Mastering Project Profitability for Agencies

Profitability is Not Just Revenue

Many agencies fall into the trap of thinking that a high-revenue project is a profitable one. However, without tracking internal costs and overhead, you might be losing money on your biggest clients.

The True Cost of a Billable Hour

To calculate project margin, you must understand your effective hourly cost. This includes:

• Direct Salary of the employee.
• Allocated Overhead (rent, software, insurance).
• Non-billable time (meetings, internal projects).

Tracking Burn Rates in Real-Time

Don't wait until the end of the month to realize you've over-serviced a client. Tempus provides live burn-rate tracking. If a project budget is €5,000 and you've already spent €4,000 in labor costs with only 50% of the work done, you have a problem.

Improving Utilization Rates

The goal isn't just to work more; it's to work more billably. Aim for an agency-wide utilization rate of 70-80%. Anything higher leads to burnout; anything lower leads to financial strain.

Published on May 10, 2026 on the tempus.xhub Blog.