How to make consistent profits every month
How can my creative agency be worth millions or reach millions in valuations?
The Challenge
Ready for their next phase of growth, this creative agency didn’t believe that their current financial setup would be quite right for where they wanted to get to. They wanted to reach a higher business valuation and an increase in monthly profits.
Often, when looking for a new financial adviser you may choose to seek proposals from different businesses.
You can make your own assessments as to what you think you need help with, but you also don’t know what you don’t know.
To take your creative agency to over millions of pounds valuation, and making consistent profits each month, will require a more strategic, forward-thinking team. You should have easy access to your financial advisors and they should be able to help you present your financial information to you in a way that is clear, so you understand.
Without these basics, it will be difficult to see how your creative agency is becoming more valuable and increase your average monthly profits.
The Approach
It was clear that this creative agency wanted to track very specific metrics that were focused on showing the business increasing in value.
Business metrics like:
- How the average retainers were increasing?
- How project fees were converting into longer term retained contracts?,
and showing that the team cost to fee ratio was maintained as fees grew.
Having a budget to track against actual business performance is very important, so there is something to reach and stay on track for.
Creative agencies also appreciate visual representations of their financial information. It helps to absorb key financial information about profits, growth and value.
Having access to a finance team when they need guidance has proven helpful, but also reassuring that the right decision was made when looking for new financial help.
Creating a flexible business forecast, composed of actual results and forecasted pipeline ensured they could keep their finger on the pulse.
Having a scenario planning business tool was a game changer for the senior management team. They use this when assessing how their tenders could play out and where to focus their pitching efforts so wasted time is minimised.
The Outcome
The latest valuation of the business was over £4 million
The business has averaged year on year growth in revenue of > 25%
Every year, profit has grown consistently and superseded its punchy budget figures.
“Over the last couple of years OutRise has become the Obi-Wan Kenobi to With’s senior team. We could not have entered the current economic climate without being skilled financial jedis.”
Elizabeth Jones, Managing Director of With
