Focus on your output

There is a growing trend toward output based interactions—the majority of your clients now expect to know exactly what you are delivering. And even more than this, they want to know about the outcomes—the value your outputs will give to them. Measuring what you are delivering is relevant whether you price based on value, or not.

Firstly, if your team tracks their time and you charge by the hour, you can look at your utilization and realization to determine your output. Utilization refers to the amount of time that is being spent bringing in revenue to your practice. It can apply to a staff member, your team or firm as a whole, or even a system. Your realization rate is the percentage of standard billing rates that you actually collect—taking into account discounts on your standard rates, fee reductions and write-offs. You can multiply these two figures together to determine your output—top line revenue.

If on the other hand, you price based on fixed fees or on a value pricing model, you are already driven purely by output—you deliver something, and you get paid a certain amount for it. The key is to maximize the value for you and your client by ensuring you provide at least the value they expect, while spending as few resources and time to create that value (more on this later).

Whatever your pricing model is, to grow your top line you need to be looking at boosting your output. And despite common assumptions otherwise, you can do this without increasing the size of your team. Instead, you should focus on process refinement. Improving the method your team delivers output will lead to big gains in efficiency—you’ll be able to produce more with less people and in less time.

Standardization comes first

You can’t improve a process if work is being performed inconsistently across your team. If all of your staff are taking care of the same tasks with different methods—no matter how small the difference in those methods is—you are running an unwinnable race. This is why standardizing your processes is so important—when the optimum way for every task to be completed is documented, you have a baseline to track and measure performance against.