A creative agency grew revenue 22% while team cost grew 13%
A 10-person creative agency running video, design and web
Fractional CFO, weekly bookkeeping
- Revenue +22%
- Team cost +13%
- Net income 3x
Revenue up 22% in eight months, team cost up only 13%, net income three times the prior year period, and receivable days back to normal inside a month.
+22%
Revenue year over year, through eight months
3x
Net income through five months against the same period last year
+13% vs +22%
People cost growth against revenue growth
20 to 4 days
Accounts receivable days, back to normal in a month
Percentages, multiples, counts and timeframes only. Client revenue, profit and cash figures stay private.
The short version
- Not a rescue. A growing 10-person agency, and growing is when margin walks out the door.
- We put people cost as a share of revenue on a chart with a rolling average, and it bent down while the team grew.
- Revenue up 22%, team cost up 13%, net income three times the prior year period.
- Plus a pass-through P&L, equipment off the P&L, and a gross-profit-only report so a manager could own margin.
Growing, and not sure where the margin is going?
That's the exact situation on this page. Thirty minutes tells you if it's yours too.
The situation
The agency is 10 people running video, design and web work. We first talked in December 2024 and the agreement took effect the following April.
When we started, the agency was growing.
The owner's instinct was already right. He had a people cost target in his head and a reason for it: "I like to keep things simple."
What he didn't have was a monthly read telling him whether he was hitting it, or what moved the number when he wasn't.
The industry wasn't helping. Partway through 2026 he described business development across the industry as "very challenging right now." The 22% was grown into that.
What we did
Put people cost on a chart with a rolling average
People cost in dollars grew 13%. Revenue grew 22%. So the percentage got better even as the spend went up, and the rolling average bent downward.
The whole engagement in one line
That was true before we arrived. It was invisible until it had a chart. Since April the rolling twelve-month figure has held flat through team changes, contractor-to-employee shifts and a sales role coming off payroll.
Built a mini P&L for billable pass-throughs, because he asked
Client travel, meals, advertising, billable and production expenses were all being spent and rebilled across dozens of projects. The books couldn't say whether the rebilling covered the spend.
We consolidated all of it against the matching income, monthly and annual. The aggregate came out positive, and wide enough that he decided to audit his own team's billing.
I want to make sure that we have integrity, so I'll check into this too.
A report that makes an owner check his own work is doing its job.
Moved equipment off the P&L
Photo and video gear was hitting the P&L in the month it was bought, which made margin look worse in heavy purchase months and better in quiet ones. It sits on the balance sheet now and depreciates over the years it gets used.
Split an operations salary across the gross profit line
One team member spends about half her time on client project management. Half her payroll lands in cost of goods sold now and half stays in operating expenses, so gross profit reflects the delivery cost it carries.
Built a gross-profit-only report so a manager could own margin
The owner wanted to hand gross profit margin to a senior team member as his primary KPI, with an incentive tied to hitting it.
But he couldn't hand over QuickBooks access without exposing owner pay, and permissions weren't enough: anyone who sees the P&L can work backward.
The report stops at the gross profit line. A high-level summary with a granular breakout underneath, monthly, delivered as soon as the books close.
Want this chart on your numbers?
People cost as a share of revenue, with the rolling average. It's in every dashboard we build.
Where it landed
Through eight months of 2026
Revenue up 22% year over year. Team cost up 13% over the same stretch. Net income through the first five months running three times the same period the year before. Receivables ran up to 20 days once and came straight back inside a month.
The owner's own framing of why the gross profit focus works: "If I control my COGS it makes my revenue pretty explicit ... it's pretty predictable if I hit my GP."
I'm trying to get everybody on your system because it makes my life easier.
What this maps to
- Service: fractional CFO for agencies, and the dashboard that carries these charts
- OS module: Team Pay System, which is where the people cost benchmarks live
- OS module: Agency Profit Engine, for margin by revenue band
Questions
The ones people actually ask on the first call
What was the single biggest lever in this engagement?
Holding people cost in dollars roughly flat while revenue grew. The spend rose 13% and revenue rose 22%, so the share improved without anyone cutting the team. The rolling average chart is what made that visible month to month.
How do you give a manager a margin target without showing them owner pay?
A separate report that stops at the gross profit line, delivered monthly as soon as the books close. Permissions alone are not enough, because anyone who can see the full P&L can work backward to owner compensation.
Why move equipment purchases to the balance sheet?
Because the gear gets used across several years. Expensing it in the month of purchase makes margin look worse that month and better in every month after, which hides the real run rate.
Does an agency this size need weekly bookkeeping?
This one gets it, and the reason is close speed. Books updated weekly mean a short close and questions about a transaction surfacing days after it happened rather than weeks later.
Did accounts receivable running to 20 days signal a problem?
No. One month of timing on a large open balance, back to normal the following month. Flagging it anyway is the point: an owner should hear about a swing while it is still a swing.
Next step
Thirty minutes, and you'll know where you stand
Bring last month's P&L. We'll tell you what it's actually saying about your margin, your owner pay and your next hire. If we're not the right people to fix it, we'll say so on the call.
You bring
Last month's P&L. That's it. No prep, no forms.
We do
Read it live and tell you what it says about margin, owner pay and your next hire.
You leave with
The two or three things worth fixing first, whether or not you hire us.
No deck, no pitch. If we're not the right people for it, we'll say so on the call.