Benchmarking and Best Practice - Utilization Rates
337
Business > Small Business
Mar 1, 2007
Joshua Feinberg
Benchmarking and Best Practice - Utilization Rates
Benchmarking and best practice is a way for you to measure your success against others who have made the leap into computer consulting before you. By measuring your own performance against industry benchmarks you get an idea of what you need to work on to be successful.
A key element in your benchmarking and best practice is to look at utilization rates. Your utilization rate is the ratio of how many hours you bill clients compared to how many hours you work in a given period.
Utilization Rate = Hours Billed / Hours Worked
The typical benchmarking and best practice comparison is based on a 40 hour work week. If you work 40 hours in a week but only work with clients for 10 billable hours, your utilization rate is 25%.
Utilization Rate Benchmarks
Benchmarking and best practice in the computer consulting industry suggests using a utilization rate of 50% as a minimum tolerance level. This may not be realistic for the first few months of start-up though. What you want to monitor is whether your utilization rate is showing an upward trend toward the benchmarking and best practice standard.
A 50% utilization rate is a good place to be within six to nine months of launching your business. By the time your business matures, a utilization rate of 75% (30 billable hours per week) is a benchmarking and best practice ideal. Once you get higher than that your quality of life begins to suffer. The huge invoice payments coming in are great but the resulting burnout and stress are not worth it.
The Bottom Line on Benchmarking and Best Practice Utilization Rates
It is important to measure your performance against others in the industry. A benchmarking and best practice comparison, particularly with utilization rates, is a great place to start. Your ideal rate will vary depending on the phase your business is in, but remaining within the benchmarking and best practices range is a good indicator of sustainable business operations.
Copyright MMI-MMVI, PC Support Tips .com. All Worldwide Rights Reserved. {Attention Publishers: Live hyperlink in author resource box required for copyright compliance} Joshua Feinberg helps independent PC Support professionals get more steady, high-paying PC support clients. Learn how you can get more monthly recurring PC Support revenue with Joshua's free training recording now at www.PCSupportTips.com
A key element in your benchmarking and best practice is to look at utilization rates. Your utilization rate is the ratio of how many hours you bill clients compared to how many hours you work in a given period.
Utilization Rate = Hours Billed / Hours Worked
The typical benchmarking and best practice comparison is based on a 40 hour work week. If you work 40 hours in a week but only work with clients for 10 billable hours, your utilization rate is 25%.
Utilization Rate Benchmarks
Benchmarking and best practice in the computer consulting industry suggests using a utilization rate of 50% as a minimum tolerance level. This may not be realistic for the first few months of start-up though. What you want to monitor is whether your utilization rate is showing an upward trend toward the benchmarking and best practice standard.
A 50% utilization rate is a good place to be within six to nine months of launching your business. By the time your business matures, a utilization rate of 75% (30 billable hours per week) is a benchmarking and best practice ideal. Once you get higher than that your quality of life begins to suffer. The huge invoice payments coming in are great but the resulting burnout and stress are not worth it.
The Bottom Line on Benchmarking and Best Practice Utilization Rates
It is important to measure your performance against others in the industry. A benchmarking and best practice comparison, particularly with utilization rates, is a great place to start. Your ideal rate will vary depending on the phase your business is in, but remaining within the benchmarking and best practices range is a good indicator of sustainable business operations.
Copyright MMI-MMVI, PC Support Tips .com. All Worldwide Rights Reserved. {Attention Publishers: Live hyperlink in author resource box required for copyright compliance} Joshua Feinberg helps independent PC Support professionals get more steady, high-paying PC support clients. Learn how you can get more monthly recurring PC Support revenue with Joshua's free training recording now at www.PCSupportTips.com
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
New computer technology comes out continuously. As a computer consultant you probably want to keep up with all the new computer technology that comes along. You're most likely in love with technology - always looking for a new intrusion protection
Category:
In running an IT consulting business, do not be too quick to give new clients credit. Even when you give them credit, keep their lines of credit relatively low until they?ve built up some history with you. Provide Low Lines of Credit
Category:
It is very important to educate your small business prospects and clients on key small business networking terms and buzzwords. After all, in order to win them over, you need to be speaking the same language. In fact, you may even want to prepare a
Category:
PC-based servers and LANs may be relatively mature technologies. However, small businesses need your firm?s expertise, more than ever. For these businesses, you'll need to select, configure, customize, secure and maintain the right small business
Category:
Securing moonlighting jobs s computer consultnt for smll businesses is difficult becuse you're typiclly working when the smll businesses re closed. You need the flexibility to crry out your moonlighting jobs during the evening nd on weekends
Category:
Business support systems are critical to your business success. The most important business support system is your family. The al relationship is particularly key to your ability to launch and operate a successful business. If your
Category:
By engaging small business decision makers in discussions about their IT networking needs, you can highlight how automating services like faxing will ve your prospect?s or client?s company on manual labor, which indirectly translates into substantial
Category:
Many small businesses mistakenly think that they?re too small to cost-justify a "real" client/server small business network. However, because small businesses want, and in most cases, need, the same technology tools as their larger competitors,
Category:
Work scheduling is one of the most time consuming aspects of a consulting business. First you have the issue of work scheduling that goes into your evenings and weekends and then you have to juggle which clients to schedule when and for how long.
Category:
After you hae learned to explain the concept of a "real" network to small business prospects and clients, you can look into the endors out there proiding small business serer suites (both client/serer and Web-based). The following is a listing of
Category:
In the computer consulting busiss, risk-averse small busiss owrs are very similar to small busisses that are apathetic about moving forward with your proposed small busiss twork. Apathetic small busiss owrs know they have a
Category:
When targeting small businesses that are in the sweet spot size, what IT certifications do you typically need? One thing to keep in mind is that you are not selling to a real IT manager in most cases. Remember Who You Are Selling Your
Category:
When you begin talking about a small business networking upgrades, prospects and clients will often dwell on cost. They neglect to consider the soft costs of not properly investing in a network, such as lost employee productivity when imprudent corners
Category:
In the computer consulting business, dead-end solutions can be very expensive mistakes for your prospects or clients. So, start by pointing out how scalable your proposed network will be. Communicate the Options Discuss server
Category:
When starting an IT consulting business, should you already have partnerships established with other companies to provide services that you don?t? The whole problem with running an IT consulting business is that you d to be able to satisfy a lot of
Category:
If you sense resistance during the IT network sales cycle, listen very carefully to the prospect's objections. Many times, they like what they hear, but small business owners need to hear three or four different opinions in order to bolster their
Category:
In dealing with apathy toward small business networking, discontinued technical support is another powerful counterforce, especially when you?re talking about vertical, industry-specific software, such as niche applications designed for accountants,
Category:
Credit terms and policies for extending credit to customers requires a tight balancing act. You need to watch out for your money and tect your cash flow. You also want your services to be attractive to clients. By following a few simple rules about
Category:
Small Busess Server 2003 is an excellent choice for your computer consultg busess. It is sold as a suite so you get a lot of great features. And Small Busess Server 2003 is designed strictly with the needs of small busess computer consultants
Category:
Small business netorking is absolutely critical to your business success. As a computer consultant you are in the professional services business. This industry is all about relationships and relationships are built through netorking. You
Category:
Other links at Business > Small Business
The following article covers a topic of work-from-home that has recently moved to cenr stage--at least it seems that way. If you've been thinking you need to know more about it, here's your opportunity. With the advent of information
Category:
Corporate credit i one of the thing that help make the buine world go round. It allow the free exchange of good and ervice without having to wait until the money i actually in the bank in order to deliver or receive the good and ervice of
Category:
Most small business owners are not aware that they or an employee may be breaking the regarding spam. The advice that follows is intended to help you avoid any financial or legal consequences. The CAN-SPAM Act of 2003 was signed into
Category:
How do you cope with the ?millions? of tasks en running a Micro or Home based business (HBB), especially if you work on your own (or maybe have occasional assistance) and still have time for yourself and/or your family? How do you know
Category:
When working in small business consulting, your clients may ask, "Why do I need something as big and powerful as the network you?re recommending? We?re just a seven person company and our network works great, at least most of the
Category:
Site Sponsor
Directory Statistics
Articles: 68228
Categories: 501
Yahoo Entertainment
