How to Manage Your Creative Firm and Make a Profit
Read time: 3 minutes
In many respects, creative firms operate just like any professional services company. There is a requirement to track time and expenses as they relate to both billable and non-billable work to ensure that the agency is profitable and that the business remains sustainable at the most basic level.
Creative Business (creativebusiness.com) defined this in their March/April 2010 Newsletter, stating requirements to “keep an eye on project, account, and overall business metrics – productivity, billable efficiency, profitability, and so forth” and a micro level “every project requires some combination of estimates, schedules, approvals, purchase orders (POs), time sheets, placement orders, receipts, changes, invoices, payment records, and ledger entries.” Agencies are interested in better defining their workflow processes, are looking for solutions that meet specific needs and the ability to collect all (or most) of their relevant data in one system.
According to Second Wind (secondwindonline.com) there are eight must haves in a creative agency workflow. A solid traffic system; a traffic facilitator; precision job scheduling; a time recording process; collaboration diaries; POs, estimates and ownership; in house and freelance staff; and aligned vendors. A complete agency management system will touch all of these components of the workflow, either as the tool to capture the relevant information, or to facilitate management for staff in the organization. With the growing desire to have information available at all times, with a lower cost due to shrinking budgets, the SaaS model is an ideal fit.
An effective implementation and standardized process will enable the creative firm to save money by increasing resource efficiencies, which will help increase focus on billable work. “To have a fast, smooth agency workflow, agencies need a specific system to open jobs, build creative briefs, create estimates and timelines, organize daily efforts, post workers’ time to projects, issue purchase orders to vendors, record miscellaneous expenses, and create invoices.” Relating these requirements to the selection of a larger scale ERP system points out the need to focus on the relationship between the agency and the SaaS provider.
Given the economic variables of working with smaller agencies and the lack of budget to rely on third party consultants, it is key for the provider to develop a core competency in best practices of the complete agency workflow. The provider will effectively become the business process partner of the agency and serve as both business consultants and IT experts. Regardless of what software an agency uses, the level of support and consulting should be a major consideration.