Let's Get Serious About Non-Billable Hours
Here's a question I bet has crossed your mind: Why don't we give our agency the same love we give to clients?
The simple answer? Your agency does not reward non-billable activities. Think about it—you’ve got billable time down to a science. From knocking out client deliverables to sending off invoices, you're a well-oiled machine. But when it comes to non-billable activities like professional development, marketing your own agency, or networking at conferences, things get messy.
Time for a Mindset Shift
Let's ditch the "billable vs. non-billable" thinking. Instead, let's view it as three new categories:
Income time (that's your client work)
Investment time (the stuff that helps you reach long-term goals)
Admin time (all the necessary evils like internal meetings and emails)
See what I did there? I reframed "non-billable" as "investment." Because that's exactly what it is - an investment in your agency's future.
The Origination Credits Trap
Origination credits is a term used in law firms to describe the rewards or credit given to a lawyer who originates new business i.e. brings in new clients to a firm. Many agencies fall into this origination credit trap by creating a culture that worships billable hours and new client wins. Your pitch team brings in a new client? Pop the champagne! But when your account manager scores more work from an existing client? Maybe they get a quick shout-out at the next meeting.
This sends a loud and clear message: Only work that directly leads to new business is valuable. Everything else? Meh.
Calculating Investment Time
Time for a quick math exercise (I promise it's painless):
Let's say your agency bills 60% of its time. That leaves 40% for non-billable work.
With 2,000 annual working hours per person, you've got 1,200 billable hours and 800 non-billable hours.
Now, let's allocate 25% of those non-billable hours (200 hours annually) to investment activities.
For a five-person agency, this amounts to 1,000 investment hours per year. I'll write it again, that's 1,000 investment hours per year. Think of all you could achieve if you invested 1,000 hours into your business.
To use this time wisely, consider implementing a system of quarterly projects. Set 90-day timelines for specific growth initiatives, with each team member investing an agreed-upon number of hours per quarter. This keeps your internal projects on track without overwhelming your schedule.
Benefits of Focusing on Non-Billable Hours
Many of you often shy away from internal projects, fearing it will cut into billable time. But there’s always time—you just need to invest it wisely. Here's why it's worth it:
Your client service will improve. Better-trained staff and smoother processes = happier clients.
Your agency will grow. New services and improved operations can boost your top and bottom line.
You'll innovate. Dedicated thinking time can spark ideas that set you apart from the competition.
Key Takeaway
Your internal agency goals keep slipping through the cracks because you don't have a process for achieving them. You've got client work down to a science - now it's time to do the same for your investment time.