The agency utilisation rate that breaks vs. compounds

Utilisation is the metric agency founders track too late. By the time it's a number on a dashboard, the team is already either bored (low utilisation) or quitting (high utilisation). This walkthrough is how to track it before either of those happens, and the lever that pulls a tired agency out of high-utilisation hell without hiring.

The number

Utilisation = billable hours / total available hours per week. Available = ~38 working hours after meetings, admin, and PTO. So 30 billable hours/week = 78% utilisation against 38, or 60% against a 50-hour week (which is the right denominator if your team is actually working 50).

The bands

• <50% utilisation — gross margin is bleeding. Either you've sold less work than the team's capacity (sales problem) or you've over-staffed the work you have (planning problem). At <40% sustained, the agency is unprofitable. Most early agencies live here for a while and don't realise it.
• 50-60% — concerning but workable. You have slack to learn, write, or sell internally. Treat this as either an investment phase or a leading indicator that you need to sell more work.
• 60-75% — the healthy band. Team is busy but not burning. Margin compounds at this level.
• 75-85% — productive but fragile. One sick week derails projects. Senior people are doing junior work because everyone is full.
• >85% sustained — danger zone. People are working more than 50 hours. Quality slips invisibly. Attrition follows within 6 months. This is the band where founders feel like the business is humming and don't realise people are about to quit.

Track it weekly per person, not monthly aggregate

The aggregate hides the senior person stuck on internal projects (low individual utilisation) while juniors are at 95%. Per-person weekly utilisation surfaces the imbalance fast.

A Notion database with one row per person per week, two columns (billable hours, total hours), and a computed % column is enough. Don't buy software for this until you have 15+ billable team members.