Is your service business optimized for profitability? Do you know where you are making money and where you are bleeding money?

Making the agency model work comes down to three things:

1. Hiring good people who get clients results and help you retain those clients;


2. Charging the right prices for your services;


3. Getting proper data on work to know which teams and projects are profitable and which are not.

Marcel Petitpas is the cofounder and CEO of Parakeeto, which is a soon-to-launch agency software company that, as they say on their homepage, “automates your reports so you can simulate decisions & make more money.”

As he says:

The goal is to help make it easier for service businesses to track the critical metrics that determine their profitability which is a notoriously hard thing for them to do unless they’re a big enterprise company and have hundreds of thousands of dollars for enterprise licenses for software. So if you find yourself building a spreadsheet to try and figure out simple stuff like, did we make money on this project? That’s the problem we’re trying to solve.

Resources mentioned

The resources mentioned are:

• Parakeeto


• Parakeeto Agency Toolkit


• Dan Martell’s SaaS Academy


• Credo


• Databox

Transcript

John Doherty:

Hello everybody. Welcome back to the Credo podcast. It’s been a little bit since I’ve done one of these episodes but trying to get back to it. I’ve been producing a lot of content other places, on the blog, on YouTube, writing a lot of emails. All of that, but kick starting this back again because I’m recognizing that I’m not an expert in everything. There are a lot of people out there that are super, super smart. I’ve been doing a lot of solo episodes on this in the past but I’m trying to get back to a bit of a balance, of solo episodes teaching you things but also bringing on experts, people that I listen to, that I respect, often friends of mine, and letting them share their genius with you as well.

John Doherty:

So today, I have Mr. Marcel Petitpas from Canada on the call with me. Marcel and I are both a part of SaaS Academy, which is Dan Martell’s group coaching program. Marcel and I have become friends over about the last year or so. He’s a marketing wizard.

He’s phenomenal at what he does, especially with Facebook ads and that sort of thing. He’s helped me out a ton, taught me a lot, helped out Credo a lot as well. Basically what he says, is he helps high growth creative agencies, consultancies and service businesses track the right metrics and maximize their profitability. So now only is he a phenomenal marketer but he’s also a phenomenal business mind. I’m really excited about this because agency operations, agency profitability, to be completely honest, is not something I know a ton about. Or it’s not something that I would consider myself a world class expert in versus Marcel is. He is the co-founder and I believe CEO of Parakeeto. Marcel, welcome to the show. If you would, introduce us. Tell us about Parakeeto, tell us about yourself.

Marcel Petitpas:

Thank you for the very generous and kind introduction John. It’s an honor to be here and I’m excited that anyone is tuning in to listen to this. I hope that I’ll be able to share something that is going to be valuable. Yeah, to kind of summarize what I do. I’m an agency profitability consultant. I’m also a business coach and I am the head strategic coach at SaaS Academy so I’ve spent a very big part of my career helping business owners become more successful and particularly have a focus on software and marketing or consulting businesses.

Marcel Petitpas:

What we do at Parakeeto is we’re building a set of tools. The goal is to help make it easier for service businesses to track the critical metrics that determine their profitability which is a notoriously hard thing for them to do unless they’re a big enterprise company and have hundreds of thousands of dollars for enterprise licenses for software. So if you find yourself building a spreadsheet to try and figure out simple stuff like, did we make money on this project? That’s the problem we’re trying to solve.

John Doherty:

Awesome, awesome. I love it. And I agree, it’s a deep deep world. It’s something that not a lot of people are doing well. Often what I find, is a lot of agencies, especially smaller ones, are doing a lot of bank account accounting, where it’s do we have more money in our bank account this month than we had last month? But they’re not looking at, was this project profitable, was it not? What should we be selling more of? What should we be selling less of? All of those sorts of things.

John Doherty:

I’m curious about the why behind the what. So you told us what you’re doing, but why? Why is agency profitability a focus for you? What’s the background story there? I don’t even know this, so all you listeners are getting this for the first time, getting abreast just like I am.

Marcel Petitpas:

Yeah, it’s really interesting. I think like most people that work or had their own agency, I left that world to go into software because it was much sexier. I didn’t really know at the time that it was so much harder. That’s a lesson that I learned later on. But I actually started… My first business ever was an agency and we were doing virtual reality services for real estate agents. So we would go in, this was back before you had Mad Report. This was right around the time that things like Mad Report were coming online. At that time, you still had to buy a DSLR and you had to get this special rig and you had to take a bazillion pictures and you had to stitch them altogether and you had to take those stitched together 360 images and put them into a virtual software and create a 3D model of the house and create a virtual experience.

Marcel Petitpas:

So that’s what I was doing. I hated it. I realized that real estate agents were so cheap that they were never really going to be willing to pay me what I needed to scale the business and reach the unit economics. I’ve always been that kind of person, that is validating the unit economics before I even start validating the idea to figure out if they can scale. I was very early on in my agency when I figured out, I’m just not able to drive up this price. Real estate agents in my market at the time were just not willing to pay more. I saw the unit economics were not going to work and I realized at that moment that it was really challenging.

Marcel Petitpas:

Then I left and said I want to build a software company. Fast forward like three years, this is after I met Dan. We became friends. I tried to start a couple of other businesses. I ended up becoming a consultant and a speaker and did that for a year professionally, then got into Dan’s world. Then we got a phone call one day from Jarrod Ferguson, who you might know from SaaS Academy.

He runs an agency out in Boise. He just said, “Dude I’ve got this problem. I am sick and tired of building spreadsheets to answer questions I’m asking myself everyday. I’ve looked out there and the only options that exist is moving my whole team off of the tools that they know and love now into an all in one platform. It feels like a compromise and is super expensive and we’re going to grow out of it in three years. Or option number two is I try to build my own tool.” That’s basically the options that they had in front of them. Or take a BI tool, like Tableau or Databox and do a bunch of custom dev on top of it and then you have this half bake