Most agency owners can answer two questions about their business numbers: how much revenue did we close last month, and how much cash is in the bank. Beyond those two, the answers get vague. Gross margin? "Maybe 35 percent? I'd have to ask the bookkeeper." Pipeline coverage ratio? "We have a healthy pipeline, I think." Customer concentration? "Our biggest client is something like 30 percent? Or maybe 40."

Vague answers are the early warning sign of an agency in trouble. Owners who can't recite the core operating numbers aren't running the agency. The agency is running them. The numbers are knowable, the numbers are stable enough to memorize, and the owners who memorize them spot problems three to six months before the owners who don't.

This is the list of 12 numbers worth memorizing, what each one tells you, and the monthly cadence that makes the list useful instead of overwhelming.

Tim's Take: Most agencies drive at night with the headlights off. Then they're surprised when they hit something.

Why Most Agency Dashboards Miss the Point

Agencies usually have one of three dashboard problems.

Too many metrics. The dashboard has 50 numbers across multiple tabs, refreshed weekly, reviewed by nobody. The owner glances at it, can't process the volume, and goes back to running the business from gut.

Wrong metrics. The dashboard tracks vanity numbers (website traffic, social followers, pipeline volume) instead of operational truth (cash buffer, gross margin, pipeline coverage). The numbers move and the business doesn't.

Lagging metrics only. The dashboard reports last quarter's revenue and last month's expenses. The numbers describe history. They don't predict the next decision.

The 12-number version below fixes all three. There's a small enough set to memorize. The metrics are operational, not vanity. The mix includes both lagging (what happened) and leading (what's about to happen) indicators.

The 4 Revenue Numbers

These four tell you whether the agency is growing or shrinking and how predictable the growth is.

1. Total Revenue - TTM (trailing 12 months)

The straightforward top-line number. Use trailing 12 months instead of calendar year to smooth out seasonality and give you a moving picture. Compare each month against the same month last year.

The number to know: Your TTM revenue and the year-over-year growth rate. If both are growing, fine. If revenue is growing but the growth rate is decelerating, you're heading toward a plateau. If revenue is flat or declining, you're already in one.

2. Recurring Revenue %

What share of monthly revenue is retainer or subscription versus project work. Retainer-heavy agencies have predictability. Project-heavy agencies live and die on the close rate of next month's pitches.

The number to know: Percent recurring, and the trend over six months. A healthy mid-sized agency typically runs 50-80 percent recurring. Below 30 percent is volatile. Above 90 percent is durable but slow-growing.

3. Customer Concentration

What percent of revenue comes from your top client, your top three clients, and your top ten clients. Concentration is the silent killer of agencies. A 35 percent top-client share means losing one client cuts revenue by more than a third overnight.

The number to know: Top-1 share, top-3 share, top-10 share. The healthy ranges are roughly 15 percent or less for top-1, 35 percent or less for top-3, and 65 percent or less for top-10. Anything above these signals concentration risk.

4. Revenue per FTE

Annual revenue divided by full-time equivalent headcount. This is the productivity number. It tells you whether the business is leveraged or labor-heavy.

The number to know: Revenue per FTE, and the trend. Healthy agencies run $250K-$800K per FTE depending on the model. A declining trend means the team is growing faster than revenue, which is the early signal of margin trouble.

The 3 Profit Numbers

These three tell you whether the agency is making money, not just generating revenue.

1. Gross Margin on Services

Service revenue minus the direct cost of delivering that revenue (delivery team salaries, contractors, direct project costs), expressed as a percentage. This is the most important number on the entire dashboard. It tells you whether the work is profitable before overhead.

The number to know: Gross margin percent, monthly and quarterly trends. A healthy agency runs 40-55 percent gross margin on services. Below 30 percent and the business doesn't have enough room to absorb overhead and growth investment. Above 60 percent and you're either underpaying the team or running a productized model.

2. EBITDA Margin

Earnings before interest, taxes, depreciation, and amortization, expressed as a percent of revenue. This is the profit number after overhead is accounted for.

The number to know: EBITDA margin percent, with monthly trend. A healthy agency runs 15-25 percent EBITDA margin. Below 10 percent means there's no buffer for growth investment or surprises. Above 30 percent means you're underinvesting in the business or accidentally throttling growth.

3. Owner Compensation as % of revenue

What the founder pays themselves (salary plus distributions) as a percent of revenue. Most agency owners under-pay themselves in the early years and over-pay themselves in the middle years.

The number to know: Owner comp percent, and your honest assessment of whether the number is sustainable. If owner comp is above 25 percent of revenue, the agency is essentially a job and the math limits growth. If it's below 8 percent and the agency is past $1M, you're undervaluing yourself.

The 3 Pipeline Numbers

These three tell you whether the next quarter's revenue is at risk.

1. Pipeline Coverage Ratio

The total dollar value of active pipeline divided by your quarterly new-revenue target. A coverage ratio of 3x means you have three times your target in active pipeline.

The number to know: Current quarter coverage. A healthy agency runs 3-5x coverage. Below 2x and the quarter is at risk. Above 6x and the pipeline is bloated with deals that won't close.

9. Average Sales Cycle Length

Days from first qualified conversation to signed agreement, averaged across the last 12 months of closed-won deals. Length tells you the friction in the sales process and the buying complexity in your market.

The number to know: Average days, and the trend. Lengthening cycles signal either positioning weakness, buyer pessimism, or sales-process bloat. Shortening cycles signal momentum.

10. Close Rate on Qualified Pipeline

Percent of qualified opportunities (the ones that passed initial discovery) that convert to closed-won. This is the cleanest measure of sales effectiveness.

The number to know: Close rate percent, monthly. Healthy agencies run 25-45 percent close rates on qualified pipeline. Below 20 percent means either qualification is too loose or the pitch is broken. Above 50 percent means qualification is too tight and you're missing winnable deals.

The 2 Team Numbers

These two tell you whether the team can support the business.

1. Utilization Rate (billable team)

Percent of available billable hours that are actually billed to clients. This is the team productivity number for service businesses.

The number to know: Utilization percent across the billable team. Healthy targets run 65-80 percent. Above 85 percent and the team is burning out. Below 60 percent and you have bench expense without revenue.

2. Voluntary Turnover, TTM

Number of employees who voluntarily left in the last 12 months divided by average headcount. Turnover is the leading indicator of cultural and operational problems.

The number to know: Voluntary turnover percent. Healthy agencies run 5-15 percent. Above 20 percent and something's broken. The departures usually start in delivery and migrate up the org chart over 12 months.

The Monthly Review

The 12 numbers only work if they're reviewed consistently. The cadence that works for most agencies is:

First Tuesday of every month, 90 minutes. Owner plus head of finance (or bookkeeper) plus head of operations review the numbers together.

Format: Pull the numbers for the month that just closed plus the trailing 12-month trend. Spend 5 minutes per number on what changed and why. Don't try to solve problems in the review. The review is for diagnosis. Action items go on a separate list.

Decision rule: If a number moves more than 10 percent in either direction month-over-month, or breaks a threshold (gross margin below 40 percent, pipeline coverage below 2x, voluntary turnover above 20 percent), it gets named as a flag and assigned to someone for deeper analysis.

The cadence is more important than the metric set. An agency that reviews 12 numbers monthly will outperform an agency that reviews 30 numbers quarterly. The frequency is what produces early detection.

Get Moving

If you can't recite at least 8 of the 12 numbers right now, schedule 30 minutes with your finance person this week and pull them. Memorize them. Carry them in your head.

If you have the numbers but no monthly review cadence, set the cadence this month. The cadence is the difference between numbers that tell you the truth and numbers that gather dust.

For the broader operational health framework, see The WTF Agency Assessment. For the cash flow and billing system that protects the profit numbers above, see The Agency Cash Flow Playbook.