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How to Scale Your Agency — Overcome the Wizard Complex

At UGURUS, a business school for digital agencies, my team and I spend thousands of hours a year consulting and coaching owners in groups or one on one. Our aim is simple: To help you achieve freedom in your business and life. One of the ways we do that is by helping digital agency owners work ON their business, not just IN them. “When you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.” -Michael E. Gerber, E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It For agency owners, achieving freedom usually means: Working fewer hours (less than sixty is a start) Making more money (getting paid a healthy salary) Sitting in fewer seats (helping you do better work) There’s a commonly-accepted fallacy out there that most entrepreneurs are working towards an early retirement and days filled with sitting on the beach drinking fruity cocktails. However, most entrepreneurs I meet love the work they do, and have no intention of retiring early. The standard definition of the term “exit” in entrepreneur-speak is to sell your business, but most agency owners I meet aren’t anywhere near this point. They haven’t built a company that is worth anything beyond themselves. They’re involved in every aspect of the business from generating leads, converting those leads into clients, and delivering the work. They’ve built themselves a job. A stressful. Demanding. Underpaying. J-O-B. For these owners, “exit” means being able [...]

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The 5 Most Common Legal Mistakes in Agency New Business – and How to Fix Them

The agency new business process is, for most agencies, exciting and stressful at the same time. While your team is focused on the thrill of a potential “win,” and what that could mean for the agency’s fortunes, it’s probably equally under stress about meeting deadlines, putting forth your best efforts for the prospect, and keeping other clients happy too. Jody Sutter of Sutter Company and I recently addressed the challenges of new business and negotiations in a web clinic for agencies organized by Filament: “Don’t Leave Money on the Table – Negotiating Client Contracts From a Position of Strength.” While you’re navigating this process at warp speed, it’s easy to make an oversight or misstep that could cause bad legal consequences or financial loss for the agency. Don’t let this happen – be aware of the most common legal mistakes agencies make during their new business efforts, and how to fix (or avoid) them. 5 Legal Mistakes In Agency New Business and How to Fix Them Mistake #1: You don’t protect the Agency’s intellectual property during a pitch or discovery session, or in your proposal. Fix It: Sometimes it’s a valid business decision to allow the Client to own IP in pitch materials, spec creative or proposals – either because the Agency negotiated payment for it, or because it’s a required “ticket” to participate in the opportunity. But make it an intentional decision. Unless you’ve agreed with a prospective Client that it will own the Agency’s pre-engagement IP, use a Nondisclosure Agreement that protects the Agency’s ownership position. Absent that, at a minimum include IP ownership clauses in your proposal and pitch assets, and use copyright ownership notices on these materials and any spec creative [...]

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How to Position Your Agency for Success

Every day across the globe, agencies are working hard to differentiate their clients and help drive their clients’ growth. These agencies use the art and science of positioning to help their clients stand out from competition in an important and authentic manner. Sadly, most of the agencies doing this fine work have not worked the same positioning magic for themselves, in spite of the fact that they compete with dozens—if not hundreds—of other agencies on a daily basis. There is an abundance of talented and effective agencies who have failed to differentiate themselves. As a result, they are missing out on the significant (and very profitable) growth opportunities triggered by a compelling brand position. So, how to position your agency for success? Let’s talk about it. The Challenges of Agency Growth As you no doubt know, there are numerous challenges when it comes to growing an agency today. These challenges include: • More competition • Greater complexity • Difficulty expressing the uniqueness of your agency • A more educated and informed buyer who does his/her agency research without your knowledge Most agencies face these challenges. There is, however, an opportunity to address these challenges by positioning your agency in a truly unique, compelling and differentiated fashion. In this paper we will share the learning we have regarding how to create such a differentiated position for any agency by leveraging best practices that we have learned from our 28 years of agency related consulting. The Great Agencies of Old Most agencies today face the challenge of how to effectively position their firm and how to present their agency in a compelling, client-centric manner. It was not always like this! The great agencies of old stood for [...]

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Sharing Agency Performance Goals—It Changes Everything

If you’re operating your agency with the goal of achieving the performance metrics of 55/25/20 recommended by the AMI, it’s easy to see in any given month just how well the agency is performing. Those three numbers should be the basis to guide your decisions on everything from personnel to pencils. Setting goals is great, sharing agency performance goals though, that has the power to change everything. One of the most important questions agency owners should be asking themselves is a simple one: How many of your agency staffers understand or are even aware of those numbers and how they drive a healthy, sustainable enterprise? Is it just a few—perhaps your finance person and your number one key executive? That’s the most common answer, and it’s also a big mistake. As an owner, if you’re hesitant to educate everyone in the agency about the numbers, you’re literally managing with one hand tied behind your back. Here’s how sharing agency performance goals changes everything, empowers your team, and sets an exciting path for the future. Sharing Agency Performance Goals—Financial Transparency Fuels a Growth Mindset In coaching sessions I have with agency owners, one of the first things I want to uncover is the owner’s comfort level with financial transparency. If the owner is new to AMI, I’ll take them though the metric; 55 percent of adjusted gross income (AGI) is the target for the agency’s fully loaded compensation, 25 percent utilized for overhead, and 20 percent profit. For those who already know the formula, I work to understand just how deep this foundational knowledge runs throughout the agency. As an agency owner for 30+ years, I get the hesitancy about “opening the kimono.” A common concern [...]

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How Agencies Can Benefit from Tax Planning

Is tax season really over? While the filing deadline for individual and corporate taxes has come and gone (unless of course, you’ve extended), from a strategic standpoint, tax season may be over, but the need for tax planning is really an omnipresent one. There’s always a sense of relief once taxes are filed. It’s an annual chore that, dare I say, nobody loves to do. But everyone I know loves when it’s done. They like getting it checked off their list so much that very few clients want to talk or think about taxes or tax planning for the rest of the year. That is, until tax time comes around again. But that is, in my opinion, a mistaken. In fact, paying attention to your tax situation outside of tax season is worth more than you might think. A few people I know even made it their hobby to figure out ways to pay less in taxes. I’m not suggesting you must go that far. But you should have a good understanding of why the traditional “tax season” doesn’t mean anything to you and your agency business and how agencies can benefit from tax planning. The Misnomer of “Tax Season” Other than getting your own taxes filed at the beginning of each year, “tax season” is a misnomer for anyone outside of the tax preparation industry— where the term got coined in the first place. Tax season is really tax FILING season. Which is an important distinction, so you know where your focus should go. Yes, it’s important to get your tax return filed on time. But keep in mind that filing is the end of a year-long cycle where you should be seeing results [...]

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What’s Your New Business Strengths Profile?

Have you ever found yourself in a position of being forced to do something you felt you weren’t suited to do, that was a poor fit for your business strengths? My life partner has a small 4-seater airplane, a Piper Cherokee, in which we make occasional trips to Newport or Boston, or even an impromptu flight to Block Island for dinner on a summer evening. He thought it would be a great idea for me to be a pilot too, and I didn’t disagree. How cool would that be to have two pilots in the family? After my first flying lesson, the answer to that question was, “not cool at all.” I’m not afraid of flying—in fact I love being a passenger—but I was surprisingly petrified sitting in the pilot’s chair. I was overwhelmed by all the information a pilot is required to juggle and, what’s worse, I found it all pretty uninteresting. Fear and boredom – not a good combination. Some people feel the same when confronted with business development responsibilities at their agencies, and just like in life, you can't force someone to do something they don't enjoy or that don't align with their strengths. In fact, there are four distinct types of personalities that can fall into the business development category. Hunters Promoters Communicators Thinkers Hunters  Hunters have an instinct for selling among their most prominent business strengths. They’re energized by making connections with other people and feel at ease when interacting with strangers, whether on the phone or in person. Most agencies are not filled with natural-born hunters, which is why they usually fail to sustain any sort of plan that entails outbound prospecting. Neither carrots nor sticks seem to make [...]

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Are You Tracking These Essential KPIs in Your Agency?

Do you know which employees are most profitable? Which marketing campaigns are most successful? Where your most qualified leads are coming from? How many sales you will get next month? And perhaps most importantly, why? Essential KPIs (key performance indicators) are the path to understanding. Key performance indicators, or KPIs, can give you the necessary insight you need to answer all these questions and more. They can track and measure how well -and how poorly- every aspect of your agency is performing. If you want to grow, sell, or simply maximize your profits then essential KPIs are non-negotiable. But the thing about essential KPI’s is that they often times come with a pesky problem called analysis paralysis. This is being so caught up in tracking and analyzing that the original task never gets accomplished. So how do you track all of the essentials without getting caught up in the numbers? It starts by monitoring only what matters because while you can track just about everything you really don’t need to. There are also certain KPIs that are more important to digital agencies than they are to other industries. Below you’ll find the most KPIs that your agency needs to be tracking. Expenses Knowing exactly where your money is going will allow you to cut back on unnecessary expenses. Sometimes the simplest thing, like a software subscription you forgot to cancel, can cost your hundreds of dollars. You should break down your expenses into individual line items, then they should be categorized so you can see which areas are costing you the most. If you’re not strictly monitoring where every penny is going you’re probably throwing away a lot more money than you realize. One of [...]

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What is the Purpose of a Leadership Team?

A great leadership team and the right leadership team aren’t always the same thing. Finding what is the purpose of a leadership team and how to fill it is difficult for many agency owners. Often, business leaders think they can fill executive positions with their best employees. Sometimes that works, but most of the time these teams of super-producers fail to replicate their success in the C-suite. Companies do not need their best employees at the top; they need their best leaders running the show. Unfortunately, Deloitte’s Global Human Capital Trends 2016 report reveals only seven percent of polled executives put their rising millennial talent through leadership development programs. To build a more successful company, leaders must rethink how they build a leadership team. As You Build a Leadership Team, Who Belongs at the Top? Usually, young companies build a leadership team by developing informally and oftentimes too soon. Someone stands out as the go-to person for solutions, and that person gradually has more say in how the business operates. As the business grows, this informal arrangement becomes insufficient to meet the company’s evolving needs. Although growth necessitates formalized leadership roles, too many leaders get hung up on titles. They default to promoting department heads, elevating everyone without consideration for their circumstances. Does a department head who supervises just one person deserve a spot at the table? Maybe they do, but it depends on the skills and drive of the individual—not his or her current title. Who puts the team first? Which person considers the bigger picture when making decisions? Among the team, who offers innovative solutions and demonstrates personal accountability? What is the purpose of a leadership team head in general? Perhaps department heads [...]

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Four Tips to Successfully Scale at Your Own Speed

Get this: Just one percent of startups scale correctly, while more than 70 percent end up in a half-grown wasteland. This is the new discovery of 10X-E founder Jason Goldberg, who recently spoke at the Western Cape Funding Fair about the rocky road of scaling a company. Anyone with an idea can start a business, but only people with a vision can grow one. The question that separates those with vision and those without is: “What kind of business do you want to grow?” Some people want to scale quickly and sell high. Some want to establish a steady paycheck doing work they enjoy. Founders who understand their goals -- and the correct path to reach them -- are more likely to join that top percent of companies who scale correctly. No one will defend your time but you. Founders often find themselves doing work they never intended to do. Someone who loves baking might not love the accounting, janitorial work and hiring responsibilities of running a bakery. On the other hand, a terrible baker who loves running a bakery could be excellent in a strategic role but awful behind the counter. Founders of successful companies understand their limitations and personal goals. These four strategies provide a road map for entrepreneurs of all types to scale at the speed that works for them: 1. Stop focusing on gorilla clients. If one client accounts for a large percentage of the company’s revenue, the company is vulnerable. Clients can become dissatisfied or unmanageable for any reason, and if a company is overly dependent on one, a severed contract could mean layoffs and worse. This is true for companies both large and small. According to Bloomberg, when Express Scripts announced that [...]

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Five Mistakes That Will Bankrupt Your Agency

These days, agencies tend to get caught up in near-constant talk of creativity, innovation, and disruption. But all that noise can drown out the real reason you’re in this business: to make money. The truth is that you’re trying to make a living -- for yourself, your family, and your employees. And no matter how hard you work to serve clients, when you don’t make money, it’s pretty tough to sustain enthusiasm. Even when you are making money, this is a tough business. That’s why it’s crucial to avoid certain catastrophic mistakes agencies make every day. Draining Water From Your Own Pool Even smart agency owners make some of these painful mistakes. They don’t willfully sabotage their own efforts, but they fail to realize the long-term impact these seemingly innocuous decisions carry. You might even recognize yourself in these five financially draining errors -- and not realize how harmful they are to your bottom line. 5 Mistakes That Will Bankrupt Your Agency 1) Your pricing is too basic. Nine times out of ten, agencies present clients with a single price and package. However, when you do this, nine times out of ten, they’ll push back. Instead, always give them three options. Build the middle option first because this is the one they’re likely going to choose. This option should be your ideal sale and what’s really best for the client. According to a study on the center-stage effect, consumers feel that options put at the center of a range of options are the most liked. Once you’ve constructed your “middle” option, strip some of those deliverables away to create a first option. This bare-bones option is priced about 20 percent to 25 percent lower than [...]

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