The Benchmark

The Billable Number Was Wrong for Years. So Was the Margin.

Grants Plus set out to find the real margin on its client work. The problem turned out to be one step upstream: the formula it used to count billable time had been wrong for years.

Grants Plus, a professional grant seeking firm serving nonprofits, came into a working session with a specific complaint. The team could not see the true margin it was earning on client work, which meant pricing decisions and client-profitability calls were all resting on numbers nobody fully trusted.

The room pointed at the measurement rather than the effort. If billable time is misrepresented, everything built on top of it inherits the error. The firm had already reoriented its formula earlier this year, and COO Gail Dancy Heim described what the old one had been quietly producing.

On the corrected formula, the firm’s most billable people run at 84 percent, and those are the most junior staff. That ceiling is a deliberate choice: time is carved out for professional development and admin work on top of PTO, so nobody is expected to clear it.

The benchmark ladder they now measure against is not one firm-wide number. Senior people land somewhere around 50 to 60 percent billable, mid-level people 65 to 75, and junior people 80 to 90, because senior time is supposed to be absorbed by planning, overhead, and working on the business.

Why it matters to you.
Utilization is the input to gross margin, pricing confidence, and capacity planning. If the denominator is wrong, every decision downstream is wrong in the same direction, and you will not feel it until margin lands lighter than the model said it would. A firm can look fully booked and still be underpricing.
“We’ve been using the wrong formula for a long time, and couldn’t figure out how on earth somebody could be 83% billable with the way we were doing it before. They would have not been able to take PTO.”
Your one thing.
Pull your utilization report and check one thing: what is actually in the denominator? If PTO, admin, and professional development time are not accounted for, your billable percentage is not measuring what you think it is.

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