What does it take to run a successful, growing & profitable agency?
If you run your own agency or are a solopreneur and want to grow your agency, or aspire to start one, then this blog will give you some really useful insights in how to grow your agency in a sustainable profitable and perhaps most importantly, enjoyable way.
Back in the early 90s I decided to start my own marketing agency. I made tons of mistakes (more on that later) but I did have some really clear reasons as to WHY I wanted to run my own business.
- Wanting to be in control of my own destiny;
- Wanting to grow something and make an impact;
- That feeling that I could do it better than what was currently out there (naïve arrogant youth can sometimes work in your favour!).
What I didn't realise (at age 24) is that you need to be able to do more than just be good at delivering the service (in this case PR and content). Since then I've learned that every successful entrepreneur has skills in the following 3 areas and if you want to be successful you need to make sure you are focusing on all 3.So these are:
Let’s dig a little deeper into each of these:
1. Be good at delivering work today (revenue).
I call this one, ‘money today’ and it is perhaps the easiest one to understand - after all we started our own agency because we were good at doing this. This includes everything to do with delivering ‘work this month’. It will incorporate client and account management, producing copy, design, web build etc. and generally keeping existing clients happy (whilst also ensuring you don't over service them!).
As a rough rule of thumb this is probably going to account for 60 - 70% of your time.
2. Be good at focusing on the future of your agency (strategy).
I call this one ‘money tomorrow’ and it can easily be overlooked when you are super busy delivering client work. Strategy includes everything you will do to get new clients in the future. So that will include your marketing, business development, networking, pitching, proposal writing and so on.
As a rough rule of thumb this is probably going to account for 25 - 35% of your time.
3. Be good at running your business (admin)
This is the lifeblood that keeps your business going and is usually a cost. Whilst this area can be quite tedious for entrepreneurs nevertheless it is vital that you allocate enough time to focus on the admin part of running your business. This will include finance, invoicing, credit control, HR, paperwork, filing etc. You will want to delegate or automate as much of this area as possible.
As a rough rule of thumb this account for no more than 10% of your time.
So it's clear that if we want to be successful at running and growing our agency we need to be disciplined about how we allocate our time. This is especially true if you want to avoid those nasty peaks and troughs that many businesses go through. I.e. A peak happens when we are super focused on delivering great client work. However, as great as that is for current cash flow, it also causes us to not focus on the future and that ultimately leads to projects coming to an end and an empty order book - so we decline into a trough. I went through this 3 times in the 11 years of running my agency and trust me, it was not pleasant so if you want to avoid this, make sure you are allocating enough time across each of the three areas as outlined above.
If you want to read more about creating a scalable agency, grab a copy of my free eBook
5 traits of a successful entrepreneurial agency owner
Over the past 14 years I have worked with over 350 agencies and I've identified 5 traits that every successful entrepreneurial agency owner possesses, so let me outline them for you.
1. Has a clear vision
If you don't know where you are going you'll never know whether you get there and that simply is why every agency should have some kind of documented vision! This vision should motivate and excite you.
If you have a team then make sure you bring them along with you, so they are equally motivated to get to the destination. When you share your vision with your team you need to acknowledge the reality that some team members will feel like it sounds like a lot of hard work so remember to make it clear to them “what's in it for me?” if you reach the destination. This could include opportunities, new exciting projects, training, promotion, bonuses, pay rises etc.
What does a vision look like?
A vision needs to document the destination that you want to reach, and it needs to describe that destination in terms of the sales, the type of customer that you want to win, the staff that you need, what systems and processes do you need to support that vision and how you will measure the steps along that journey.
Once you have this vision (it should be on one page), you then need to turn that into quarterly strategies and then turn those quarterly strategies into monthly plans.
If you want to be successful with your vision, you cannot create it once a year and then cast in stone and not be willing to change it. This is a sure-fire way of making it fail and is one of the two reasons why so many businesses fail to create a vision, and this stops them doing it in the future (the second being that the vision is overly complex). So, make sure that you revisit this vision frequently. Your vision needs to be a dynamic document that you are constantly updating based on what you know today.
2. Has a clear niche
I have written about niching many times before (you can grab my FREE ebook on niching here) so you'll know I am a big believer in finding your niche and showing up in this niche as an expert.
Because it helps you stand apart from your competition and show up as a specialist rather than a “jack of all trades”. A specialist will always win against a generalist and a specialist agency will be able to charge higher fees and finally, when you have a clear niche you can identify your ideal target customer much more easily and build sales & marketing messages that really resonate with them.
Remember your niche will be the intersection of where you get the best results, where you have previously delivered profitable work and where your passion lies. Read more about niching in my detailed blog on niching.
3. Builds a strong team
A successful agency owner who aspires to grow their agency knows that a crucial part of this is building a strong team. Now I’m not a big believer in building a business using freelance staff because that's like creating your agency on quicksand (understandably, freelancers have their own agenda, will not necessarily share in your vision and often, whilst doing a good job, will not go the ‘extra mile’).
Freelancers are good for bringing in specialist skills and coping with capacity issues, and certainly can be used in the early days to build your business (until you have enough sustainable revenue to hire a member of staff) but ultimately you will want to hire your own team.
Now a successful agency owner will be willing to hire the best they can afford (and sometimes challenging people), and delegate down as much as possible. This approach not only frees up your time but also develops your team members.
4. Is laser focused on how they spend their time
Talking of time, if you can delegate down as much as possible it will leave you to focus on the things that only you can do. These tasks will include developing the vision and focusing on the strategy i.e. the future of your agency.
Don't get caught up in the belief that all clients want you to work on their account and you don't have time to delegate or believe it's quicker to do it yourself. These beliefs are a sure-fire way of you becoming the bottleneck to the growth of your agency.
5. Is resilient
Agency owners often believe that they are superman or superwoman and are the sponge to absorb all the stress and pressure that surrounds them. However, ensuring you take care of your mental well-being is crucial to the longevity of your focus & energy, and ultimately your agency. Being mentally tough means putting really good boundaries in place and not letting things that happen on a day to day basis derail you from your vision. Good boundaries, learning to say NO and getting your priorities right also enable you to stay focused and motivated.
So finally, here are 8 areas you should focus on in 2020 to ensure the successful, sustainable and profitable growth of your agency:
- A clear actionable 12-month plan
- A clear niche
- A definition of your Ideal Target Customer (your ideal avatar or persona)
- A sales and marketing strategy and plan
- Some financial planning including cash flow forecast
- A value-based pricing policy
- A method for managing clients in a profitable way
- A staff plan (even if you are just using freelancers)
So how are you doing implementing all of this? What is the one area you are struggling with? I am running a series of FREE LIVE webinars on the topic of Growing Your Agency in 2020. Learn more here: find a time that works for you and save your seat.