What does each of the three budgets actually produce?
Fee income is hours times realization times rate, which is the only equation a professional practice really has. This template saves three versions of those five assumptions and puts the results side by side, including the one where the cost base does not move.
Work Starter Scenarios free
After you install, this is the model to open.
Which of Three Budgets Should the Practice Plan On?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
Three cases, one table:
- Planned profit
- $77,980 on $833,980 of fees
- Stretch
- $147,820 on $989,820
- Conservative
- -$59,040 on $696,960
- Planned margin
- 9.35% 14.93% at stretch
Conservative is not a catastrophe on the way in: it is 500 fewer chargeable hours, four points of realization and five dollars off the rate, all of which are one bad quarter away. It turns a $78,000 profit into a $59,000 loss because the cost base did not move at all, and the middle row of the summary is where that becomes visible: fee income per chargeable hour available falls from $170.20 to $158.40 while the fixed costs carry on. That is the distance a single-line budget hides.
The model
Five assumptions and a practice. Each named case carries its own hours, realization, rate, staff cost and overhead, and the summary compares fee income, profit and margin.
| Chargeable hours available | 4,900 |
| Realization | 92% |
| Blended rate | $185 |
| Staff cost / overhead | $560,000 / $196,000 |
| Fees, profit and margin | calculated per case |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Is the biggest engagement worth the two it blocks?Which Engagements Should We Take?
- Is filling every billable hour the wrong plan?Where Should My Own Week Go?
- Is 32 hours a week a target or a wish?What Does a Typical Billable Week Look Like?
- Is your biggest client really your best one?Which Clients Are Actually Worth Keeping?
- What is the lowest rate that is not a subsidy?What Rate Do I Have to Charge?
- Which few tasks are eating the whole calendar?How Long Do Our Tasks Really Take?
Every model like this one, and the method behind them: What-if analysis in Google Sheets.