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AD CLUB
LEARNS TOP 10 AGENCY MISTAKES
Mark Robillard talks profit margins, agency
prosperity at Inland Empire Ad Club
meeting
April 26, 1999 -- OCEANSIDE, CA -- An old Chinese proverb
reads "A wise man learns from his mistakes, but a wiser
man learns from others' mistakes."
California's Inland Empire Ad Club had the chance to be
the wiser at their April 22 meeting in Ontario when
Clients & Profits developer Mark Robillard identified
the 10 biggest mistakes an agency can made. As CFO for
one of Dallas' largest ad agencies, Mark managed the
day-to-day operations and financial strategies--while
sidestepping many of those fatal business errors.
"The number one mistake agencies make is not knowing
their profit margins," Mark said. Recently, the American
Association of Advertising Agencies published a startling
statistic: most agencies reap a net profit of less than 1
percent for every $100 billed. After outside vendors,
agency expenses, and income taxes are paid, agencies are
left with pocket change: only 83 cents. "The solution,"
Mark said, "is to move agency expenses to the client side
of the billing equation, so the agency retains more
pretax profit."
Other mistakes include inconsistent estimating, poor
record keeping, unbilled job costs and internal charges
(things like color laser copies and long distance phone
calls), heavily relying on one or two clients for the
majority of your revenues, and carrying receivables for
long periods.
The solution can make even the most seasoned principal
grimace: implement a good agency management software to
track jobs, costs, billings and revenues. The software
should include comprehensive reporting features so you'll
know exactly where the money is coming from, where its
going, and how much.
Identifying the revenue drains are the first step in
plugging them up. The next step is to analyze the
agency's finances to boost profitability. "That's what
makes a stronger agency," Mark said. "That's what makes
an agency prosper."
Clients & Profits,
Inc., founded in 1986, is the leading developer of job
tracking and business accounting software for advertising
agencies, design firms, and corporate marcom/graphics
departments that use Macintosh and Windows.
Clients & Profits and Software for the Business of Being Creative are trademarks of Clients & Profits, Inc. All other trademarks are the property of their respective owners.
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FOR MORE INFORMATION: Contact Judy Hector, Clients & Profits Marketing Manager
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