CRM best practices for service businesses

Sell a small number of services you can deliver well, price them from your cost per hour, and write every engagement down before it starts. Keep one record per client with the agreement, the work, the hours and the invoices together. Watch three numbers monthly: utilization, margin per client, and overdue invoices. Many agency problems come down to one of those three going unwatched.

Scale the process before the headcount. Write down how a client is onboarded, how work is scoped, how a change order is raised and how a retainer is billed, so a new hire can run an account without you. Then hire against utilization: when the team is above eighty percent for a quarter, add a person. Add clients in the services you already deliver well before adding services.

The arithmetic is short. Add a person's salary, employer taxes, benefits and a share of overhead for the year, then divide by the hours they will actually bill, not the hours they are at work. Add the profit margin you want. That is the rate. Our billable hours calculator does the utilization side of this sum and shows what a given rate earns at a given utilization.

Agency profit is revenue minus the cost of the people, minus direct expenses, minus overheads. Per client, leave the overheads out and use hours worked times cost per hour. The client profitability guide walks through the formula with a worked example, and the billable hours calculator gives the margin for one person or a team from four numbers.

With a change order. When a request falls outside the signed scope, say so in writing and send a one-page change order the same day: what is asked, what it costs, what it does to the timeline. Work starts after written approval, and the change order goes on the next invoice as its own line. The scope creep guide includes a change order template.