DBA Members’ Forum | June Summary
In our June Members’ Forum we took a deep dive into building financial resilience in our businesses and teams and members shared some hugely valuable insights, so a big thank you to our speakers for being so open. Here’s a summary of the conversation we had.
- Income per head is an important metric to track, and easy enough for everyone to understand – one speaker suggested £10k per person per month as a good target to aim for. If you need help with this, or any aspect of completing the DBA’s Annual Survey, then get in touch with Adam. Note the DBA recommends £100-120k per person per year (especially for London based agencies that have a higher cost base to cope with). London based DBA members average £107k per head if they do not include freelancers, but as freelancers are a people cost to create income they should be included. This made the average for London based DBA member agencies £97.5k per head in 2022. Outside of London the average (inc. freelancers) was £80k per head.
- Keep an eye on cashflow, and keep at least 2-3 months of overheads covered in cash reserves. And if you don’t have that yet, you can cut back on costs and bake the discipline into the team. One member built their culture around everyone in the team understanding where they can add value and how their individual actions, be that ordering pos-its or working late on a deck, contribute to the bottom line.
- If your team understand where they can add value, it helps them to prioritise what they spend time on and know what actions make the most money, otherwise they were busy but making no money. And if there is a project that isn’t the most profitable, but keeps the team engaged or brings publicity, then only one at a time makes financial sense, and share your decision making with the team so they understand why you’re choosing one client over another.
- Being able to say no and resisting those ‘sugar rush’ easy wins is key. Blair Enns has some great insights on this. Listen to his podcast with David C. Baker here or his new podcast on dealing with procurement departments here. You can also get his latest book with an exclusive DBA member only discount: use code DBA2023 to get the ‘action pack’ version of Pricing Creativity for $199 instead of $320. Be quick, that expires on Friday.
- Scenario planning was a vital way one member ensured their business was financially resilient, giving the team accountability and encouraging them to be honest and realistic about their pipelines so you can have the data at your fingertips. What if we lost that client? Or if they don’t pay on time or the scope creeps? Being able to make decisions on this information is crucial, especially in times of uncertainty.
- Do you have an invoice finance facility set up? Don’t wait until you need it. If payment terms aren’t at an ideal 30-day level, you can suggest a 1% reduction in overall fees and save yourself money on your invoice facility.
- Private banking might also give you much better, more personal and experienced advice than your high street banks – one speaker recommended Arbuthnot Lantham, other banks are available.
- Getting external support can be critical for those of you who are too close to the work to be objective – the DBA Experts can help.
- For more on financial resilience, we had a webinar last month on the same topic with a panel of DBA experts, you can watch the recording here.
Our Members’ Forum takes place on the first Monday of each month, at 4 – 5pm. If you would like to attend, get in touch here.
Our next Members’ Forum will be taking place on Monday 3 July at 4pm BST.