{"id":10094,"date":"2025-03-11T09:53:06","date_gmt":"2025-03-11T09:53:06","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=10094"},"modified":"2025-03-11T09:53:08","modified_gmt":"2025-03-11T09:53:08","slug":"increase-profit-professional-services-firm","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/increase-profit-professional-services-firm\/","title":{"rendered":"4 ways to increase profit for your professional services firm"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\t4 ways to increase profit for your professional services firm\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Jennifer\t\t\t\tJennifer Wilson<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Is your business missing out on revenue? Maybe.<\/p>\n\n\n\n

Many professional services firms knock their prices down in a bid to retain as much business as possible.<\/p>\n\n\n\n

While this may have worked as a temporary solution, it\u2019s unsustainable in the long-term.<\/p>\n\n\n\n

But there are a series of straightforward ways you can take right now to correct course and boost your profits. Read on to find out exactly what they are and how you can get started.<\/p>\n\n\n\n

Here\u2019s what we cover:<\/p>\n\n\n\n

Boosting profitability in professional services<\/a><\/p>\n\n\n\n

1. Keep non-billables to a minimum<\/a><\/p>\n\n\n\n

2. Track project spending<\/a><\/p>\n\n\n\n

3. Boost your utilisation rates<\/a><\/p>\n\n\n\n

4. Review your pricing<\/a><\/p>\n\n\n\n

Next steps: The metrics for professional services firms to track right now<\/a><\/p>\n\n\n\n

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Download your free copy of 6 key metrics for professional service organisations<\/a><\/div>\n<\/div>\n\n\n\n

Boosting profitability in professional services<\/h2>\n\n\n\n

Globally, the average profit margin for professional services firms in 2021 sits at around 36%, but varies depending on the type and complexity of the service you offer.<\/p>\n\n\n\n

Commodity firms \u2013 which help clients with basic, routine problems quickly and efficiently \u2013 tend to see margins in the single digits.<\/p>\n\n\n\n

Meanwhile, \u2018rocket science\u2019 services addressing specific, difficult problems for their clients can see profit margins over 50%<\/a>.<\/p>\n\n\n\n

No matter what kind of practice you\u2019re running, the bottom line is the same: you need to protect your bottom line.<\/p>\n\n\n\n

As the world opens up again, it\u2019s the perfect time to revisit your strategy.<\/p>\n\n\n\n

Widening your profit margins starts with a deep dive into how you and your team spends your working hours each day.<\/p>\n\n\n\n

Start by breaking down the real cost of doing business, and work out which areas you can fine-tune or completely revamp to do things more efficiently.<\/p>\n\n\n\n

It all boils down to protecting your most valuable resource: time.<\/p>\n\n\n\n

Below, check out four ways you can boost profitability at your business.<\/p>\n\n\n\n

1. Keep non-billables to a minimum<\/h2>\n\n\n\n

The idea that every minute of every workday could be dedicated, unflinchingly and fully focused, to project work, is unrealistic.<\/p>\n\n\n\n

And activities such as creating marketing materials, answering emails, preparing pitches, doing research, and so on might not directly make money for the business, but they\u2019re a vital part of winning \u2013 and retaining \u2013 clients.<\/p>\n\n\n\n

There are non-billables that can be cut down to size by making sure you and your team aren\u2019t getting bogged down in unnecessary admin or overly complex processes.<\/p>\n\n\n\n

One way to do this is to ask your team to record their non-billable hours in the same way they do for their billables.<\/p>\n\n\n\n

Talk to your people and ask them what parts of their job they feel might be sucking up more than its fair share of time.<\/p>\n\n\n\n

Remember, some employees might feel uncomfortable speaking about this face-to-face or in a group, so make it possible for your team to share their thoughts on this anonymously.<\/p>\n\n\n\n

2. Track project spending<\/h2>\n\n\n\n

Making sure your estimates are as accurate as possible is vital because this helps you kick things off on the right foot.<\/p>\n\n\n\n

But it\u2019s even more important to keep a close eye on your project spending over time.<\/p>\n\n\n\n

There are three key things to keep in mind here:<\/p>\n\n\n\n