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This firm’s billable utilization sat at 30 to 40 percent while the industry standard for a healthy services firm is at least 65. That gap is where the profit quietly leaks out.
A marketing services founder laid the number down without flinching. Utilization was around 30 percent in May and roughly 40 in June, against a bar the founder put at “at least 65, probably north of that.” Every point below that line is capacity the firm pays for but never gets to bill.
The founder was clear it is not one fix. Founders stuck in delivery instead of selling, roles that are not sharp, a pipeline that lands in lumps, all pull the number down at the same time.
“We’re at 30% in May, I think 40% or so in June. You know, our industry, we need to be at at least 65%, probably north of that... and there’s 15 levers that impact it.”
Why it matters to you
Utilization is the quietest lever on your P&L and the one most founders never put a number to. At 40 percent against a 65 target, you are carrying payroll for work that never gets invoiced. Closing even part of that gap falls almost straight to profit, without signing a single new client. The firms that calibrate against a real peer number find the leak. The ones that guess keep hiring to fix a problem that hiring makes worse.
Your one thing
Pull your billable utilization for last month, one number: hours billed over hours available. Is it north of 65 percent? If not, which single lever is dragging it down hardest?
Collective 54 is where boutique service firm founders go to make more money, scale with less friction, and build a firm worth buying.
See if it’s a fit →