-solving strategies.

One of your most significant responsibilities in the agency-client relationship is to act as a problem solver. However, there’s a substantial difference between reactive and proactive problem-solving.

Reactive problem-solving can indicate uncertainty and show that an agency doesn’t have the firmest grasp of industry conditions. Proactive problem-solving gives clients more significant safeguards and allows agencies room to adjust strategy.

8. Respect your project timelines.

Whether building websites or developing comprehensive marketing plans, one of the most significant ways to tank an agency-client relationship is to not deliver on time. While some clients may respect the occasional delay, especially for a good reason, others will consider canceling service altogether. Develop reasonable, achievable timelines and do your best to stick to them.

By constantly using time-tracking software within your agency, you will know the average time your team needs to complete specific tasks so that you can share accurate time estimates with your clients.

9. Focus on adaptability and flexibility when responding to client needs.

Sometimes, partway through a new campaign, a client will ask to shake things up. Or, perhaps, they’ll connect with a new partner and want to change the scope of work you provide them. When you’re building up your client relations, remain positive and proactive when it comes to their needs. Clients are much more likely to trust you with their brand if you can adapt to shifting circumstances or adjust strategies to meet their needs.

10. Offer personalized experiences based on client needs.

While possible, it’s rare that a client’s exact needs perfectly match your service descriptions. As such, you should avoid taking a one-size-fits-all approach to assess client needs. Their unique requests and business goals may require project-specific tailoring.

By taking the time to understand what your client envisions for their business, you can more capably provide quality services. As a result, individualized service can have a massive impact on client relations.

11. Evaluate performance and back it up with data.

When setting goals with your clients, determine how you will check performance early. Should you schedule weekly check-ins? Stick to quarterly reports? Something in-between? The answer will differ from agency to agency; however, it’s helpful to establish consistent performance reviews. If you have adopted a data-driven culture within your agency, you can use available data to see what is and isn’t working during evaluations.

12. Communicate regularly and thoroughly.

Clients have different communication needs, but every agency-client relationship depends on reliability to succeed. Work with clients to determine their preferred communication styles, channels, and times. For example, some clients may want to chat with you weekly on the phone. Others might wish for less frequent check-ins but more robust reporting.

13. Invest in your client’s education.

In client relations, an educated client is a confident client. While it’s one thing to show your client results and hit metrics, it’s another to ensure the client understands why they’re essential. For instance, a client who doesn’t know much about SEO won’t necessarily understand why specific tasks require more time to be implemented or why they don’t see immediate results. Educate your clients about your work and provide industry expertise when possible. A client that sees you as a thought leader is more likely to invest in a long-term partnership.

14. Hone in on transparency in pricing and billing.

Whether bringing on a new client or increasing fees to adjust for market conditions, you must be clear about your pricing structure and billing practices. Customers don’t want to feel misled or surprised by hidden fees and added expenses that you haven’t thoroughly discussed. Transparent financial practices are foundational to long-term client relationship building.

By invoicing and billing clients using online software like Elorus, you can track and present the tasks you have worked on to your customers and how much time your team has spent on each task in detail. That way, you can avoid misunderstandings and foster trust between your agency and its clients.

15. Seek client feedback to improve services continually.

The best way to determine what’s working in your client relations strategy is to go straight to the source. Ask clients for feedback, not only about your products and services, but about your communications, reporting, and responsiveness. Your clients' responses can give you immense insight into areas of opportunity for your agency.

Platforms like Elorus make it easier to develop impactful agency-client relationships.

When working on your agency-client relationship, the more informed you are, the better. You're more likely to build client trust and industry authority if you go into every meeting, check-in, or touchpoint prepared and armed with actionable data.

Between time-tracking, project monitoring, and invoicing solutions, Elorus offers a feature-rich business suite that can empower your client relations and give you insight into your brand's performance. Sign up for free to learn more about Elorus and explore our comprehensive platform.

Unless you’re a business accountant or in another financial sector, chances are you didn’t start your small business to spend all your time working with finances. Plus, many small business owners lack the time, energy, and resources to manually address their brand’s financial needs. As a result, small businesses may miss crucial insights from their financial data, leading to bottlenecks or underperformance.

With consistent reporting and tools like the Elorus platform, you can reshape how you approach expenses, data, and cost-saving opportunities. First, however, you must understand the essentials of expense reporting, tracking, and management.

What is expense reporting?

An expense report is a detailed and itemized list of your business costs. These reports can help you quickly and accurately spot where your organization spends money, view outstanding payments, and adjust for inconsistencies.

The Core Types of Expense Report

Expense reports typically cover a few areas, including personal expenses, travel costs, project fees, administrative spending, departmental needs, etc. Some areas (such as travel costs and project fees) can vary considerably from project to project, while others are more consistent across the board.

The Importance of Tracking Expenses for Small Businesses

We have identified four core areas where digital agencies can benefit from expense reporting for small business owners.

Better Business Monitoring
With expense management tools, you can quickly review your business's performance and see what areas need additional attention.

Financial Planning
Set annual and quarterly goals, forecast growth opportunities, and review progress with dedicated business expense management tools.

Identify Cost Savings
See where you may be overspending and identify ways to reduce overall costs and grow your bottom line.

Tax Purposes
Use thorough, comprehensive, and compliant expense reporting that simplifies tax time.

When you use reporting tools, software platforms, and other management solutions, it’s much easier for your small business to make data-driven decisions that can spur growth and help you expand. Tracking your expenses can also help you expedite reimbursement for any incurred costs.

Beyond this, by not focusing your energy on expense tracking, you could put your small business at a disadvantage. When smaller brands neglect their financial data, they’ll likely overextend themselves, leading to mission-critical performance issues that can affect a company’s health and livelihood.

What are the best practices for managing expense reports in a small business?

Equip your small business with the tools for success. You can strengthen your internal practices and set better precedents by following a few best practices for managing your expense reports throughout your business.

Establish a clear expense management policy in the company

Having a clear, concise, and agreed-upon expense management policy in place from the get-go helps ensure employee buy-in and gives you more data to work with moving forward.

• Types of allowable expenses: Your policy should denote what expenses are eligible for reimbursement and which ones fall under personal claims or costs. For instance, travel expenses and a per-diem may be included while additional spending, leisure, and other costs aren’t.
• Processes for submitting expense reports: Develop a straightforward method for creating, formatting, and submitting expense reports. Reporting and financial management software can help you modify a template or build on a successful example.

Use automated expense management software for streamlined workflows

Automation may seem reserved for big businesses and global brands, but SMBs can take advantage too. For example, many expense management software, like Elorus, come with automated tools that remove the guesswork and human error from your financial adjustments.

• Process automation: Process automation can automatically invoice for specific projects, send bills on scheduled days, and gather pertinent data into easy-to-use reports.
  
• Human Error Reduction: By avoiding manual data entry, you’re much less likely to face costly errors such as incorrect invoices, overbilling, or incomplete spending reports. While you should still review your data and check for accuracy during regular audits, automation helps eliminate much of the potential for human error.
  
• Bird’s-Eye Business View: Using online expense management software empowers you as an SMB owner to take a step back from the granular data and look at your business from a bird’s-eye view. Zoom in or out as you need to review big-picture data points, small performance hurdles, and everything in between.

Train employees on the expense reporting process

Ensure your employees feel confident with your existing expense management and reporting processes. Whether developing in-house policies or relying on expense management software, thorough training can help avoid costly mistakes and promote reporting uniformity.

• Collecting/Organizing Receipts: Denote what receipts you require from employees and how you’ll categorize them within your system.
  
• Submitting Expenses: Set up a precise workflow for submitting reports. Give employees the tools to submit their own expenses or simplify the review process so there’s less confusion when it’s time to invoice or process expenses.
  
• Expense Policy Compliance: Regularly review receipts and reports to ensure greater policy compliance across the board. Enforcing your policy helps provide more complete, rounded data that you can apply to your small business.

Elorus can help small businesses manage their expenses

From startups to emerging small businesses, Elorus has all the tools you need to build a more substantial financial management plan. Develop greater accountability throughout your business, use data to empower your decisions, and manage your recurring costs in a few simple steps with Elorus software’s key benefits.

Categorize your expenses.
Once you register with Elorus, you gain access to a wide assortment of expense categories that you can use to gain more precise insights into your SMB’s financial performance. We also offer use cases for custom expense categories, should you need to finesse your toolkit.

Develop billable project expenses.
You can associate your existing expenses with specific projects. Doing so gives you a better look at a given project’s financials and overall performance. You can bill your client with the project expense automatically the next time you invoice them.

Address automatic recurring costs.
Elorus expense management software can help you save time and improve accuracy if you have regularly recurring payments. Develop payment intervals, set a schedule, and easily track categories over time.

Manage your bills and payments.
Using our enhanced reporting capabilities gives you a financial advantage. With Elorus, you can manage your existing bills, schedule payments, and review more granular data showing your performance.

Sign up for free today to learn more about the Elorus platform and get started. We’re here to uncover all the business insights hidden in your finances and help you streamline expense reporting for your small business.

For startups, global brands, and every digital agency in between, effective service costing can often mean the difference between success and failure. Well-priced services help ensure you attract qualified clients without alienating potential partners.

With that in mind, how do you price services? How should you calculate overhead costs? And how do digital platforms like Elorus make service costing that much more intuitive?

What is service costing?

Service costing determines the expenses, labor, and resources of providing agency services to your clients. By incorporating service costing in your workflow, you can better understand your actual costs and allocate brand resources as needed. Typically, pricing your services includes direct and indirect expenses.

The direct expenses of providing services include the cost of labor, materials, and equipment used to deliver the services. Indirect costs, on the other hand, include the cost of support functions such as administration, marketing, and overhead expenses like rent, utilities, and insurance.

What are the factors that determine service costing?

While the specific elements can vary based on your niche, business model, and more, these are the most important general elements to keep in mind when determining your cost of services.

Time, effort, and seniority of each employee

If you’ve taken on a new account that’s small enough for a junior employee to manage, that will likely cost less than one closely monitored by senior team members. Similarly, different service tiers require adjusted effort levels, meaning you’ll need to price them accurately for the amount of work involved.

Overhead costs

As you price your digital agency services, you must calculate overhead costs to determine your break-even point.

In general, these costs are relatively consistent from project to project. These include facility costs (offices, equipment, insurance, etc.), licenses, phone and internet, equipment maintenance, and more. Some companies choose to purchase software to calculate and track these costs, while others keep basic spreadsheets detailing overhead costs.

Because overhead costs are typically not project-specific, you must balance these expenses with your direct project expenses. Your overall cost of services should factor in these overhead expenses as well, so you clearly understand how much to charge to turn a profit.

Profit margins

How much profit do you intend to generate from a given service? This number often depends on your portfolio, reputation, and proven results. As a general rule of thumb, a digital agency should aim for a net profit margin of at least 20-25%.

Although at first glance it seems high, this percentage is quite normal if you consider the financial risks that the agency has to take to ensure its long-term success and sustainability. Some of the risk-taking factors that agencies have to consider are related to their cash flow (clients are slow to pay), their revenue recognition (delayed or canceled projects), and the costs associated with delivering services.

To calculate your profit margins, determine your per-hour expenses for staff members and overhead costs. Then, you can add service-specific costs and pricing details for your clients to estimate your profit margin for each project.

Value to the client

If one of your services offers a significant ROI to the client, you’ll want to price it accordingly.

Consider how much value your service provides and understand that it won’t always align with how much it costs you to deliver it.

Best practices for accurate service costing

Determining the most important elements of your digital agency’s pricing model is an important step, but figuring out how to integrate these factors into your final price point is also vital.

Define the scope of work and deliverables

Too often, a poorly defined scope of work can impact a project’s success. Without clear targets and measurable deliverables, pricing services accurately becomes more difficult.

When planning a project’s scope, it’s always best to complete this step early in the process to identify any pain points or problem areas.

It’s also advisable to break down the scope of work into smaller pieces that enable you to track your progress better — and also to communicate your progress clearly with the client along the way. Try to be as specific as possible without leaving anything open to interpretation.

Set clear expectations with your clients

Whether you work in content, graphic design, or digital marketing, you must develop a firm understanding of expectations with each client.

For example, do you offer a free round of revisions on deliverables? Do you charge separate consulting rates for new clients or upcoming projects? When pricing your services, you need to communicate what is included in those costs.

Use the right tools to price your services based on reliable data

Making data-driven decisions can propel your business forward. Time-tracking and project management tools are the easiest ways to access this data.

With time-tracking tools, you can easily track the work time of each employee. This enables you to bill your clients more accurately and precisely monitor your team’s productivity and efficiency. The resulting data can help provide insights for cost optimization that take all of the guesswork out of the process.

Project management tools promote streamlined communication between the digital agency and the client, paving the way for improved collaboration. These same tools can help your agency follow best practices for managing projects and timelines with greater consistency and accuracy.

Using comprehensive tools like Elorus can help you track your team’s progress, streamline your expenses, and examine a broad selection of financial metrics.

Case Study:
How a well-established law firm has increased its productivity and income using the Elorus time tracking

Review and adjust your service costs accordingly

As times change, so too should your service prices. Whether you’re expanding the scope of your work, specializing more closely in a given service, or restructuring your labor allocation, you may need to change pricing. This is equally true for brands that closely follow market conditions and must monitor service costs to remain competitive.

Service costing example for project-driven teams

While this example focuses specifically on digital marketing agencies, most project-driven teams have a similar cost structure in delivering their services.

In the following example, you’ll see a possible scenario of a digital marketing agency that aims to deliver a corporate website to a new client. You’ll also see the specific costs accrued during project implementation.

Direct costs:

Salaries of employees working on the specific project: $12,000
Software licenses (social media, graphic design, web development): $1,500
Outsourced services (photo shooting and copywriting): $3,500

Indirect costs:

Office rent and utilities: $2,500
Office supplies and equipment: $1,200
Salaries of the customer success staff: $3,500

Marketing and sales costs:

Advertising to promote the agency: $2,500
Website development: $1,500
Attendance at a trade show: $4,000

Professional development costs:

Training for employees: $3,000

Overhead costs:

Insurance: $1,000
Legal fees: $1,500

Technology costs:

Computer hardware and software: $4,500
Website hosting: $500

Total service cost:

$42,700

If a company wants to achieve a 25% profit margin, it might add a markup of $10,675 to arrive at a final price of $53,375. Using more accurate service costing models makes it easier for you to maintain profit margins. You also get a closer look at financial metrics, milestones, and goals.

If you’re ready to price your digital agency services and remove the guesswork from service costing, Elorus is here to help.

How Elorus can help digital agencies accurately cost their services

Elorus offers all-inclusive business software for teams in various businesses, from digital agencies and marketing groups to law firms and other project-driven teams. The Elorus platform streamlines service costing through several beneficial tools, including time-tracking capabilities, an invoicing suite, and thorough reporting utilities.

• An easy-to-use time-tracking feature: You can track employee times and review data to make more accurate staffing decisions with a few quick clicks. Labor is one of your most significant expenses, so you should consider project time tracking when service costing.
• More straightforward ways to monitor your whole team’s tracked hours: Agencies can analyze their work hours per client or task and easily monitor billable hours. Elorus can tell you which client required more work hours than expected and how much money the company has earned per client.
• The ability to set different hourly rates per employee: Setting different hourly rates gives you more specific insight into project costs and labor expenses involved in specific services.
• Robust tools to invoice clients per project or task: Create one larger invoice for an entire project or invoice-specific project components as you go.
• Intuitive ways to invoice agency expenses on behalf of the client: Common billable expenses include communication costs (think consultation fees and mentoring), travel, materials, reporting, and research hours.

Sign up for free to learn more about Elorus and how our platform can help you price your digital agency services to achieve maximum profitability.

When starting a small business, it’s easy to find yourself swept up in all the excitement of a first sale or a new customer. After all, your first thoughts probably go to growing your business, building an audience, or developing new products and services that can pad your bottom line. In other words, your small business financial plan may not be at the top of your mind.

However, while these are all integral components of a successful business, small business owners must also wrap their heads around their finances. Financial planning for small business owners may seem complicated, but with a few key insights and helpful software tools, it doesn’t have to be.

The basics of financial planning

What is financial planning in business, and how can you leverage it to boost your bottom line? A financial plan maps your current finances and how you want them to grow. It typically includes information about your company’s income, expenses, balance sheets, investments, insurance, etc.

The more prepared you are for your business future, the more successful you will be. Careful financial planning can reduce surprises and help you pursue actionable financial goals. Though these can vary from business to business, six critical elements of any successful small business financial plan exist.

Set data-driven goals

From expense management tools to time tracking and reporting, you can leverage your existing data to set realistic, achievable goals for your business’s financial health. For example, sales data can help service- or project-driven companies determine how to allocate resources while developing timelines and project estimates.

Time tracking can help you allocate your workforce and develop growth plans for your staff and brand. When setting goals for your business finances, ensure you have the appropriate data to back them up.

Allocate your budget based on specific needs

Too often, small business owners develop their budgets based on feelings and intuition instead of specific, realized needs. Unfortunately, this can mean short-changing particular budgets while inflating others, making it difficult to balance your small business financial plan.

Some of the most significant expenses for many businesses are staffing, taxes, and materials. You should use your existing knowledge and incoming information to allocate these portions of your operating budget more accurately. Then, with more robust budgeting in mind, you’re well on your way to achieving your business finance goals.

Reduce unnecessary costs

One of the most critical components of financial planning for small business owners is cutting unnecessary spending. Which services are your most profitable? Which types of projects are dragging down your bottom line? Through careful financial planning, businesses can streamline their processes and eliminate aspects that aren’t pulling their weight.

You can use time-tracking software to see where you’re overspending on labor and adjust your schedules accordingly. You can also review comprehensive expense management tools and detailed reporting to get more precise insights into where you’re spending too much and where you could save money. Reducing unnecessary costs can help you develop a financial safety net if something goes wrong within your operations.

Understand your projections for the future

Specific projects and careful future planning can help you navigate even the roughest bumps in your small business journey. When planning for your brand’s future, you must consider common budgetary hurdles like growth, expansion into new markets, fresh product releases, and increased staffing needs.

At its simplest, your small business financial plan can include some of your data-driven goals alongside a future timeline by which you aim to hit specific milestones. You can also get more detailed and complex with future projections, including expansion goals, funding opportunities, and market launch plans.

Even if you’re not developing a more aggressive growth plan, you should know what your business could look like in six months, a year, and two years. By setting realistic, firm projections for your brand’s future, you can develop a more robust small business financial plan to help you remain agile as you continue growing.

Develop a recovery plan

Every business goes through the occasional hardships, whether it’s a product launch that didn’t take off or a slow sales period. It’s how these businesses bounce back that matters. In these cases, financial planning for business owners must include an effective recovery plan that details how you’ll power through a slump or retool a lackluster product.

One significant component of any recovery plan includes your approach to risk management. While it’s unlikely that you can develop a business finance plan that addresses every potential risk you may face while running your brand, you can identify some of the largest ones and implement safeguards that will help keep you operating. These tasks include understanding how to navigate loss and theft. You may also want to consider a few cash flow contingencies in case of revenue drops, weaker launches, or other financial shortcomings.

Constantly monitor your time utilization with the right tools

Time-tracking software is one of the easiest ways to see where you are and aren’t meeting your financial benchmarks within your business. Are you overstaffing slow periods and spending far too much on labor costs? Are you understaffing your busiest days, negatively impacting customer satisfaction, and missing out on sales opportunities? While we often think of labor scheduling as a way to overspend, it’s always possible to sell yourself and your employees short.

That’s where well-implemented time-tracking software and business analysis tools can play into financial planning for small businesses. With time-tracking tools, you can more accurately see where you’re spending on labor and compare that to economic data to ensure that money is well-spent. By doing this, you can more thoroughly staff key shifts and reduce coverage on days where it might not be as beneficial to have multiple staff members coordinating operations.

Work with Elorus to make small business financial planning more intuitive.

Ready to take control of your small business financial planning? Elorus is here to help. Elorus provides all-inclusive business software that encompasses time tracking, reporting, and expense management so you can more clearly spot opportunities and risks within your existing business finances.

In a few quick steps, you can use the Elorus platform to price your services more accurately, develop clear time-tracking metrics, and review business reports that give you more granular insight into your overall performance and financial health. The best part is that you can do this all in one place without paying for piecemeal software tools or disconnected platforms.

If you’re looking to save time and money within your small business without sacrificing data, insights, or performance cues, Elorus has you covered. Sign up for free today to learn more about the Elorus platform and get started. We’ll be happy to guide you through our software and help you understand how we can help streamline financial planning for a small business.

Between preparing to establish a new department within your business or opening a new franchise location, scalability can mean many different things to entrepreneurs. Business scalability determines how well your brand is prepared to grow, expand, or adapt to emerging market conditions.

However, there are several ways to apply scalable concepts within a business, and there may not be a one-size-fits-all method for how to scale a business. By leveraging software and investing in appropriate technology, you can streamline your existing workflows, develop more effective processes, and automate critical tasks to ensure your business thrives.

What Is Business Scalability?

When you think of business scalability, you likely think about growing your company. After all, one of the functional tenets of scaling your business is preparing it to meet rising or shifting demands. Ultimately, scalability refers to your business continuing to perform as it expands, adjusts, or adapts.

Many C-level professionals consider scalability crucial as it can spur growth, save money, and help develop more consistent brand messaging. In addition, business scalability is vital because it enables you to keep your company attuned to shifting consumer interests and needs while remaining aware of resource availability, shipping conditions, and inflation rates.

In many ways, technology and scalability are inextricable. Technology has made it easier for businesses to scale and tap into previously unthought-of markets. Beyond that, companies that scale well often do so because they invest in the right technologies, tools, and applications.

Read also:
5 Key Areas Every Small Business Should Automate & Boost Efficiency

Why Leveraging Technology Will Help You Scale Your Business

Suppose you're wondering how to scale a business with the help of technology. In that case, you're on the right track, as investing in new business technology is a massive step for many entrepreneurs. Any new technology integrations have a degree of risk and reward — for instance, introducing complex software for a business that doesn't need it can be counterproductive. Fortunately, scalable technology solutions commonly save your business time, money, and resources.

For starters, technology can automate many business processes, reducing the time and effort required to complete tasks. This can help you increase efficiency and productivity, allowing you to handle more work in less time or eliminate redundant tasks from your continued workload.

Many business owners use technology to enhance the customer experience by providing faster and more personalized service. For example, you can use chatbots to offer 24/7 support or use data analytics to understand customer preferences and behavior.

Technology is critical to business scalability because it can help your team collaborate more effectively, regardless of location. Tools like video conferencing, project management software, and cloud-based file sharing can make collaborating easier for your team. These tools also facilitate greater information and report sharing. You can update global coworkers on new developments with a few quick clicks or keystrokes.

Today's markets also have an always-on component, meaning that many industries need to leverage technology to cater to global audiences more effectively. For agencies looking to expand their reach, leveraging technology can help streamline project management processes, even when employees aren't present or on the clock. This can help you grow your customer base and increase revenue.

When considering scaling a business, remember that technology can also help you collect and analyze data about your business and customers. This can help you identify trends, track performance, and make data-driven decisions that can help scale your business more effectively.

Top Technologies to Use and Scale Your Business

Now that you've got a firmer understanding of the synergy between technology and business scalability, knowing which tools and applications can help you hit your goals is essential. From time-tracking software to customized CRM configurations, a few technologies benefit entrepreneurs implementing protocols for brand scalability.

Time-Tracking Tools

Time-tracking software is one of the most popular business development tools available. It makes it easier for employees to log hours, grants access to labor reports, and smooths the invoicing process considerably. When you incorporate time-tracking software with accounting integrations, you can make your brand's growth much simpler.

Time-tracking tools can help you improve employee accountability, bill more accurately, and improve your project and process schedules so you can give firmer estimates. Elorus offers comprehensive time-tracking capabilities that make it a breeze to share timesheets with clients, review extensive project reporting, and enable real-time team monitoring so you can get the most from your tech.

Project Management Tools

Project management tools can give you quick, zoomed-out glimpses of project status alongside more granular dives into your existing project data. By eliminating a number of the manual processes involved in project management, it's much easier for business owners to see where their initiatives are in relation to where they need to be. When discussing scaling a business, remember project management's critical role in the process.

CRM Tools

Business scalability is one of the most significant factors to impact your selection of CRM tools. After all, you don't want to start building a customer database that won't be able to expand to meet rising consumer demands or ongoing business needs. CRM tools that scale well make it easier to build a diverse network of prospective and existing clients and track their process through your established conversion funnels.

Employee Onboarding Tools

A significant component of scaling your business focuses on human resources, hiring, and other staffing needs. Finding suitable candidates for open positions takes time, energy, and money. Training can make things even more complicated, depending on your business's size and available resources. With dedicated onboarding tools and technology, it's that much easier for you to get new hires up to speed.

Billing Tools

Many brands lose time and resources to outdated or otherwise inefficient invoicing processes. Elorus offers practical billing functionality that makes getting paid faster and easier for all parties. In a few short steps, you can integrate with chosen payment providers, share invoices, and get paid, all to scale. As your demands grow, so too can your invoicing capabilities.

Team Communication Tools

With remote work more popular than ever, it makes sense for many businesses to use distributed workforces. Implementing team communication tools can help keep employees connected while scaling your business. Whether these are simple chat tools or introducing file-sharing systems or software applications, you want to ensure that your tools foster and enhance communication.

Read also:
Small Business Profitability: How to Measure and Constantly Improve it

Elorus Can Help You Enhance Your Brand's Scalability

For aspiring entrepreneurs, agency managers, and business owners, it's always beneficial to plan for future business scalability. However, even if your immediate plans include something other than growth, it's helpful to equip your company with the tools and technology it needs to thrive. That's where Elorus can help.

With a robust suite of tech tools, including invoicing, billing, time tracking, and business reporting, we're here to equip you with the keys to success. To learn more about our platform and how scalability can impact your business, register for free today.

With relatively low startup expenses and lean operating costs, it's no wonder that aspiring entrepreneurs often seek to develop full-service digital agencies. However, whether you focus on marketing, advertising, media buying, or software development, you want to ensure that your in-house processes run smoothly and effectively. Otherwise, you could face unnecessary bottlenecks that can hamper your day-to-day operations.

As a result, improving operational efficiency is a must for any digital agency. By streamlining and automating some aspects of your business services, there are several ways you can improve your overall efficiency. Elorus is here to help you learn more about operational efficiency and how to apply it more capably throughout your digital agency.

What is operational efficiency?

Operational efficiency refers to how well a company can maximize its inputs to achieve its desired outputs. It measures how effectively an organization utilizes resources, such as labor, technology, and materials, to produce the desired outcomes. Companies strive to become operationally efficient to reduce costs, increase profits, and gain a competitive edge.

You can often break operational efficiency into two components: process efficiency and resource efficiency. Process efficiency measures a company's ability to complete a task or process with available resources. You can think of it as the amount of time, effort, and resources expended to achieve the desired output.

On the other hand, resource efficiency measures the effectiveness of a company's use of resources to reach its goals. For digital agencies, this component includes the efficiency of a company's labor force, technology, materials, and other resources.

When a digital agency is operationally efficient, it can maximize its resource allocation and structure to generate the highest outputs possible. This tactic can help improve an agency's bottom line by reducing costs, increasing productivity, and improving customer satisfaction. Companies can achieve operational efficiency in various ways, including streamlining processes, automating tasks, and adopting better management practices.

The Key Areas to Improve Efficiency in Your Digital Agency

As you start incorporating efficiency gains, software platforms, and new policies within your digital agency, you'll want to take stock of key areas and departments that would most benefit from an operational overhaul. In particular, many businesses focus on aspects like customer support, onboarding efforts, and finances.

Customer Support

From time spent conducting outreach to incoming call routing and data entry, small tasks can chip away at overall efficiency and lead to inconsistency or missed metrics. Focus on providing a more robust, streamlined customer support protocol to improve operational efficiency.

Employee Onboarding & Hiring

If you work closely with your HR department, you know how difficult it can be to find the right people for your digital agency. From crowded talent pools to lengthy interview processes, employee onboarding and hiring can dramatically bog down overall efficiency. Restructuring your hiring and onboarding can make for happier employees and more productive workspaces.

Client Onboarding

How quickly do you get new clients up to speed? What does your overall onboarding process look like? Trim and adjust your onboarding process to speed up client intake and generate a more favorable operational efficiency ratio.

Financial Operations

Accounting, bookkeeping, time-tracking, and invoicing can take far more time than most business owners realize. This is especially true for digital agencies, which may work with dozens of clients at any time.

While this isn't an exhaustive list of high-performance areas within your agency, it should provide a great start that will give you a clearer insight into your brand performance and help you improve operational efficiency.

8 Ways to Improve Operational Efficiency

Adopting the right strategies to improve business operations can save time, effort, and costly trial-and-error experimentation. There are several ways that you can go about improving your digital agency's operational efficiency, including:

Encourage Documentation and Time-Tracking

Time-tracking and documentation must be quick to process and as error-free as possible. Incorporating digital time-tracking and business software from Elorus can lead to more accurate metrics, a more significant body of measurable data, and enhanced staff utilization that meets agency needs more readily.

Track Appropriate Metrics

You may be doing your brand a disservice if you're not tracking actionable, quantifiable data that leans into your agency's outcomes. For modern agencies, data is king, and you need to develop consistent, relevant performance benchmarks to help you track KPIs. It's just as important to keep this data accessible so you can compare your current production with any point in your company's history and appropriately plan for its future.

Read also:
20 Top Agency Metrics to Monitor for Data-Driven Decision Making

Focus On Order Completion

Order management and completion are necessary but often time-consuming tasks that can eat away valuable resources. Properly structuring your order completion workflows can boost your brand and increase the realized revenue of your digital agency.

For example, your team should use a customer success tool to properly track your clients' project status and identify possible bottlenecks before they arise. This will result in faster order completion and more satisfied customers.

Rethink Customer Service

Customer service and support functions hide many bottlenecks, from redundant data entry tasks to call routing and dialing efforts that can eat up time. Even setting up an introductory phone tree that connects callers with those who can help them can significantly increase your support department's efficiency.

Introduce Automation

A company may streamline its processes by eliminating unnecessary steps and simplifying the remaining ones. Automation can reduce manual labor costs and improve operations by automating tasks that would otherwise require manual intervention. This can be as simple as using automated email marketing software for retargeting previous clients you last heard from a while ago.

Encourage Greater Collaboration

Better inter-departmental collaboration practices can improve operational efficiency by ensuring that teams work together and create standardized and consistent processes. Collaboration can also ensure that resources are allocated and utilized in the most effective way possible. Be clear, transparent, and thorough with new strategies and policy changes for the most significant employee buy-in.

Leverage Pareto to Increase Productivity

The Pareto Principle — the concept that 20% of causes result in 80% of consequences — can be used to optimize productivity and resource allocation. For example, a company with limited resources can use the Pareto Principle to identify the activities that will produce the most valuable results, reaching its core KPIs.

Use Effective Software Platforms

Dedicated business software can make all the difference in invoicing, time-tracking, and project monitoring. Platforms like Elorus empower users to make the most of their business data and incorporate more thoughtful decision-making throughout their agencies.

Case Study:
How a well-established law firm has increased its productivity and income using the Elorus time tracking

Elorus can help you achieve peak operational efficiency

By becoming more operationally efficient, digital agencies can improve their bottom line and gain a competitive edge. It's important to remember, however, that operational efficiency is not a one-time fix; it's an ongoing process that requires constant evaluation and improvement.

Companies must continually measure and analyze their operations to identify areas of inefficiency and make changes where necessary. With the right strategies, companies can become operationally efficient and enjoy long-term success.

While that all sounds simple in theory, improving operational efficiency is often much more complex than entrepreneurs assume. That's where Elorus can help. We offer all-inclusive business software that tackles common efficiency bottlenecks digital agencies face, including invoicing, expense management, and time-tracking.

So, whether you're looking for a more innovative way to bill clients and track finances or want to use software to help inform performance decisions, Elorus has tools to match your needs.

With many unique factors at play, project cost estimation is an acquired skill. For many businesses, understanding the scope and constraints of a project may be easier said than done. After all, these estimations can include cost forecasting, scheduling, planning, and general monitoring needs.

Unfortunately, that skill is one that not every entrepreneur or growing business can quickly master. Project cost estimation can often delay, derail, or even cancel a burgeoning project, leading to lost time and resources.

Developing a cost estimate for project planning doesn't have to be as complicated as it often sounds. Elorus offers beneficial tools to help business owners in all markets more accurately list tasks, track hours spent, monitor timetables, and track business expenses. So, if you're looking to take greater control of your cost estimation, here are a few things you should keep in mind.

What is project cost estimation?

In many ways, project cost estimation directly correlates to your business's scope of work on any project. For example, examining the scope of work required for an upcoming product launch, an internal restructuring, or a new development makes it easier for entrepreneurs to more accurately budget and predict the overall cost of their projects.

There are a few categories every cost estimation should feature.

You'll include information based on your brand's specific needs when developing your project cost estimations. Many business owners across various industries find it helpful to focus on a few common threads, including labor costs and licenses.

• Labor Costs: The cost of labor can vary greatly depending on the location and skill of the workers. To calculate the labor cost, divide the hourly wage by the number of hours in a workweek. Then, multiply this figure by the number of weeks in the project. This will give you the rough cost of labor for the project. If the cost of living in the area is high, consider adding a surcharge to the cost of labor. This will help to cover the higher cost of living.
• Equipment and Materials: Between office equipment, production machinery, and general supplies, several regular expenses fall under equipment and materials. You should also factor in ongoing maintenance costs that will come into play for the project's duration, as these can drive up total budgeting requirements.
• Facilities: Facilities expenses can include monthly leases, rent, or mortgages, depending on your company's physical presence. Digital companies often have lower facilities costs.
• Licenses: Depending on your industry, you'll need to maintain proper licenses or certifications to ensure that you comply with regulatory bodies and local lawmakers. You can often contact your local Chamber of Commerce or other business authority to find out more about regulatory compliance and required administrative fees for licenses.
• Traveling: If your business requires an in-person presence for components of your project, this can drive up overall expenses. Ensure that you include these estimates in your comprehensive project cost estimation.
• Indirect Expenses: These costs include anything that doesn't fall under the scope of the other categories, such as management and administrative expenses, security, insurance, and more.

As you become more confident developing a cost estimate for a project, you'll likely find other specific categories you'd like to include in your forecasts alongside these standards. Again, the more experienced you are, the easier it'll be for you to create meaningful estimates that help drive business performance.

What are common cost estimation factors that could impact your project?

While every project has its quirks and complexities, there are a few common factors you should look out for to help ensure they don't influence your project's success.

For starters, a lack of experience with similar projects can make you that much more likely to go under or over your planned budget. The more familiar you are with a given project type, the more accurately you can forecast costs.

Second, many business owners begin projects assuming that everything will proceed smoothly. Several even need to pad their budgets or include flex spending potential along the way. But, then, the budget can fall apart at the first sign of a hiccup or issue.

Lastly, a project scope that lacks appropriate specificity can severely hamper your plans. When developing your project scope to get the cost estimate, be as detailed as possible. Remember that the categories we outlined earlier are a starting point and that your specific projects will likely include further information. By doing so, you're more likely to account for rare scenarios and identify opportunities for cost savings.

Follow five steps to estimate your project costs accurately.

In many scenarios, you can follow existing guidelines to ensure you get the most accurate forecast possible for your project. The following steps should get you off to a good start, regardless of the job's specifics.

1. Make a list of all tasks needed until project completion. Be thorough during this step, as some functions that seem inconsequential can add up in price.
2. Delegate tasks to the right people on your team. Proper delegation can save you both time and money.
3. Estimate the project's length based on your experience. Use time logs, timesheets, and previous project data to determine how long you think this new endeavor will last.
4. Add extra money to your budget for emergencies and unexpected expenses. Adding some padding to your budget can more capably protect your cash flow.
5. Use a project monitoring tool like Elorus. Automating some of your project monitoring can reduce human errors and provide more accurate, streamlined data.

With these tips in mind, you're much more likely to develop project cost estimation that protects your business and your bottom line.

Practical project cost estimation is a net gain for your business.

Though project cost estimation can initially seem like another time-consuming step in your business processes, it will benefit your efforts across the board. Whether you're gearing up for a new initiative, releasing an exciting product to market, or breaking ground on a development, you should invest time and energy in the cost estimation process.

If you're looking for tools that can help you with time tracking, project monitoring, and invoicing, Elorus is here to help. We offer feature-rich business software that empowers entrepreneurs and provides them with the necessary intelligence to make impactful decisions. Reach out to Elorus today to learn more about our software suite and how it can help your business.