Many agencies are feeling the C19 squeeze and cashflow runways are running out. Paul Winterflood from Moore Kingston Smith joins us to explain the critical KPIs that all agencies should be shooting for and where to financial management. These are magic numbers for marketing agencies.
- Staff costs as a percentage of Gross Income should be no more than 55%. 60% is the non-stretch target
- Gross income per head should equal £120,000 or more. The non-stretch target is £100,000
- Overhead cover should equal three months’ worth of overheads in net current assets as a minimum
- Operating profit should be 20% or more
- Revenue growth should exceed 10% per annum in normal times
About Moore Kingston Smith
MKS is the only firm of accountants and advisers with a dedicated office of over 100 media specialists that proactively support the extensive range of needs of independent media businesses – covering marketing services, film & TV and entertainment, theatre and mediatech.
MKS knows it’s not just about the numbers. As well as providing accountancy, tax and corporate finance services, over the years, by working with some of the industry’s most successful companies, they have developed a deep understanding of what drives media businesses. As a trusted adviser MKS uses this experience to work in partnership to help maximise growth and profit potential.
They conduct extensive research into industry performance every year with a view to understanding not just the benchmarking data, but also identifying what the best performers do to achieve exceptional results. Their well-developed structured approach to strategic advisory services helps effectively manage risk, build revenues, attract and engage people and identify key opportunities to improve performance and enterprise value.