Financial Model

Built a financial model to introduce visibility into labor cost, project profitability, and capacity planning for a 3-person agency. The model became the foundation for pricing, hiring, and revenue decisions, enabling consistent 50% delivery margins and more predictable growth.

Context

In 2023, Brave Little Beast was a 3-person agency generating steady six-figure revenue with strong delivery processes, but no visibility into profitability, labor cost, or capacity.

We couldn’t answer basic questions like:

What does each employee actually cost per hour?
Are our projects profitable?
Which clients are most valuable?
What revenue is realistic for a team our size?

Operationally, we were organized. Economically, we were guessing.

Intervention

I built a cost-based financial model to introduce clarity into how the business actually operated. The model:

Calculated true hourly labor cost per employee (including overhead)
Defined break-even revenue requirements
Established a 50% delivery margin target
Modeled revenue potential based on utilization and team size
Simulated hiring scenarios to evaluate cost, capacity, and margin impact

In parallel, I audited overhead and identified inefficiencies across software, billing, and discretionary spend.

The full process took approximately two months, from analysis to rollout.

I built a cost-based financial model to introduce clarity into how the business actually operated. The model:

Calculated true hourly labor cost per employee (including overhead)
Defined break-even revenue requirements
Established a 50% delivery margin target
Modeled revenue potential based on utilization and team size
Simulated hiring scenarios to evaluate cost, capacity, and margin impact

In parallel, I audited overhead and identified inefficiencies across software, billing, and discretionary spend.

The full process took approximately two months, from analysis to rollout.

Results

For the first time, revenue planning was based on capacity and cost structure instead of intuition.

Established and maintained a consistent 50% delivery margin

Increased hourly project close rate ~20% after pricing adjustments

Eliminated negative-margin retainers through renegotiation

Want to work together?

Send me a message

adam@adamhayman.com

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