The numbers behind the carousel
SPI Research's 2026 Professional Services Maturity Benchmark, published with Deltek, found billable utilization hit 66.4%, its lowest point in nearly two decades. In 2021 it was 73.2%.
- Top firms bill more. High-performance firms billed 75.0% of their time. Everyone else billed 64.9%.
- Profit is thin. Industry EBITDA was 9.9% in 2025, well below SPI's expected 15% benchmark.
- 75% is the target. Deltek's summary calls 75% the threshold SPI considers optimal. The survey covered over 500 firms.
Utilization means: billable hours ÷ total available hours. If a person works 40 hours and bills 26, their utilization is 65%.
Why this is a money problem, not a time problem
Every hour you don't bill still costs you the same salary, rent and tools. Going from 66.4% to 75% means billing about 3.4 more hours per person per week at a 40-hour week. You don't need more hours. You need more of the same hours to be paid for.
The Capacity Calculator (Google Sheets)
Open a new Google Sheet. Put the labels in column A and the values or formulas in column B, starting in row 2. You type values only in B2 to B8. The rest calculate.
| Row | A: Label | B: Value or formula | Example result |
|---|---|---|---|
| 2 | Team size (billable people) | 5 | 5 |
| 3 | Hours per person per week | 40 | 40 |
| 4 | Working weeks per year | 48 | 48 |
| 5 | Billable hours per person per week (from tracking) | 26.56 | 26.56 |
| 6 | Hourly rate ($) | 100 | $100 |
| 7 | Target utilization | 75% | 75% |
| 8 | Weekly cost per person, all-in ($) | 1500 | $1,500 |
| 9 | Total hours per year | =PRODUCT(B2,B3,B4) | 9,600 |
| 10 | Billable hours per year now | =PRODUCT(B2,B4,B5) | 6,374.4 |
| 11 | Utilization now | =B10/B9 | 66.4% |
| 12 | Billable hours at target | =PRODUCT(B9,B7) | 7,200 |
| 13 | Hour gap per year | =MAX(0,B12-B10) | 825.6 |
| 14 | Money gap per year ($) | =PRODUCT(B13,B6) | $82,560 |
| 15 | Extra billable hours per person per week | =B13/B2/B4 | 3.44 |
| 16 | Break-even rate if you price on all hours | =B8/B3 | $37.50 |
| 17 | Break-even rate on target billable hours | =B8/PRODUCT(B3,B7) | $50.00 |
Worked example (the carousel math)
- Capacity: 5 people × 40 hours × 48 weeks = 9,600 hours a year.
- At 66.4%: 9,600 × 0.664 = 6,374.4, about 6,374 billable hours.
- At 75%: 9,600 × 0.75 = 7,200 billable hours.
- Gap: 7,200 − 6,374 = 826 hours (825.6 before rounding).
- Money: 826 × $100 = $82,600 a year (the sheet shows $82,560 because it doesn't round the hours).
- Per person: 825.6 ÷ 5 ÷ 48 = about 3.4 extra billable hours a week.
Step 1: Count real billable hours
A 40-hour week is never 40 billable hours. Email, meetings, sales and admin take time. A common rule is to plan on 75%, so 40 hours is really about 30 billable. Use 30, not 40, for planning and pricing.
Step 2: Track every hour for 2 weeks
Unbilled hours often mean not enough work coming in, not a lazy team. In our 5-day blitz we booked 25 calls in one week for a client from 96,408 emails. Closing the utilization gap starts with a full pipeline, and filling it every day is what we do for clients.
Want us to set this up for you? Book a free call →You can't fix what you guess. For 2 weeks, everyone logs every hour into one of these buckets. A free time tracker or a shared sheet works.
| Bucket | Billable? | Examples |
|---|---|---|
| Client work | Yes | Delivery, client calls, reporting |
| Sales | No | Proposals, discovery calls |
| Internal meetings | No | Stand-ups, team calls |
| Admin | No | Invoices, email, tools |
| Rework / unbilled extras | No (but should it be?) | Free revisions, out-of-scope work |
| Learning / idle | No | Training, waiting for client input |
Add up the client work hours, divide by 2 to get a weekly number, then divide by the number of people. That's your value for cell B5.
Step 3: Cut the non-billable
Look at the biggest non-billable bucket first. Example: 5 one-hour internal meetings a week is 5 hours a week per person. Turning 3 of them into a written update gives back 3 hours, almost the whole 3.4-hour gap in the example.
| Problem you find | Fix |
|---|---|
| Too many internal meetings | Replace status meetings with a written update |
| Unbilled extras and free revisions | A clear scope with priced extras (see our SCOPE guide) |
| People waiting for client input | Set deadlines for client feedback in the contract |
| Not enough client work to fill hours | A pipeline problem: more sales conversations, not more effort |
| Senior people doing admin | Hand admin to a cheaper role or a tool |
Step 4: Price on the hours you bill
If you set your rate by dividing cost by 40 hours, you are under-pricing. Divide by the billable hours instead.
| Price on 40 hours | Price on 30 billable hours | |
|---|---|---|
| Weekly cost per person | $1,500 | $1,500 |
| Break-even hourly rate | $1,500 ÷ 40 = $37.50 | $1,500 ÷ 30 = $50.00 |
| Rate for a 50% margin (break-even ÷ 0.5) | $75 | $100 |
Pricing on 40 hours sets break-even 25% too low ($37.50 vs $50). Every hour you can't bill eats your profit.
Build or check your sheet with Claude
Help me check my team's billable utilization. Team size: [number] Hours per person per week: [number] Working weeks per year: [number] Billable hours per person per week (from 2 weeks of tracking): [number] Hourly rate: $[number] Weekly cost per person, all-in: $[number] Target utilization: 75% Calculate and show the math: 1) total hours per year, billable hours now, utilization now 2) billable hours at 75%, the hour gap and the money gap per year 3) extra billable hours per person per week to reach 75% 4) break-even hourly rate on 40 hours vs on billable hours at 75% Then suggest 3 ways to close the gap based on this time tracking summary: [paste your bucket totals].
Common mistakes
| Mistake | Fix |
|---|---|
| Guessing billable hours | Track every hour for 2 weeks first |
| Pricing on a 40-hour week | Price on 30 billable hours |
| Counting free revisions as "client work" | Put them in the unbilled extras bucket |
| Pushing people to work 50 hours | Raise the billable share of 40 hours instead |
| Ignoring the owner's hours | Count your own time too |
Links and tools
Quick answers
Is 75% right for every business?
It's the level SPI Research considers optimal for professional services firms. Very senior people and owners often bill less because they sell and manage. Set a target per role if you need to.
Should I count sales calls as billable?
No. They're important, but no client pays for them. Track them in their own bucket so you can see how much time sales really takes.
What if we're already at 75%?
Then focus on price: make sure your rate is set on billable hours, not 40. Going much higher than 75% often leads to burnout.
Why does the sheet show $82,560 and the carousel $82,600?
The carousel rounds the hour gap to 826 hours before multiplying by $100. The sheet uses the exact 825.6 hours.
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