Day 2

Module 1 | Focus: Revenue, margin, and effective rate analysis

Summary

Today we dive into the financial reality of your agency. You'll calculate your true effective hourly rate across project types, identify your profit margins by service line, and establish financial benchmarks. Many designers discover they're earning less than they would as employees when all hours are counted honestly.

Key Lesson

Your effective rate is the single most important financial metric for a design agency. If you charge $5,000 for a logo but spend 80 hours on it, your effective rate is $62.50/hour. That's employee territory, not agency owner territory.

Action Steps

1. Calculate total revenue for the past 12 months and monthly average
2. For each of your last 10 projects, divide fee by total hours invested (including revisions, admin, and client communication)
3. Calculate your effective hourly rate for logo projects, identity systems, and packaging separately
4. Determine your gross profit margin (revenue minus direct costs like subcontractors and software)
5. Identify which project type has your highest and lowest effective rate

Revenue Connection

Once you know your effective rates, you can either raise prices on low-margin services or stop offering them entirely. Agencies that focus only on high-effective-rate work double their income without working more hours.

Clozo Academy Proprietary Curriculum — The Design Agency Growth System