From Losing Money to Strong Profits-Real Client Case Study, With Carson Pierce

Update: 2025-11-05

Description

Points of Interest

00:00 – Introduction: Marcel welcomes recurring guest Carson Pierce to the Agency Profit Podcast and introduces a new format—walking through a real, anonymized client assessment to show how Parakeeto diagnoses and solves profitability challenges.
02:00 – Every Agency’s Problems Are Unique but Familiar: Carson explains that while every agency’s situation feels unique, most share a few core underlying problems that manifest differently based on team structure, services, and culture.
03:40 – Client Background: The featured firm had around 12 staff, close to $1M in revenue, but was losing roughly $80K per year. Despite solid demand, they couldn’t pinpoint the source of their declining profit.
05:00 – Early Misdiagnoses and Attempts: The leadership team suspected overhead costs like health insurance and software were to blame and tried tightening internal processes, but those adjustments didn’t solve the deeper financial issues.
06:30 – Leadership Misalignment: With multiple co-founders holding different perspectives, the agency struggled to align on the root cause of its issues, each assuming the problem lay outside their area of expertise.
10:00 – Starting the Assessment: Carson outlines Parakeeto’s assessment process—benchmarking against a healthy “agency model,” ingesting financial and time data, and identifying gaps between planned and actual performance.
11:50 – Payroll Red Flag: Analysis revealed that 98% of all revenue was going directly to payroll, leaving no margin for overhead or profit—a clear signal of structural imbalance.
13:30 – Data Gaps and Adjustments: The team had poor time-tracking compliance and a prepaid revenue entry on the P&L that skewed results. Parakeeto corrected these to reveal a more accurate financial picture.
16:30 – Root Causes Identified: The agency was top-heavy with overhead roles, under-utilized due to a bottlenecked design team, and priced below the level their delivery costs required.
20:30 – Building the Roadmap: Quick wins included improving time-tracking compliance and reclassifying project management and account management as billable delivery hours. Longer-term actions included hiring a designer, raising prices 10–15%, and training PMs in scope management.
25:50 – Strategic Choice: Grow, Don’t Cut: Instead of downsizing, the founders chose to grow out of the constraint—adding delivery capacity to balance the team and improve utilization since demand existed.
28:40 – Coaching and Next Steps: Carson explains the ongoing coaching plan—educating on data hygiene, improving utilization, then progressing to deeper ABR and project-level analysis—focusing first on leading indicators before tracking lagging outcomes.