With visibility into hundreds of digital agencies a year, we have a solid understanding of approximately what successful agencies are spending on overhead, relative to their Agency Gross Income (AGI).

We further break overhead spending into three separate categories: Admin, Sales & Marketing, and Facilities. Together, you are aiming for your overhead spending to be 20-30% of your AGI. If your spending is lower, it’s not an inherently bad thing.

Here are some guidelines on how those can be broken down, but keep in mind it doesn’t really matter what this split is, as long as the total is in the 20-30% range:

• Your Administrative expenses should be 8-14% of your AGI. So, if your annual AGI is $500k, you should be spending in the realm of $40-60k on Admin.
• Similarly, you’re going to be wanting to spend anywhere from 8-14% of your AGI per year on Sales & Marketing.
• Finally, the range to aim for in Facilities Expenses is 4-6%. For those running fully remote companies, you may have little or no facilities expenses, but you might be reallocating those Facilities Expenses towards things like remote working, stipends, company retreats/meetups, and such.

**ℹ️** If you have any other questions on the topic, please don’t hesitate to reach out to your Parakeeto Account Manager so they’re able to give you the clarity you need!