Step #3 of the system, Define Metrics and Targets, is a pivotal stage in the financial journey of any marketing agency. Without clear metrics, even the best strategies can lose direction. Metrics help owners understand what’s working, what’s not, and where improvements are needed. But more than that, define metrics and targets brings focus, alignment, and accountability across the organization.

In this step, agency owners learn how to identify the most relevant KPIs for their business, whether it’s gross margin, revenue per employee, client retention rate, or average project profitability. Calvin also breaks down how to tie these metrics to actionable targets that guide day-to-day decisions.

SmartBooks Founder and CEO Calvin Wilder wrote The Financial Operating System for Marketing Agencies to help agency owners take control of their finances and build healthier, more scalable businesses. After working with hundreds of small businesses over the past two decades, Calvin developed this system to address the financial blind spots that often limit agency growth.

The truth is, many agencies rely on vague or vanity metrics that don’t actually drive better outcomes. That’s why this chapter focuses on building a performance management system rooted in clarity and consistency. By setting the right financial and operational targets, agency owners can make smarter decisions, delegate more effectively, and stay focused on the metrics that matter.

This step is especially valuable for agency leaders looking to scale, improve profit margins, or create a more resilient operation. Whether you’re running a lean startup or managing a team of 50+, defining your metrics and targets is critical to achieving long-term success.