KPIs Every Agency Owner Should Track Weekly
You're busy. You have projects to manage, clients to talk to, and team to lead. The last thing you want to do is dive into financials every week.
But spending 15 minutes on seven metrics weekly is the difference between a healthy agency and one that surprises you with money problems.
Here are the metrics that matter.
Metric 1: Monthly Recurring Revenue (MRR)
What it is: How much predictable revenue you get monthly from retainers.
Why it matters: This is the floor. This is money you can count on. Everything else is bonus.
How to calculate:
- Add up all monthly retainers
- That's your MRR
Example: You have 5 retainer clients at $3K, $4K, $2.5K, $5K, $3.5K = $18K MRR
Why it's important: If your MRR is $18K and costs are $22K, you're underwater before you even get project revenue.
Target: MRR should cover 60-70% of your monthly costs. The remaining 30-40% comes from projects.
Metric 2: Utilization Rate
What it is: Percentage of your team's time spent on billable work.
Why it matters: If utilization is below 65%, you're overstaffed or not selling. If above 85%, you're burning people out.
How to calculate:
- Billable hours / available hours = utilization
- If your team worked 720 billable hours and had 1,000 available hours: 720/1,000 = 72%
Why it's important: This tells you if you can afford your team.
Target: 75-80%
Metric 3: Revenue Per Employee
What it is: Total revenue divided by headcount.
Why it matters: Tells you if your team is generating enough revenue to cover their cost and overhead.
How to calculate:
- Monthly revenue / number of employees
Example: $120K revenue / 4 people = $30K revenue per person per month = $360K annually per person
Target: $250K-400K annually per employee. Below $250K means your pricing is too low or people are underutilized.
Metric 4: Profit Margin (Net)
What it is: Revenue minus all expenses, divided by revenue.
Why it matters: This is what you actually keep. You could have $1M revenue and 3% margin (bad) or $1M and 20% margin (good).
How to calculate:
- (Revenue - Expenses) / Revenue = Margin
Example: $120K revenue - $100K costs = $20K profit = 16.7% margin
Target: 12-18% net margin for healthy agencies. Below 10% is struggling.
Metric 5: Days Sales Outstanding (DSO)
What it is: Average number of days between invoicing and payment.
Why it matters: This tells you your cash flow situation. If clients pay in 60 days, your cash is tied up.
How to calculate:
- Total invoices outstanding / daily revenue x number of days
- Or: just track average days between invoice and payment
Example: You invoice $4K, they pay on day 35. DSO = 35 days.
Target: Under 30 days. Over 45 days means cash flow problems.
Metric 6: Project Margin
What it is: Revenue minus direct costs on a project, divided by revenue.
Why it matters: Tells you if individual projects are profitable.
How to calculate:
- (Project revenue - labor costs) / project revenue
Example: $10K project, 60 billable hours at $100/hour = $6K cost = ($10K - $6K) / $10K = 40% margin
Target: Projects should be 35%+ margin. Below that, you're pricing too low.
Metric 7: Pipeline Value
What it is: Total value of proposals outstanding.
Why it matters: Tells you if you have enough work coming. If pipeline dries up, revenue stops in 4-6 weeks.
How to calculate:
- Add up all open proposals
- Multiple by your close rate (if 50% of proposals convert, multiply pipeline by 0.5 to get realistic revenue)
Example: $80K in open proposals x 50% conversion = $40K expected revenue in next month
Target: Pipeline should be 2-3x monthly revenue. If monthly revenue is $100K and pipeline is $150K, you're fine. If pipeline is $30K, you're in trouble.
The Weekly Dashboard
Create a simple spreadsheet:
| Metric | This Week | Last Week | Target | Status |
|---|---|---|---|---|
| MRR | $18K | $18K | $20K | Yellow |
| Utilization | 72% | 70% | 75% | Yellow |
| Rev/Employee | $30K | $28K | $30K | Green |
| Net Margin | 15% | 14% | 15% | Green |
| DSO | 32 days | 35 days | <30 | Yellow |
| Avg Project Margin | 38% | 35% | 40% | Yellow |
| Pipeline | $60K | $45K | $100K | Red |
Update this every Friday. Takes 10 minutes if you have the data.
Where To Get The Data
- MRR: Your accounting software (invoice totals)
- Utilization: Your project management tool (hours tracked)
- Revenue per employee: Your accounting + headcount
- Profit margin: Your accounting (monthly P&L)
- DSO: Your accounting (days between invoice and payment)
- Project margin: Time tracking + project revenue
- Pipeline: Your CRM (open proposals)
If you're not tracking these, you don't have enough visibility. Start tracking now.
What To Do When Metrics Go Red
If utilization drops:
- You're not selling (invest in BD)
- You're overstaffed (pause hiring)
- Clients are asking for more scope (fix estimation)
If revenue per employee drops:
- You're pricing too low (raise prices)
- People are underutilized (see above)
If profit margin drops:
- Costs went up (audit software, payroll)
- Revenue went down (see pipeline)
- Overservicing is killing margin (track actual hours)
If DSO goes up:
- Clients are slower paying (change payment terms)
- You're not following up on invoices (assign someone to do this weekly)
If pipeline dries up:
- You've stopped selling (increase BD effort)
- Close rate is too low (improve proposals)
- You're in seasonal dip (plan for this)
FAQ
How often should I look at these metrics?
Weekly minimum. Some agencies look daily. Weekly is enough for spotting trends early.
Should I share these metrics with my team?
Absolutely. Share your dashboard in a monthly all-hands. "Here's how we're doing." Transparency builds accountability.
Which metric is most important?
Pipeline. If your pipeline is full, you can fix most other problems. If pipeline is empty, everything else is irrelevant.
What if I don't have good data to calculate these?
Track hours in your project management tool. Track revenue in accounting.
Track pipeline in CRM. It takes two weeks to get good data, then it's easy.