How COBE Generated $2M in Low-Season Revenue and Increase Company Margins by 12%

+12%

increase in gross profit margin

$2M+

revenue generated during low season

layoffs during slow quarters

It's better to have a lower profit than to have people sitting idle, because idle time is no revenue at all.

Felix Menzel, Managing Director, COBE

Challenge

COBE's Seasonal Demand Nearly Bankrupted the Business – Twice

COBE built its name as a UX and digital product agency, growing for a decade on project-based work across teams in Germany and Croatia. The team had design talent, development depth, and a loyal base of repeat clients. What it didn't have, for years, was a finance function built for its own demand curve.

Project pipelines swelled and emptied unpredictably. Some months brought more signed work than the team could staff. Others left people sitting idle while payroll ran on regardless, says Felix Menzel, who eventually took over financial controlling from an external CFO. Without anyone internal owning the numbers, the gap between flush months and lean ones went untracked until it became a crisis.

That gap nearly ended the company. Twice in COBE's history, a stretch of underutilized staff and undisciplined spending pushed the agency to the edge of closing. An outside CFO who reported only on the past, with no one steering decisions in real time, meant warning signs surfaced too late to act on.

"Somebody external can't produce the same quality of data and analysis to steer the company properly. You need someone internal owning that."

Solution

Forecasting the Dip, Then Pricing and Staffing Around It

Bridges approaches agency finance the same way Menzel eventually did: start with the unit economics before touching the forecast. Once cost rates, utilization, and margin targets are dialed in, seasonality stops being a crisis and becomes a plannable cycle.

Every Project Now Clears a Margin Bar Before It's Signed

Pricing had been more art than math, with no consistent way to know if a deal was profitable until the project was already underway.

Built a fully loaded cost rate per employee from salary, benefits, and actual billable days.
Set a 75% gross margin target at the offer stage, with 70% as the accepted floor once client rates were negotiated.
Used the cost-rate model to catch underpriced deals before signature, not after overrun.

Margin visibility moved from after-the-fact to before-the-signature.

Low Season Became a Revenue Source, Not a Dead Zone

Demand had always thinned out at predictable points in the year, and the agency's response had been to wait it out and hope the pipeline refilled on schedule.

Tracked utilization 3 months out as the leading indicator, ahead of lagging metrics like realized margin, to see soft stretches coming.
Pushed lead conversion harder into those windows instead of treating them as a quiet period to ride out.
Offered targeted pricing incentives to convert hesitant leads and keep signed work flowing through the gap.

Low season alone generated more than $2M in revenue — proof that the dip could be filled, not just survived.

Slow Quarters Stopped Costing Headcount

Demand softened unevenly across the year, and the instinct had been to either over-hire ahead of it or let people sit unbillable through it.

Shifted default staffing to freelancers for peak demand, converting to permanent hires only after 3 to 6 months of sustained need.
Accepted lower-margin, even near-breakeven, work during soft quarters specifically to keep the existing team billing.
Treated bench time, not payroll, as the real cost worth avoiding when demand dipped.

Zero layoffs through COBE's slow quarters — flexible staffing absorbed the dip instead of headcount.

"Nothing big or dramatic. Just little levers — pricing, staffing, where we pushed for conversion. Getting ahead of the cash instead of reacting to it."

Results

COBE Now Treats Seasonal Swings as a Known Variable, Not a Recurring Emergency

COBE now treats seasonal swings as a known variable instead of a recurring emergency.