Scaling on Purpose: Metrics and Questions for Deliberate Growth

Growing a boutique professional services firm can feel like flying blind. You’re hiring more people and chasing more projects, but somehow it’s getting harder to see where all the effort is going. Many founders and members that I speak with admit they’ve been scaling without the clarity of hard data or many measurable metrics. Here’s one for you.. I won’t name names but I spoke with a founder this month doing $24M in revenue that asked me what EBITDA meant.

Revenue might be climbing, yet profits stay flat, the team gets bigger, but efficiency stalls. If you’ve ever felt that knot in your stomach wondering, “Are we actually getting ahead or just getting busier?”, you’re not alone. The good news is there’s a cure for this chaos. By tracking a handful of key metrics and asking yourself the right questions, you can transform scaling from a hopeful gamble into a repeatable, strategic process.

Key Metrics for Intentional Scaling

We have a saying here at Collective 54 that members reading this will be familiar with – “What gets measured gets managed”.

Here are a few to get started.

1. Revenue per Employee (RPE): This metric tells you how much revenue each team member generates on average. It’s a simple ratio, annual revenue divided by number of employees. That reveals your firm’s productivity and leverage. High RPE means you’re getting strong output per person (often a sign of efficient operations or premium pricing), low RPE could signal underpricing, overstaffing, or other inefficiencies. As a benchmark, top boutique firms often target around $300K–$400K in revenue per billable employee. In Collective 54’s experience, a good rule of thumb is to “shoot for $400K per head”.

2. Utilization Rate: Utilization measures the percentage of your team’s available hours that are spent on billable work (as opposed to non-billable or downtime). It’s an efficiency metric for any professional services firm. Essentially, how much of your team’s capacity is being used productively. Industry benchmarks vary by seniority: for example, senior staff might be targeted at ~65–70% utilization, mid-level at 70–80%, and junior consultants even higher (90%+). If you’re significantly below those ranges, you may have people “on the bench” too often or processes that hinder billable work. If you’re far above those ranges, beware of burnout and declining quality. The goal is a healthy balance. One Collective 54 member put it simply: “Every hour we pay for needs to be purposeful, either serving clients or building capability.”

3. Gross Margin: Gross margin is the percentage of revenue left after accounting for the direct costs of delivering your services (typically, your cost of labor for billable staff, plus any project-related expenses). So, 50% gross margin means if you bill $1, you spend about $0.50 on direct costs and retain $0.50 in gross profit. Best-in-class boutiques are around 70–75% gross margin on projects with corresponding healthy EBITDA margins of 40–50%. If your gross margin is lagging (say 30–40%), you’re likely bleeding money in delivery inefficiencies, discounting too heavily, or over-investing in project staff. Track gross margin overall and by project – it’s a window into execution efficiency.

4. Client Concentration: This metric looks at how your revenue is distributed across your client base. Specifically, what portion of your business is tied up in your largest clients. It’s common to express it as a percentage (“Our top client is 25% of revenue, top three clients are 60%,” etc.). Why does this matter? Because a heavy reliance on one or two clients is risky and can hinder an exit from happening. If any single client represents more than ~15-20% of your revenue, your firm has a vulnerability: losing that client could seriously threaten your stability. We often call client concentration the “silent killer”. Investors often get nervous when any client exceeds 10% of revenue, and many small firms routinely see their top 3 clients making up 50% or more. Diversify your client base proactively. If you calculate your client concentration and find a single client dominating your revenue, make it a strategic priority to land new clients and spread out that risk.

5. Pipeline Coverage Ratio: Scaling isn’t just about delivering today’s work efficiently, it’s also about tomorrow’s revenue. This is where your sales pipeline comes in. Pipeline coverage is a forward looking metric that compares the total value of opportunities in your sales pipeline to your upcoming revenue target for a given period. For example, if your goal is to win $1M in new projects next quarter, do you have $3M (or $5M) worth of deals in the pipeline now? This ratio (pipeline value / target) tells you. A common rule of thumb is to maintain 3x–4x pipeline coverage of your sales targets. Why so high? Because not every deal in the pipeline will close. A 3x buffer accounts for an average win rate around 30%, which is typical in many firms. If your pipeline coverage is, say, only 1x or 2x, you’re likely to come up short on new revenue.

Key Questions for Intentional Scaling

Successful firms have leaders that are always one step ahead and they get there by asking the right questions of themselves, the team and their data.

1. “Is our team working on the right things?” – It’s easy to be busy, it’s harder to be productive on what matters. This question forces you to examine how your team’s time is allocated. Are your consultants spending the majority of their week on high-value, billable client work, or are they bogged down by internal meetings and low-impact tasks? Are your business development people focusing on qualified leads or spinning wheels on long shot opportunities? Essentially, is everyone’s effort aligned with the firm’s growth strategy? If the answer is “not sure,” dive into your utilization data and project plans. Better yet.. does everyone know the firm’s growth strategy?

2. “Where are we bleeding money?” – This gets to the heart of operational efficiency. Even if revenue is growing, you might have profit leaks that prevent you from scaling profitably. Examine your gross margin and project financials: Are certain projects consistently underearning due to scope creep or write-downs? Is there an overhead expense (fancy office space, underutilized software subscriptions, excessive travel) that isn’t pulling its weight? How about your staffing, do you have highly paid seniors doing work a junior could do at a lower cost? As a founder, you should regularly hunt for cost overruns and margin killers. Find the bleeding and patch it.

3. “What if we lost our biggest client tomorrow?” – This is the scary scenario no one wants to think about, but you must. It directly ties to client concentration risk. If you ask this question and the honest answer is “We’d be in serious trouble,” then you know you have an over-reliance issue. Get on it.

4. “Do we have enough pipeline to hit our future targets?” – This question should be a regular agenda item in your leadership meetings. It shifts focus from present success to future readiness. Look ahead 6–12 months: if you want to grow 20% next year, do you right now have sufficient leads and prospects to make that happen? If not, waiting until sales dry up to panic is too late.

5. “Are we pricing our services for value and profit?” – Often, boutique firms in growth mode underprice themselves, thinking it will win more business. But scaling with thin margins is a dead-end road. Regularly ask if your pricing reflects the value you deliver and the costs of scaling. If your revenue per employee is lower than peers, it might be a sign you’re leaving money on the table. Ask yourself, “If we doubled our prices, would we lose clients? If not, we’re probably too cheap.” While doubling might be extreme, the point is to ensure you aren’t undervaluing your firm.

6. “Can our systems and processes handle double the work?” – Imagine your firm suddenly has twice the clients or projects – would things break? Think about your project management process, quality controls, knowledge sharing, IT systems, and even cultural norms. Often, what works for a 20-person firm falls apart at 50 people. Founders who scale on purpose invest in infrastructure before it’s at a crisis point. Ask: Do we have the right project management tools and documented processes so that adding new team members doesn’t degrade quality or efficiency? Is our hiring and onboarding process strong enough to absorb a batch of new employees quickly? Are we proactively training a second layer of leadership, so decision-making doesn’t bottleneck at the founder for every little thing? The goal is to scale smoothly, not scramble.

Scale on Purpose, Not by Accident

It’s tempting to think growth is automatically good. Add a few clients, hire a few people and repeat. But uncontrolled growth can be just as dangerous as no growth. When you scale on purpose, you’re steering the ship with a clear dashboard (your metrics) and a sharp radar (your strategic questions). You know where you’re headed and you’re ready for the waves. When you scale by accident, you’re essentially sailing blind in stormy waters, you might get to the destination, or you might capsize on the way.

Here is the takeaway – Don’t let growth just “happen” to you. Plan it, measure it, and drive it.