This is a model built on Excel that predicts changes on total revenues and profits in a professional service business when the billing rate is changed.
In any professional service business, it is crucial to fix the billing rate optimally to maximize input revenue and the profit. Given an on-going practice, times come when one needs to consider hiking the billing rate. You need a model to predict what could happen. Without a model, it is a complete guesswork. This model that was developed for a medical practice, it could be easily used for other service businesses. On changing billing structures, client numbers and consequently revenue and the profits. Level of competition, differentiation of the business, client profiles, and type of service provided affects how client change percentage happens. An estimate of this number along with the average billing rates, cost structure, etc. decides the impact on the revenue and the profit.
The model makes it easy to analyze all the "what if" situations. Mostly you, need to check the impact with changes in the client percentages. You look at the breakeven point in the revenue in. This tells you if the revenue and profits will decrease when a certain client percentage change happens. The data can be viewed in chart form for easy interpretation. Rather than doing it by complete guess work, this model lets you do the analysis fairly systematically. Only guess you have to make is the change in client percentage that may happen. It could be a good tool in your professional service business when you are trying to find the effect of billing structure changes.