Promoting the right priorities within your organization
Here’s what you want folks in your services business to spend their time on:
- Billable work
- Selling new business
- Client growth
- Project profitability
- Cash flow
Basically, revenue and continuity. Most activities that do not fall in these categories have the potential to seriously impact your bottom line. And not in a good way.
Things that do not add to your top line should be eliminated where possible. Logical, but also scary. How do you retain control?
Why you should set cadences to manage growth
Whether you run a digital marketing agency or an IT services company, growing your business is not unlike gardening; you have to tend to your garden regularly to carefully manage the growth and cultivate the results you want.
To help with this, businesses often hire senior-level managers and professionals with titles like VP of Operations to oversee teams, processes, workflows and financial flows. While these management teams can ensure appropriate resource training, pace of work and productivity, they also substantially increase overheads, quite probably in step with any revenue increases. So the business may grow, but its net worth may not really budge.
The kicker is, if these organizations lack competent operational cadences, they’ll still struggle to stay on top of everything, which can directly impact productivity and cash flow. They must get business operations on a regular schedule to introduce structure, discipline and predictability that enables teams and project managers to successfully manage and organize items like invoices, timesheets and revenue forecasts. Only then will they have the bandwidth to maximize a service firm growth strategy like productizing services.
- Resource forecasting and planning for the following week
- Timesheet submissions
As projects develop and hours are consumed, changes may become necessary to keep schedule, quality and budget in balance and on target. Taking care of resource forecasting and planning on a weekly basis makes your teams more adaptable to these changes. Ideally, it should occur on Friday for the following week.
Invoicing should be done weekly and thus, so should timesheet submissions. Pick a day of the week to attend to both and do your invoicing directly after all timesheets have been collected. Our recommendation is to set a timesheet deadline around 10 a.m. on Monday morning and do your invoicing runs that day at noon.
Why weekly and not monthly invoicing? For one thing, growth depends on cash flow, so you need to be fastidious to ensure that payments are timely and regular.