Episode 369

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Fear is a familiar feeling in agency ownership. It’s easy to feel like you don’t know what you’re doing or might be missing something important, especially if you’re doing it all yourself.

In this episode, I’m delivering advice on how to conquer the biggest agency owner fears in a Collabs & Cocktails event hosted by Predictive ROI. Whether it’s imposter syndrome, money worries, figuring out how to manage employees, or learning how to collaborate with other agency owners, I have some advice that will help ease your mind and get you back to focusing on the important things.

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 ownership

What You Will Learn in This Episode:

  • The four biggest fears of agency ownership
  • How to eliminate money fears by running things by the numbers
  • Taking care of your employees so that they stick around
  • Why you shouldn’t operate on only referrals and word of mouth for biz dev
  • The importance of becoming an authority in your industry
  • Generating right-fit leads
  • Navigating imposter syndrome
  • The right way to collaborate with other agency owners

“The minute you understand agency math and how to think about your gross billings minus your cost of goods equals AGI, every agency on the planet can be profitable at 20%.” @DrewMcLellan Click To Tweet “If you have an area of expertise and you generously share that with content, being an active participant, and helping other people in the room, the minute you start doing that, you begin to build a reputation.” @DrewMcLellan Click To Tweet “No one has all of the answers. When you are clear about who you serve, how you serve them, and are trustworthy and transparent with your team and clients, you don't have to know it all.” @DrewMcLellan Click To Tweet “I will tell you that referrals and word of mouth are not a way to grow a business.” @DrewMcLellan Click To Tweet “I welcome a bit of nerves because it means I care and am committed to doing a great job.” @DrewMcLellan Click To Tweet

Ways to contact Drew McLellan:

Resources:



Speaker 1:

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 what you make. The Build A Better Agency podcast, presented by White Label IQ, is packed with insights on how small to mid-size agencies survive and thrive in today’s market, bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McClellan here from Agency Management Institute. A bit of a twist today with the podcast. So, first I want to remind you about something and then I’ll tell you a little bit about the twist. So, next week is my solo cast. As you know, every fifth episode, if you’re a regular listener, is a solo cast. It’s just me chatting with you about something that is on my mind, and at every solo cast, we give away a free seat at one of our workshops. So, those seats, depending on if you’re a member or non-member, range from about 1700 to $2,000. So we’re giving away a $2,000 prize, all you have to do is get to the workshop and our workshops are all in Denver or Orlando. Orlando in the winter, and Denver in the spring, summer and fall. Anyway, the way you qualify to win one of these free workshops is, you need to go wherever you leave ratings and reviews for podcasts and leave a rating and review for this podcast.

And then, what I need you to do is, I need you to take a screenshot of your review and email it to me at [email protected]. And the reason I need you to do that is because, most of you have some sort of a username like Biker Chick 203 for your podcast accounts. Depending on where you download them, it might be your Gmail account address or it might be something more interesting about you personally, but whatever it is, I don’t know what agency you’re at and I don’t know how to associate those reviews and ratings with an email address. So I don’t know it’s you and I can’t notify you if you’ve won. So again, go wherever you go. So, Apple, Podcast, Google, iHeartRadio, wherever you download this podcast from, just go and leave a rating and review, take a screenshot of it, email it to me at my email address, again, drew @ agency management institute.com, and you are eligible for the drawing.

So if you do it this week, because I draw right before I record the podcast and I’m not going to do that until probably, the weekend. So, you have a whole five or six days to do that and then you’ll be in line. You’ll be in the drawing for this very next win. If you’ve already done it, you don’t need to do it again. Your name stays in the pot until you win. But if you haven’t done it, this is a great time to do it because it’s going to get you in right before we do the drawing.

All right. So, with that, let me tell you a little bit about this podcast. So, on October 20th, I was the guest host at a predictive ROI event called Cocktails and Collaboration. And what they do is, once a month, they basically have a very informal, you could call it a webinar, but it’s really just a virtual gathering of agency owners and they just talk about whatever’s, sort of, on their mind. And this event is led by Megan and Hannah, who are both on the predictive team, and for the most part it’s sort of a free for all, just a conversation about what’s on people’s minds, what are they working on, what are they worried about? And people enjoy either a cocktail or a mocktail or whatever they want, while they’re chatting because it’s at the end of the day.

But anyways, so what they decided is, they wanted to have a guest on their October event and they themed it all around agency owner fears. And so they asked me if I would host, which I was obviously pleased to do and we had a really great, probably 60 to 75 minute conversation. The first 20 minutes or so, are me talking about common fears that agency owners have or worries that they have and how I think they should tackle those fears and worries.

And then it was really a Q and A around all kinds of fears and other agency topics. So, I think you’re going to enjoy listening in on the conversation. I think you will find it packed with good actionable items for you to put into play. And I hope you’ll enjoy it too because it was also entertaining. I happened to be in London that week and so, it was 10 or 11 o’clock pm my time and it was sort of crazy because I didn’t have a great internet connection in our room.

And so, you’re going to see people walking behind me because I was in the members only section of the hotel, which was closed but people could still come up and grab things out of the refrigerator. So you’re going to see people walking behind me to grab a soda. I think at some point in time Danielle brings me a cocktail. So, it’s a little more informal than normal, but I think you’ll find the content itself super valuable and I’m happy to be able to share it with you. And I’m grateful to the folks at Predictive that they allowed us to record it and to share it with you, my audience, as well. All right, let’s get to Cocktails and Collaboration. All right?

Megan:

So, I just want to welcome everyone to Collabs and Cocktails. Hannah and I host this once a month and we alternate choosing topics that we feel passionate about and today, we have a special guest that’s helping us. But I just want to say that we hope this becomes an open community where you feel heard, supported, and most importantly, we have fun. And I’ll hand it over to Hannah.

Hannah:

Yes, and for those of you that this is your first time, obviously, this is our Halloween edition, so we don’t typically wear these things but we could if it’s popular so it’s still up in the air.

Drew McLellan:

I like that.

Hannah:

Yes, thank you Megan. So yes, Collabs and Cocktails. We do this once a month, as she said. And we do have our special guest, Drew McClellan from Agency Management Institute. I’m sure I don’t really need to do much introduction because all of you are familiar with him at this point, but he is here blessing us with his presence because he is all the way in London right now, where it is actually 10:06 PM.

So, thank you Drew, again, for being here. We asked him to do our special Halloween edition of Collabs and Cocktails because he talks with agency owners every day, all day, right Drew? Pretty much all the time.

Drew McLellan:

Every day, all day. I was just texting with someone. Yep.

Hannah:

Yes. So, he has really great insights on some of the fears that you guys face, some of the hurdles that people have overcome. So, he is here to talk about that with us today. So, we’re super excited that he’s here.

Drew McLellan:

Thank you. So, a couple housekeeping rules.

Number one, I am in London and if you just came on, our hotel room is at the very end of a hallway where the internet connection is like dial-up in the late 90s so, I’m sitting in the members only club that they’re letting me use that’s closed but you’re going to see people coming behind me because behind me, is all the free booze that their members are allowed to have. So I don’t know who’s going to show up so we’ll just let them do that.

Feel free to ask whatever questions and just because we’re recording this, seriously, don’t pay any attention to that at all. Let’s just talk like we would normally talk. So, I was thinking about this topic, fears, and I think I would bucket the fears that most agencies have, into three or four buckets.

The first one is money fears. When you start out, it’s, “Do I have enough money to make payroll? Am I going to be able to pay myself? God, I could have made more money bagging groceries than I am doing this.” All of those sort of fears. And then the fears get more complicated as you get a little bigger, and you start thinking about whether or not you are charging enough, whether or not you are paying your people well, whether or not you’re going to have enough money to make payroll every month, are you profitable as you should be? I’m going to tell you the buckets and then we’ll go back and talk briefly about some solutions to those buckets and then, we’ll just open it wide up and we can talk about whatever fears that you’re experiencing as an agency owner or leader. And we’ll try and shoot as many of them down as we can.

So, the first one’s money. The second fear is around people. A lot of you haven’t managed people before. Managing people in the best of times is challenging. I think right now, with the pressures around salary and people being stolen from you day in and day out and the poaching, that gets really, really hard. And most agency owners just bust a hump to create this amazing culture and environment for their people, and we take it personally, when somebody leaves us for somebody else. I think going hybrid or virtual, if you were a brick and mortar agency before the pandemic, creates a whole bunch of new fears around culture and the stickiness of employees. So, I think that’s the second bucket. I think the third bucket is the biz-dev bucket, which is, “How are we getting clients? Are we doing this the right way? Hey, you know what, we live on referrals and word of mouth. Gosh, the phone isn’t ringing, that makes me anxious. How do I get the phone to ring?”

As you know, Steven and I spent a lot of time writing the books all with authority around the way that you don’t have to sit around and wait for the phone to ring, that you can actually generate leads. Right fit leads for your business by being a thought leader and holding yourself out and being super helpful all the time and doing things like that. And then the last bucket is actually, I think the biggest bucket. And I call it the… I’m sorry, I’m making you anxious. I’m seeing the comments. Crap. Everyone breathe. We all have these fears. It’s okay, we’re going to do a big group hug. Yeah, somebody said take a drink. That’s right. I’m all about that. The fourth bucket, I think, is the biggest bucket. And I think it’s the bucket that actually is the one that’s most haunting to people, which I call the, “When you look in the mirror” bucket and that’s when imposter syndrome comes in, that’s when you think somebody’s going to find out, “I don’t actually know what I’m talking about.”

That’s what it is. That’s what it is when you feel like they’re going to figure out, “I’m actually winging it,” whether it’s the employees or the clients or the prospects. “Do I have enough? Can I give enough? Am I spending my time?” You just self doubt yourself to death. And I think that actually, is where most of the most onerous fears live, is in that bucket, but all four buckets are legit. And you may have categorized your worries in a different way, but those are, I think, the four buckets. Really quickly, I’m just going to talk for two minutes about each bucket and how I would resolve some of those fears. And then, I want to just open it up and let you guys chat at me. Megan and Hannah, I am not watching the chat unless something pops up so if somebody wants to stop me, you guys will have to interrupt me.

So, the first one, the money bucket.

You know what, I’ve been doing this for a long time now. My own agency is almost 30 years old and I’ve been running and leading AMI for 15 years and I will tell you this, that the minute you understand agency math and you understand how to think about your gross billings minus your cost of goods equals AGI, and that’s the number that matters to you. And how you start to monitor and manage to those numbers, every agency on the planet can be profitable at 20%. I’ve seen it during the great recession, I’ve seen it during the pandemic, I’ve seen it during the quiet resignation, I’ve seen it through all of the seasons, good and bad. And it really is about understanding the numbers and it is about monitoring your business by the numbers. So, at AMI, we collect everybody’s finances.

I’ve see everybody’s P and L and balance sheet and all the secrets. And our agency’s year end 2021, averaged almost 18% profit. Not because they’re a part of AMI, not because of me, but because they know the numbers and they are forced, with love and respect by me, to manage their business by the numbers. And so, I will tell you whether you have one full-time person, whether you’re a single entrepreneur, whether you have 300 people, you absolutely, if you run your business by the numbers, can eliminate 99% of your fears because you’d know, in five minutes, if there’s trouble and then you dig into the number that’s not right and then you figure out where the trouble is. So, a lot of the money fears are out of ignorance. We teach this workshop called Money Matters every December and people will walk up to me and will say, “Well, I’ve owned my agency for 20 years, I didn’t know any of these numbers.”

These aren’t things you’re going to learn in an MBA program. They’re not things you’re going to learn as an employee of most agencies, but they are the critical numbers. And there’s probably five or six metrics that, when those metrics all line up, everything is in good shape. And then you can sort of go, “Okay, I can put those fears away, I can look at the data and know that we have enough money in the bank, we’re going to be able to make payroll, I’m saving for taxes so I don’t get creamed at the end of the year.” All the things. So, that’s how I would deal with the money problems is, it’s factual, it’s really data driven and you just need to know it.

The people issue, I will tell you, is a communication issue. I don’t care how much you talk to your employees or what you tell them, they crave more from you. So, when we teach the AE bootcamp, one thing that we’ll hear from the AE’s is, “I really want to help the owner achieve all of the goals that they are shooting for, I just don’t know what they are and I don’t know how to help.” Or you have these vague conversations, “Hey, everything’s fine,” or whatever the conversation is but you don’t give them any raw data, you don’t give them any facts to chew on, you don’t give them metrics to help you move.

You’re not teaching them how to run a business well, which honestly, is going to serve both your clients and your agency. So, number one is that, and number two, I think the reality is, we have unrealistic expectations for our employees. They’re not all going to stay forever. And so, we have to get over the hurt of that, as much as it is painful, but they stay longer when they feel like you actually understand them, know them as human beings, connect with them, care about something more than their work output. So, that their mom was sick or their grandma summer or winters in Florida or they got a new puppy or whatever it is. When you connect like you do with people in the rest of your world, that matters.

And I’ll tell you the key to that in our one on one meetings. So, meeting with every employee… And might not be, might have a big enough agency that direct reports are going to do this. So, meeting with your direct reports, whether that’s your leadership team, whether that’s your entire agency, whatever it is, meeting with them once every couple weeks and following a format that’s not a traffic meeting, that’s not about the work, but it’s really about what they need from you, what they’re worried about, what red flags they’re seeing either with your staff or with clients, what they aspire to, what they’re trying to learn, how you can help them learn. Those kind of conversations are magic because they’re very human to human. They’re very much about you as a leader, letting them own that meeting and talk to you.

And when they know that they have your attention for 20 or 30 minutes, guaranteed, every other week so much… I have never had an agency owner start one to one meetings that didn’t call me and say, or text me or email me and say, “You know what? This was a game changer for me. I had no idea. I had no idea she was worried about that or that he needed my help around that.” So, they’re just really, really great for creating connections that are sticky because every one of your employees, even if they suck, every one of your employees is being poached today. Every single one of them is getting messages on LinkedIn and other things.

So, you can’t worry about, “Is my person going to be poached?” Because I’m telling you, they’re being poached. The question is, “What am I giving them that makes them turn down more money or something different? Am I giving them more opportunity? Am I giving them more leadership role? Am I giving them more mentorship? What am I giving them besides a job and a paycheck that’s going to make them stick around?”

Megan:

Would you recommend that owners know the love languages of their employees to try and keep them?

Drew McLellan:

Yeah, except for the physical touch one, we’re not allowed to do that.

Megan:

That one translates to something [inaudible 00:16:29]

Drew McLellan:

Right, right. I’m just saying. Yeah, yeah, yeah. I think it’s great to know how your employees… Some employees, if you praise them in front of the entire team, they would crawl under their desk and die. Other people are like, “They have not mentioned my name in five minutes, what’s going on?” So, I think understanding who your employee is and how they like to be recognized, for sure. But I will tell you, every employee, whether it’s their primary love language in their other relationships or not, words of affirmation from you is huge. You catching them doing things right and acknowledging it, again, based on their personality, privately or publicly, is a huge deal. And you know what? I think it’s even harder in the environment that many of you are working in today, with this Zoom and scattered and dispersed employee base but you’ve got to know. So, in my age, this is not my gift.

I have a hard time knowing what I’m doing, let alone what everybody else on my team is doing. So, I have spies in my agency and in my company because, I guess, they do both things now. I have spies in my company, I say, “You know what? I hardly ever work with so and so, when they do something great, I need you to tell me so that I can acknowledge it.” There’s nothing wrong with cheating, but you need somebody feeding you the information if you’re not working with them every day and you’re not hearing it. So that’s people. And then there’s biz-dev and Steven and I can beat this horse to death, bu