Charles Leikauf, a fractional CFO, explains the first lever for doubling service business profits: utilization. At least 80% of staff time should go to revenue-generating client work, with the remaining 20% for admin tasks. Below 80% signals tracking problems or unclear expectations.
If you're a fractional CFO and you wanna optimize service-based businesses financially, there's really 3 main things that you can do. Hi, my name's Charles Leikauf and I've helped hundreds of people start, grow, and scale a fractional CFO offer. I've also been a fractional CFO for over 100 different e-commerce clients. I'm gonna show you here 3 keys that you need to do. So the first key to optimizing the service-based business is something called utilization. When you think about a service-based business, what typically what they are is you have people applying hours to a client or a project. What I want to do is I want to have the hours that attribute to that project. If I I have a marketing staff member that helps them. I want 80% of her time to be focused on results and things that drive revenue, right? For us and for the client. 20% of her time is going to be spent on administrative things. If you don't have an 80% or above utilization rate, meaning 80% of your time isn't towards revenue generating tasks, you need to change the focus of what they do. If your utilization rate is under 80%, usually one of two issues. Either you have a tracking issue with your hours or you have an issue with how you communicate to the staff member.
