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Agency Gross Income

I know there is an Agency Gross Income formula and that an agency tries to keep its labor cost to no more then 50% of its AGI. Does anybody know what the AGI (Agency Gross Income) should be for departments (Creative/ Production, etc..)?

Thanks,
Ed Miller Grafica

I don't remember off the top of my head what those ratios are. However, Creative Business, a publication for creative firms is a great source for those sort of things. I know I've read that type of information in the publication before. Phone number to get more info. at Creative

Business: (617) 424-1368.

Lucia Mumm,
Full Circle!

You can contact Agency Management Roundtable, they do some interesting seminars for small to medium agency's. He covers all this in his financial roundtable. His phone number is 920-465-7665. (p.s. he is a huge fan of C&P).

Shelly Constantz,
Just Partners

I have often considered doing one of these seminars - would you recommend this group or any seminar in particular?

Natalie Gerngross,
Gerngross & Co.

I do recommend his seminars if you are a small agency dealing with primarily with project work. I attended his owners roundtable and he can help with moving the company to the next level. And you meet other owners/sr level exec's from other agencies that you can build a network with to discuss how they have handled challenges. He is very careful about who attends the seminar to make sure it isn't your diret competition. And then he has a newsletter that I have found to be useful, as well as an annual survey covering employee compensation and billing practices. So, I would contact him and get his informational booklet, or go to www.roundtable.com

Shelly Constantz,
Just Partners

We set a goal that our Direct Labor is 33% of Gross Income. We breakdown that 33% as follows: 40% Creative 40% Client Service 10% Traffic/Production 10% Media