Episode 425

podcast photo thumbnail
1x
-15
+60

00:00

00:00

2023 is quickly coming to a close, so it’s time for agency owners to start thinking about the year ahead to come up with their 2024 game plan. With holiday hibernation quickly approaching for most agency owners, this is the perfect time to reflect on 2023 and start thinking about what we want to improve for 2024.

Many of us are coming out of a less-than-ideal year that threw us a lot of curveballs. So, if this year wasn’t your year, what game plan can you develop to make 2024 even better?

This episode is packed with a ton of action items that will set you on the path to getting your agency on the right track as soon as you’re back from the holidays. Whether you’re looking to tighten up your budget, grow your existing clients, reevaluate your team, or even find more time to do something memorable this year, this episode has everything you need to do to make your game plan and stick to it.

For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies, and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops and more.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

agency owner

In This Episode:

  • Making a game plan aligned with the legacy you want to leave
  • Creating a budget and aligning your expenses to it
  • Connecting better with your team to help them grow
  • Have a career path for every position
  • Improving your leadership team, including the agency owner
  • Identifying A, B, C, and D players
  • Having a growth plan for existing clients
  • Finding your niche and owning it
  • How will you show your clients and team you appreciate them?
  • What is one thing that would make 2024 unbelievable for you?

“We are in a very rare position to be able to do the things that allow us to have a great life because we control our schedule, we control the business, and we control how we take money out of the business.” @DrewMcLellan Click To Tweet
“One of the things that we owe our employees is the opportunity to get better. We owe them the support to get better.” @DrewMcLellan Click To Tweet
“Sometimes we lose really good people because they can't see how they can stay and keep growing professionally. We need to show them that we have a plan, and there's a path for them to do that.” @DrewMcLellan Click To Tweet
“If you want the freedom to do the work that only you can do, it means the team underneath you, the leadership team, has to take the things off your plate.” @DrewMcLellan Click To Tweet
“The most important new business focus for every agency is existing clients. How do you grow those clients? How do you grow their business, which grows your business?” @DrewMcLellan Click To Tweet

Ways to contact Drew:

Resources:

Hey, before we get to the show, I just wanna remind you that we have created a private Facebook group just for you, our podcast listeners. There are almost 1500 agencies, agency owners inside that Facebook group every day talking about what’s going on inside their shop, asking for resources, gut checking decisions, talking about everything from pricing to hiring, to biz dev. All kinds of things are happening there. We’re starting conversations. You guys are starting conversations. What I love about it is the community’s coming together and sharing resources, encouraging each other, and just sort of having a safe place to talk about what it’s like to own an agency. So all you have to do is head over to Facebook, search for a Build, a Better, Agency Podcast group, or Build, a Better, Agency Podcast.

And you’ll find the group. You have to answer three questions. If you don’t answer the questions, we can’t let you in. But they’re simple. It’s, do you own an agency or do you work at an agency? And if so, what’s the URL? What are you trying to get out of the group? And will you behave, basically? So come join us. If you haven’t been there for a while, come on back. If you haven’t joined, join in to the conversation. I think you’re gonna find it really helpful. All right, let’s get to the show.

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money, and keep more of the money you make. The Build a Better Agency Podcast, presented by a White Label IQ is packed with insights on how small to mid-size agencies are getting things done, bringing his 25 years of experience as both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Hey everybody. Drew McLellan here with another episode of Build a Better Agency. This is one of my solo casts. So for those of you who are seasoned veterans, what you know is that what this means is no guest this week, just you and me hanging out talking about something that is on my mind that I know is on a lot of your minds. And we’re gonna just work through it together, just the two of us. But before we do that, I do want to announce the free workshop winner. So as you know, at every solo cast, we go to all of our ratings and reviews, and we do a drawing for a winner. And that winner gets to go to one of our live workshops.

The agency owner gets to attend one of our live workshops anytime they would like. So here’s how this works. Here’s how you make sure you’re in the drawing. So you go and you leave us a rating or review on wherever you download this podcast. so it might be iHeartRadio, it could be Google, it could be Apple Podcasts, it could be a plethora of places. But wherever you go to get your podcasts, you’re gonna go to that website, you’re gonna search for our podcast, build a Better Agency, and you’re gonna leave a review and, and this is the important part, you’re gonna take a screenshot of that review and then you are gonna send it my way.

You’re gonna send it to Drew at agency management Institute dot com. Why? Because on most of the podcast sites, you have a username. And we cannot tell from the username if it’s, you know, I love Kittens 92. I can’t tell who that is, and I certainly can’t tell the agency. So a lot of you use your personal Gmail account or something else to download those. So to identify you, what I need is a screenshot of the review emailed to me, and then you’ll go in the drawing and you will stay in the drawing for as long as it takes for you to win a seat. So these seats are about two grand if you’re not a member.

So it’s, it is well worth the five minutes to go ahead and leave a review and then email it to me for a shot at the $2,000 free workshop seat. So this month, the winner of the free workshop is Josh Rogers. Josh comes from the agency Wizardly. So Josh, I’ll be reaching out to you and letting you know that you won. Good news is this don’t expire. So if you can’t make it this spring or this fall, that’s fine. You just come when you can, when you can get to us. But we are happy to have you to host you at our workshop. So all you have to do is get to Denver, put yourself up in a hotel, and we will take care of the rest. We’ll feed you and we will teach you.

And hopefully we’ll have some good fun while we’re doing it. So we’d love for you guys to join the drawing. Again, super easy to do. Review screenshot, email. All right, so Josh, congratulations. So what are we gonna talk about today? If you’re listening to this in real time, you, if you’re in the us you just had a long weekend for Thanksgiving and the holidays, the winter holidays are right around the corner. And so you are thinking about all of that. And I think about all of that. Of course, I’m doing my Christmas shopping and all of those things. But what I also think about is that we are about to enter into what I call the holiday hibernation.

And what that is is from about December 10th or 15th through Martin Luther King Day here in the US or around January 15th, things get very quiet. Clients, quiet down. A lot of our employees are taking time off, we’re taking time off to be with our family and friends, but it’s actually a great time to do a lot of thinking and planning. And so I have a laundry list of things that I want you to be thinking about and planning over the next six weeks. So this is, this is your homework assignment. This is how I want you to get into the tail end of January, 2024, is by doing these things.

And honestly, if you follow this recipe, if you follow this formula, you are gonna start the year in really good shape with a clear vision of where the agency’s going, what work needs to be done, and everybody’s gonna be kind of tuned up and ready to go. So this is definitely an episode where you are gonna want to take notes, but also you’re gonna want to go to agency management Institute dot com slash 2024 planning. So I’m gonna talk to you about a bunch of different tools. We’ve got some checklists and some quizzes and some other things for you.

And on that page, so agency management Institute dot com slash 2024 planning, I’m gonna have all of these resources for you to download. Yes, they’ll be in the show notes as well. But this will make it easy. It’s a one-stop shop. You just go there, you download all of them, and you’re set. You don’t have to pay any money, you don’t have to give us a secret code, you don’t have to do anything. Just go to the website. You download all these tools. So this is gonna help us get ready for an amazing 2024. I know for a lot of you, 23 was a little brutal. And so our goal with this is to kick off the new year well and right, and with a clear vision of what we’re trying to get done.

Okay? So buckle up, ’cause this is gonna be a lot of different things I want you to think about. But when you add them all up, it is, it is a sort of a game plan for 24. All right? So that’s, that’s what I would call this episode. It is The agency owner game plan for 2024. All right, let’s start. What we’re gonna start with is you, we, you’re gonna start with why you’re doing this, what matters to you, how does the agency serve you? As you know, I’m a firm believer that if we’re gonna take all the risks and if we’re gonna stay up late worrying about making payroll, and we’re gonna worry about biz dev and we’re gonna worry about team members and we’re gonna worry about cash flow and all of those things that come with owning an agency, then we should also get the reward.

And so we’re gonna start with the very first thing I want you to download and do is called an agency owner life plan. And the reason why I want you to start with this is because this asks you questions about you. What matters to you? What do you wanna get out of the year? What is your focus for the year? You personally, not the agency, you. And so if you’re an agency leader or an agency owner, start with The agency owner life plan. And if you’re a leader, the plan works just fine for you too. But it’s gonna ask you questions like, who are the five people you should be spending more time with? What is the legacy that you wanna leave? And what are things, things you could do in this coming year to start the seeds of that legacy?

I don’t want you to get to the end of your career and look back and say, gosh, I wish I would’ve written my novel while I own the agency. I wish I would’ve built wealth outside of the business. I wish I would’ve taken Thursday afternoons off so I could spend time with my wife. Whatever it is, whatever matters to you, I want you to be really clear about what it’s, because guess what, we’re in a very rare position to be able to actually do the things that allow us to have a great life. Because we control our schedule, we control the business, we control how we take money out of the business. So start with agency owner life plan.

I want you to look at it. Probably what you’re gonna do is marinate on the questions for a day or two and then sit down in a quiet space and just answer the questions enough to show it to anybody. You don’t have to do anything with it other than it’s gonna force you or allow you, and maybe that’s a better way to say it. It’s gonna allow you to think through what really matters to you and make sure that you have room for that in your 2024 plan. Alright? So after you’re done with that, after you’re done sort of doing that introspection and, and sort of looking at what matters to you, the next thing I want you to do is the one page business plan. You know, so often agencies don’t have a business plan because it feels really onerous, feels like a heavy, heavy lift to put together a whole business plan.

And we’re thinking about, you know, the three ringing binder business plan. We’re thinking about the 25 or 30 page business plan with charts and graphs and data. I’m not talking about that. I’m talking about a, you know, your business, you, you can do one of those plans if you want, but honestly, you know your business and you know that the levers that if you move those levers, you could have huge influence on your business. And so that’s what I want you to do is this one page business plan asks you to identify some key growth areas, some huge hurdles, some big opportunities in some key areas. So what is the most important thing I could do around my finances?

What is the most important thing I could do around process and systems and getting the work done? What’s the most important thing I could do around my team? What’s the most important thing I could do around biz dev? All of those things. It’s gonna ask you for one thing that if you did that one thing in those key areas, it could be a stellar year for you. And you know what? Honestly, some of these things are gonna be holdovers from 23. Others are gonna be things that you’ve been thinking about. Whatever they are, it’s gonna ask you to identify what they are, ask you what obstacles are in the way of you getting to that goal, whatever that is. And then it’s gonna ask you for the first couple steps on how you get started.

But the most important piece of this business plan is down the left column and down the left column there are little lines. And what I want you to do on the little lines is I want you to rank in order of importance to the business or to you, which of those things comes first. So you’re gonna rank them one through six because we historically bite off more than we can chew. We start too many things. We start and don’t finish too many things. So what I want you to do with this plan is I want you to identify in order what matters most and then you tackle number one until it’s done.

And then you go to number two and so on. So I’ve got my owner life plan, I now have a one page business plan with prioritization because honestly this won’t work if you don’t prioritize it because you can’t do all, these are gonna be big things, these are gonna be important things. You can’t get it all done at once. And, and you don’t have to do this by yourself. In fact, you shouldn’t do it by yourself. Involve your leadership team, involve your whole team. Make this part of your, if you do traction or what we call agency edge, our version of traction, if you’re doing that, make these your big rocks for the first quarter or two but or prioritize them and start tackling number one, ideally before the holidays.

But if not, then after you get back from the the winter holiday. Alright, so got the over owner life plan, I’ve got my one page business plan. The next thing I want you to do is create a budget. I’m astonished at how many agencies do not have a budget. And so what it starts with is looking at what do I know for sure is coming in the door in the first quarter of 2024, extrapolating out the rest of the year based on history, based on pipeline, based on all the other things. And then making sure you’re in alignment. So remember you’re gonna have your gross billings, whatever you think you’re gonna bill everybody, you’re gonna subtract your cost of goods, which is all of your hard costs that you incur on behalf of clients, including contractors.

And then what’s left is your adjusted gross income. Your adjusted gross income, as you know, should be spent on people. So it’s loaded salaries and benefits, it’s overhead and there is profit. And the way that AGI should be divided is ballpark 55, 25 20. So 55% of your AGI should be spent on your people. 25% of your AGI should be spent on overhead and 20% should be left for profit before taxes. Now for some of you, your people are getting more and more expensive and your overhead is shrinking a little bit, right? Because maybe you’re not going into the office as much or you don’t have an office or you’ve just trimmed the budget.

So that’s great. But I want you to work with an 80 20. So 80% of your AGI should be spent on people and overhead 20% should be profit. Don’t steal from the profit if you have to steal to pay your people, steal from overhead, manage your overhead expense. So that’s budget number one. So, so once you do that, that’s, that’s the hard part is figuring out am I overstaffed? Am I spending too much on, on overhead expenses? The rest of the budget, you can go back historically and look over the last few years of what you spent on, you know, the car payments and the lawyer and you know, professional development, things like that. But budget for all of those things so you know where you’re at and you need to do that, do it annually and then break it down quarter by quarter.

In theory, you’re gonna have more money towards the end of the quarter at the fourth quarter than you are the first quarter. So you’re gonna wanna do an annual budget, but then you’re gonna kind of wanna go back and work it so that you are staying in budget for each quarter. So allow yourself a little more elasticity towards the tail end of the year when you’ve had more time to win new clients and grow the current clients but have a budget. Alright? Then the other thing I want you to do tied to money is I want you to pull the last six months of your checking account statements and your credit card statements. And your goal is to identify expenses that you don’t need.

And if you are on our newsletter, you know that this summer I told the story of how our accountant asked me a question about an expense, which led me down the rabbit hole of digging through our credit card statements and our bank statements. And I was horrified at how much waste I found software seats. We weren’t using anymore software, we weren’t using anymore donation that I thought was a one-time donation that turned out to be a monthly donation. So there were, there were just some ridiculous expenses and none of them were ginormous, but they added up to a chunk of change. So I want you to, to go through while you’ve got this quiet time, go through and eliminate.

So then I had to go and I had to email all these people and unsubscribe and change the things. so it actually took a while to get that done. But when I did, I saved a serious chunk of change. I mean it was tens of thousands of dollars that I was able to save or at least stop spending that we didn’t need to so that we didn’t keep spending it. So I want you to, I want your, your goal is to reduce your overhead expenses or those sort of incidental expenses by about 10%. And I think you’re gonna be surprised how easy that is to do so, and that may trigger other things like how you track software subscriptions and not other things, which I’m not gonna get into. But our goal is have a budget and then trim the budget.

And you’re not, I’m not asking you to trim to austere measures, I’m just saying stop paying for things you’re not using. Okay? Alright, so after that, then what the next thing I want you to do is we’re gonna turn our attention to our people. So that was big plans. Where are we going? Where am I going as a person? Where’s the agency going? What are the big boulders we need to move in 2024? And how are we gonna spend our money? Are we overstaffed? Now, if you’re overstaffed when you do the budget, that’s a whole different discussion you have to have with yourself, which I’m not gonna get into today. ’cause you know the drill, you know, you need to have $175,000 of AGI per FTE.

So if that’s not the case and you’re overstaffed, you need to make some decisions around that. But so owner plan, biz plan, and then we’re gonna do the budget and we’re gonna trim unnecessary expenses. So once we have that done, I want you to turn and I want you to start thinking about your people, your team. So first thing I want you to do is if you’re not doing one-on-one meetings, so what a, what a one-on-one, one meeting looks like is me the employee having a meeting with you, my direct report, my direct supervisor. So it may not be you, it may be a a department head or something like that. But every two weeks I sit down for 20 to 30 minutes and I have an in-depth conversation with my boss.

And the way the conversation always starts is, Hey Drew, what is your quarterly growth goal? What are you working on right now? What are you gonna get better at? One of the things that, we’re gonna talk a little bit about this in a minute when we talk about career pathing too, one of the things that we owe our employees is we owe them the opportunity to get better. We owe them the support to get better. And so sometimes support means some the time to do the class or get the certification or shadow somebody who’s good at something that we’re not good at. Sometimes it’s money paying for those things. But most important it is about the focus. It’s about making sure that our employees understand that it’s their job, it is their obligation to keep getting better.

That for all of us, if we’re gonna stay in this business and we’re gonna stay relevant, we have to keep getting better. So one of the conversations that every employee should be having with their direct supervisor is what is my growth goal for the quarter? And so every quarter I should be working on something to make myself better and more valuable to the agency, to my teammates, to our clients. And what that affords me is the opportunity to grow in my career. So the one-on-ones start with what’s your quarterly growth goal? And then it asks questions like, are there any red flags you need to tell me about with clients or team members? And it, and we have a form for this that the employee fills out and shows up to the one on one meetings with that form filled out.

If they show up with the form empty, send them back and ask them to reschedule the meeting. Make it very clear that this is their meeting to run and let them run the meeting. Don’t you run over the meeting? This is not a project review meeting, this is not you tell me what’s on your plate work-wise meeting, this is you. When you see the form, you’ll see this is a meeting about bigger things. It is about red flags. Is there any concerns around clients or the work Is there, are there things I could be doing as your supervisor to help you be more successful? Are you worried about any work that’s coming up? Do you need any extra support? It’s asking questions like that. And what you’re gonna find is, and and we hear this every day from agency owners that start the one-on-ones, they cannot believe how much more connected they are to the employee.

They cannot believe all of the things they hear about much earlier. So I’m a firm believer in no surprises. I don’t like surprise parties, I don’t like surprise presence. I don’t, I don’t, I’m not a surprise guy. But in business I really don’t want surprises. I want my employees to know that as soon as they get a spidey sense about something, we should be talking about it. And these one-on-ones really create the platform for those conversations. It also teaches your employees that every two weeks they’re gonna have your undivided attention for about a half an hour. so it, what they do is they start saving all the things that they want to talk to you about. So rather than pinging you all day, all week, they sort of gather it up for their one-on-ones.

So this will also tell you which one of your employees is in it for the career versus the job. The ones that blow off the one-on-ones, the ones that kin