“Fees per professional” is a crucial metric for professional services firms, measuring the revenue generated by each full-time equivalent (FTE) employee. This KPI directly impacts profitability and operational efficiency.
Why it’s important:
🔹 Indicates service quality and project costs
🔹 Reflects the perceived value of your services
🔹 Influences financial success and growth potential
For UK small business owners:
🔹 Aim for £140,000-£160,000 per FTE for good performance
🔹 £175,000-£200,000 per FTE is considered elite
Factors within your control:
🔹 Setting appropriate rates based on costs, market conditions, and value provided
🔹 Optimising staff structure, mix and efficiency
🔹 Improving billing practices and work acquisition
Factors with limited control:
🔹 Market demand and competition
🔹 Economic conditions affecting client budgets
Remember, while you can influence this metric through strategic decisions, external factors also play a significant role. Regularly review and adjust your approach to maximize your firm’s performance and profitability.
Do you need any help with calculating and reviewing your real-time metrics?