I recently collected the most frequently asked questions from new entrants. There was a big difference. I was surprised to see that this was so intense and that there were hardly any resources on the internet. Question:

What budget does an agency or freelancer give? 

I asked the freelancers and agencies around me the same question, what were they budgeting for? Most of the answers I received shocked me. What I need at the end of the month depends on the brand, the amount that the other person will accept or even will not accept it o I got interesting answers from each other.

Then I asked the same question to companies. What do you evaluate the offers received by you. The answers I got from that side are the festivities to the houses. Whichever is the cheapest, the most promising for the least, the more employees he has onu

In short, there are only a few agencies work conducted in Turkey in the framework of a consistent formula. So what is this consistent formula? The explanation will be a bit long, but I must say from the beginning, if you don't budget through this or similar formula, you're either making too much exorbitant prices or seriously damaging.

Let's go by sampling. We have a company with 5 employees.

Employees and net salaries:

  1. Employee - 7500TL
  2. Employee - 5000TL
  3. Employee - 2020TL
  4. Employee - 2020TL
  5. Employee - 2500TL

Now let's see how many hours these employees have per month. They have to work 45 hours a week. So 45x4x5 = 900 hours. We have to pay our salaries and manage our expenses within the 900 hours we have with our employees, every month.

After this point, the methods are divided into two. Different man / hour wages can also be calculated per employee, and the average of all. I'll go for the average of all for convenience.

The salary a company pays to an employee is gross, not net. Let our employees be single and childless in our sample. Now let's calculate the gross salaries of the employees;

  1. Employees - 12.326TL
  2. Employees - 8217TL
  3. Employees - 3320TL
  4. Employees - 3320TL
  5. Employees - 3500TL

In fact you can multiply your net salary by 1.65 as a short way. Within this 1.65 ratio;

  • Minimum subsistence allowance
  • Unemployment worker
  • Monthly income tax
  • SSI
  • Stamp duty

There are a few more variables here, but you can solve that with your financial advisor. There can be tons of variable depending on the incentives you receive, discounts or the amount of salaries.

30.638TL The amount you need to pay each month in a fixed amount to pay the salary of 5 employees. So if we calculate the salary of an employee, let's divide the sum by five: 6136TL You know, my employee has more stereotypes than I've paid him, right? Expenses are just starting, if you earn 28 thousand TL per month you will not see the next month. Lets continue.

Suppose the office is located on a tiny plaza floor in Maslak / Levent, Istanbul.

Rent: 4000TL
Dues: 750TL
Withholding: 1000TL

These people will eat from restaurants around Maslak / Levent, I do not think they can sit in that area with salaries. There will be a road expense. Don't use a taxi.

Path: 200TLx5
Food: 450TLx5

They also need fixtures in their offices. Furniture depreciation lives 5 years, 4 years on computers, 3 years on mobile phones.

Office table: 400TLx5
Office chair: 200TLx5
Air Conditioner: 2000TL
Small kitchenware: 1000TL
Coffee machine and kettle: 600TL

Mobile Phone: 4000TLx2
Computer: 5000TLx5

No painting on the walls, no clock. A naked office. Additional monitors, mice, etc. Not take.

Monthly consumption of tea, coffee, cookies and stationery: 600TL

Electricity, water, gas, internet and telephone: 1500TL

Accounting: 4000TL

Salary + Rent + Meal + Road + Asset + Consumption + Invoice + Accounting

30,683TL + 5750TL + 3250TL + (6600TL / 5/12 + 8000TL / 3/12 + 25000TL / 4/12) + 600TL + 1500TL + 4000TL

46.636TL In fact, our agency could not earn 45 thousand TL each month according to this planning is still at a loss. But it's not over. We have not yet come to taxation and profitability. This is actually a fixed expense when the business doesn't win anything. Things get even better when you start making money. Considering that this company works with a 20% profitability rate;

(46.636TL x 1.20) x 1.25 = 69.954TL. That second 1,25, let me introduce, income tax. In fact, this agency is not calculated costs, all of which are already sold at the dollar rate without using additional tools 69.954TL + VAT sales situation can not capture a bad situation. So, how to do budgeting? Let's go back to our first calculation. We have 900 hours in working hours. In other words, these employees should earn 78TL in 1 hour. Of course, as I said, we kept junior and senior in order to simplify this calculation.

Now, how to make a simple proposal? For example, you are preparing a social media management proposal. How many hours will this team spend on a month?

  • Content design and texts - 8 hours
  • Publishing and Moderation - 3 hours
  • Reporting - 4 hours
  • Meeting - 5 hours (including time spent on the road)
  • Project management - 4 hours (Phone calls, mailings)

Actually, we have 24 hours. 24 hours is 1865TL + VAT.

So far the calculation is completely insensitive, a calculation in the engineer minds. When we switch to the Turkish type of working system, we witness that the 24-hour work cannot be completed in 72 hours. At this point, the answer to the question of how to distinguish between profit-making companies and loss-making companies is struck with all our sincerity. If the employees complete the 24-hour work in 29 hours, we will lose it. So, according to this calculation, if all this work is done correctly, what does this agency gain? Monthly total turnover is 70 thousand TL. With 20% profitability, it puts 14 thousand TL in its pocket.

For those of you who know this calculation method, this is quite a sketchy and accurate calculation method, but it is quite confusing for first-time hearers. This is the general explanation for the complaints like “Why doesn't our agency send us to Crystal Apple ya? Those who are interested in the input and output of the business are aware that the remaining 14 thousand TL will not actually remain. Or that all 900 hours cannot be filled. Or that it can't be filled even if it's filled. That is why 20% profitability rate is far from realism in such scenarios. This happens because 5 employees manage the social media accounts of 37 different brands.

Especially in the advertising sector, the biggest and most effective resource of the business is human resources. If the turnover rate is high in human resources, this cost calculation turns into a total chaos.

What should he do to get rid of this chaos? 

Intelligent time management

At first glance, a working time of 900 hours doesn't sound like much. Each of these 900 hours needs to be evaluated correctly. To follow this, it is absolutely necessary to use a project management tool and to analyze how hours employees evaluate. The case here is not to measure how many minutes you have to go to the toilet or count cigarette breaks! It is about analyzing the right job for the right person, measuring who has a lack of knowledge or talent and being able to close these gaps. The tools I can offer to follow this well; Basecamp Restaurant Reviews, Jira

Smart customer relationship management

At a time when the word "digital transformation" flies in the air, we still entrust the relationship with the customer to the MTs, and when they quit, everyone is running like a chopped chicken at the agency. You should definitely use a tool to vary according to the number of customers. At the same time, the tools you need to use may vary depending on the differences in your sales strategy. However, you should use a CRM tool where you can analyze and analyze which employees are meeting with whom and when, what projects are in which process, where your proposals are at which stage, why they are accepted or not. If you have an accounting program, you can use local solutions such as Teamgram that can work integrated with it, and you can turn to tools like Zoho CRM if your needs in integrations are more global. If you have a high number of customers and offers, using Hubspot or Salesforce seems to be a must now.

Employer Branding

The employer brand is not a trend, but a permanent one that we will discuss for the next decades. As you can see in the cost account, the highest cost is the cost of the employees. The loss of these employees, especially trained employees, is a huge loss for a company. Because one of the values we do not take into account is the process of learning the job of the new employee. If our 5th employee is a new employee, processes such as orienting to the company and learning the job can take up to 6 months. That's 132 hours. In fact, we may even have to deduct 132 hours from that employee. The loss of an invested employee at the end of the 6th month means a loss of more than 20 thousand TL.

Meanwhile, I will announce a surprise about Employer Branding very soon. Subscribe to my e-mail newsletter to follow closely 🙂

Sales and Marketing Process

Perhaps one of the biggest items that are not added to the costs here is the marketing activities for the agency to promote itself and the money or commission rates that it should spend for the sale. As you can tell someone gave advice to three different agencies in this area following the peace of mind that a high majority of agencies in Turkey in pursuit of just saving the day. Very few are worried about how I can catch new customers and develop a more effective sales or marketing strategy. Only their references and agencies that have not been able to go beyond coiled and there are tons of agencies that will sink when the donuts run out. I attribute this fact to the lack of work, rather than to pass it by a simple sentence such as the tailor cannot sew his own tear. Agencies do not show the importance their customers attach to the branding process for themselves. Whether it's R & D, employer branding, or the agency's marketing activities, it is always left behind. At the end of the month when the trouble is seen, when the tail is stuck suddenly attacked. Therefore, marketing activities do not show continuity and growth does not show continuity.