Growing an agency is a full-time job. It’s down to the owners, CEOs, MDs, whatever your title; if you’re accountable for the company, you’re accountable for growth. And it won’t happen organically, at least not to the kind of levels we’d all like anyway. I think there are broadly 7 things you must tackle to grow your agency.
Agencies operate in a very crowded market. We’re competing with other agencies, consultancies, startups, tech companies, in-house teams and of course our old friend inertia. One of the biggest challenges to winning new business is that clients don’t leave the incumbent. It’s too risky.
Here’s my view on the 7 things you need to grow your agency in a long-term sustainable way:
Know where you want to get to, and by when
Lewis Carrol wrote ‘If you don’t know where you’re going, any road will take you there'
It’s important to think about what success means to you, so you can align your efforts accordingly. If you dream of selling to a network in 3 years, you’ll need £1m EBITDA, or it’s unlikely they'll be interested. After all, the cost of a transaction for the acquirer after fees is c £250k, so they need enough fat in there to account for the risk. You’ll also need to offer something of strategic value, or be enough of a thorn in their side, for them to want to take you out. Of course there are other options, but if you want to open your company up to the biggest potential set of buyers, this is the kind of scale needed.
If you want to run a comfortable lifestyle business, things will be different. A profitable business is a profitable business, but it’ll be about generating enough revenue to keep you and your team in a lifestyle you’ve agreed is acceptable. The pressures will be different. Not necessarily easier, just different.
A great team
Without good people, skilled in their craft and committed to your cause, you are unlikely to build a successful, high performing company. So, invest in the best you can afford, include them in your ambitions and the journey you want to go on. Together. After all, there’s a few thousand others like yours they could join.
A strong proposition, for a specific audience
Don’t try to be all things to all people, or you’ll end up being nothing to anybody. When you’re starting out, it’s tempting to offer too many services to pay the bills, but you’ll pay for this in the long term. Work out who you want to serve and why. Which industries do you know the best and have opportunity for growth? What value can you add to that industry and why should they choose you? Just because you are aiming for something specific in your messaging, doesn’t mean you have to say no to other opportunities that come your way. It will help focus everyone on the team.
Do something that the world needs, now and in the future
Think carefully about obsessing over the next big thing, to the point where it impacts your current and mid-term revenue. We all need an eye on the future, especially in our industry. But know your core strengths and what the market is actually buying today. In the early stages of growth, having enough money in the bank to continue to trade is more important than investing heavily in AI or chatbots. Unless that’s your core business already of course!
Take stock of how you’re growing your current clients, and winning new business
Standard stuff here. What’s the percentage reliance on one customer? Don’t let it become any more than 15-20%. How much of your revenue is guaranteed? Really guaranteed; under contract, not pipe-dreams. If you’re an SEO or PPC agency, this is going to be high, but if you’re building websites or other digital products, it’s not. Unless you’ve managed to sell long-term programmes, which is a different topic all together. How much do you expect to win on top of this and who's responsible for that? And what gap does that leave for new business in order to hit your monthly target? That’s it.
I know many think it's boring, but this is an area I see many agencies fall short, and it can stifle growth and hamper your ability to make smart decisions. Systemising the management and reporting of your revenue and pipeline is fundamental to a high growth agency, and to potential acquirers. Don’t agonise too hard over the right tool. Many will do the job; Hubspot, Pipedrive and more. Pick one and commit to it. Your sales meetings (you do have these, right?), should be driven from this data.
Engage the enemy
Too many agencies sit back expecting the work to roll in. Dream on, it won’t happen, it’s insanely competitive out there. You have to work ever harder to be considered for, let alone win new business. You’re in the B2B game. You might create products and services that lean heavily on B2C skills, but you need to master B2B to successfully grow your agency.
Exhaust your immediate and extended network, client referrals, partners, intermediaries, events. Though events are becoming an increasingly competitive space in agency land. Write relevant content and place it in the right areas. And finally, contact cold customers. Yes, that’s right, build lists of prospects in the industries you believe you can compete in, and go find them. Use LinkedIn, use email, pick up the phone. Outsource the list building to specialists on Upwork. These are all channels that you’ll have to use in an effort to widen your reach and grow your customer base.
There are things I’ve left out of, because I felt it important to keep focused. If there’s something you think deserves a spot, let me know.
I hope this helps you kick-start your growth, or at least make you consider intervention.
If you’d like to chat about your plans for growth, please get in touch