Professional services · two-minute check

What is one point of utilisation worth to your professional services business?

Put in the shape of your firm and get the two numbers every owner should know by heart: what a point of utilisation is worth in EBIT, and what one per cent on rate is worth. Then the grid around where you sit now.

Fee-earning staff 20 FTE

Full-time equivalents who record billable time. Capacity is 1,976 hours each (38-hour week).

Blended utilisation 65%

Billable hours ÷ capacity hours, across all fee-earners, trailing twelve months.

Realised rate $180/hr

Fees actually invoiced ÷ billable hours, after write-offs, not the card rate.

What the people cost

Average base salary

On-costs

Fee-earners only. On-costs are super, payroll tax, workers comp and leave loading: around 19% for most Australian firms.

Everything else

Overheads, per year

EBIT target (optional)

Overheads include rent, systems, insurance, and admin and management salaries. The EBIT target could be a covenant, the owners' draw, or the number you told the bank.

One point of utilisation

$71k

of EBIT a year

One per cent on rate

$46k

of EBIT a year

EBIT now

$566k

12.3% on $4.6M fees

Swipe sideways to see the whole grid.

Break-even

Same EBIT

Watch for

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A simple annual model: fees = FTE × 1,976 hours × utilisation × realised rate; EBIT = fees − fee-earner employment cost − overheads. No seasonality, no hires ramping, no write-off recovery; those belong in your budget, not a two-minute check. General information only, not financial advice. Steve Green, CA.