Recoup your professional development investment – Agency Management Tip for Owners
Here's a simple but effective way to make sure your agency really benefits from the professional development dollars you spend on your team.
What’s your agency’s sustainability program? – Agency Management Tip for Owners
What's going on in terms of your own internal education program? Your own sustainability program around helping everyone on the team get smarter and better?
Your clients want more face time – Agency Management Tip for Owners
In the 2023 Agency Edge research project, we asked CMOs and VP of marketing “Would you like to spend more time with the agency owner or the leadership level folks?” And what they said was it was a 1-2 punch. They not only wanted to spend more time with you, but they wanted to do it when they could be away from their daily work, trade shows, conferences, things like that, places where they've already sort of carved out their calendar to focus on bigger picture planning, strategy kinds of things are not in their office, are not running from meeting to meeting. They're not distracted. And number two is also one of the places where they were most likely to be excited about new ideas and new budget. So if you serve clients who are in an industry where there are great trade shows, conferences, continuing ed credit events, things like that, that's a great place for you to invest your time and energy is to be there with your clients. Drew McLellan, CEO of Agency Management Institute, offers a weekly agency management tip to agency owners.
Beat the financial odds – Agency Management Tip for Owners
2023 was a brutal year on the new business front for most agencies. But, we had a group of agencies that beat the odds. How did they do that? They did that by running their agency by the numbers. They did not allow emotion. They did not allow discouragement. They did not allow fatigue to take their eye off the numbers that told them exactly how to run a profitable business. Now, if you're saying, what are those numbers, you're not alone. A lot of agency owners aren't familiar with agency math. They don't understand what AGI is and isn't. They don't understand 55, 25, 20. And what that metric means. And they don't understand that no matter how tough the year is, no matter how challenging your biggest client is, no matter what kind of staff attrition you have, if you run your business by the numbers, you can be profitable every single time. Drew McLellan, CEO of Agency Management Institute, offers a weekly agency management tip to agency owners.
Don’t give away the farm – Agency Management Tip for Owners
It is very dangerous to create bonus programs for individuals (as opposed to the entire team) inside your organization. And it's dangerous because a little bit here and a little bit there eat away at the profit that you make. Most of you have not really cemented the fact with your account service people that it's actually their job. It's what they get paid to do. Grow their book of business. An AE should be able to grow their book of business by 10% a year. So whether it's a client or five clients, let's say they're managing on January 1st, half a million dollars of AGI, that half a million dollars should grow because they're doing their job to $550,000 of AGI by the end of the year. You should not give them a bonus for simply doing their job. But if you are going to create a bonus program for account service people or for anybody in your organization, you really have to do the math. You need to make sure you don't eat through all of the profit of whatever the agency grew or gained by this person's efforts. Drew McLellan, CEO of Agency Management Institute, offers a weekly agency management tip to agency owners.
Profitability by client – Agency Management Tip for Owners
If you're not making at least 10% profit on a client, you have to ask yourself, why are these people why is this business still a clients? Now, there may be reasons why an unprofitable client — even a client that you're paying for the privilege of doing the work — is worth keeping. They may be a great referral source. But you have to make that decision consciously. You have to be intentional about that decision. And, by the way, and I know this is not going to surprise you, they can't all be less than 10% profit. So profitability by client by month, by quarter, and annually.
Unreimbursed Partner Expenses – Agency Management Tip for Owners
Let's talk about unreimbursed partnership expenses. An unreimbursed partnership expense are expenses that you pay for out of your personal pocket that you don't get reimbursed for. Let's say you're a start-up, or let's say you've had a tough year and you couldn't run all those pass-throughs through the business like normal. You still can take a tax advantage. The way it works is, first of all, this has to be covered in your operating agreement between your partner, in your partnership, or in your S Corp if you are a sole owner.
You can’t carry the load forever – Agency Management Tip for Owners
For many of you, you've been riding the profit line really tight since probably fourth quarter of 2022, and then all through 2023, things have been tight and a struggle for you and you have kept your good people and you have been waiting and kind of betting on the come, hoping that the work would come because clients and prospects were saying, “Yep, we're going to do it. Yep, we're going to do it.” But how long can you carry the load and not make money?
Get the most from your credit cards – Agency Management Tip for Owners
I know that sounds crazy, but the reality is most agencies use their credit card pretty liberally. We have a lot of expenses we run through on our cards and we want to make the most of credit card benefits. We can create our own currency by choosing the right credit card.
Repeat what matters – Agency Management Tip for Owners
This is a simple but very important reminder, worthy of repeating. When we are communicating with our team our clients, or our prospects we need to bake in opportunities for repetition. When we repeat what matters, we verbally underline and bold it... and that leads to retention and action.
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