Episode 11

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Before Trent Dyrsmid started a digital agency called Groove, he founded Dyrand Systems, a managed IT service provider that was recognized twice as one of Canada’s PROFIT Magazine’s 100 fastest growing companies. During his 8 years as CEO, Trent was fortunate to have been recognized as one of the Top 40 under 40 business people in Vancouver, B.C.

In addition to overseeing Groove, Trent is also the host of the Bright Ideas podcast, where he regularly publishes interviews with some of today’s brightest entrepreneurs.

 

 

What you’ll learn about in this episode:

  • Trent’s journey into entrepreneurship, leaving to become an employee, and his return to being his own boss
  • Why Trent created Bright Ideas and Groove Digital Marketing
  • The importance of creating a business that works within a niche
  • Generating leads through a lead magnet
  • Why you should be targeting leads on Facebook
  • How to make your agency more valuable by creating systems and getting out of the client work
  • What’s next for agency owners that have successfully built the systems that allow them to take a step away from their agency
  • Action steps for putting in place the topics discussed in this episode

 

The Golden Nugget:

“If as the CEO you're doing client execution, you're the biggest bottleneck.” – @TrentDyrsmid Click To Tweet

Click to tweet: Trent Dyrsmid shares the inside knowledge needed to run an agency on Build a Better Agency!

 

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We’re proud to announce that Hubspot is now the presenting sponsor of the Build A Better Agency podcast! Many thanks to them for their support!

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome Build A Better Agency, where we show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus us years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody. Thanks for checking out this episode of Build A Better Agency. I am Drew McLellan, and I am raring to go today. This is a topic that I love to talk about, and I know that every agency on loves to explore as well. It’s all about growing your agency and how do you scale that so that you can get bigger and better.

Remember that Build A Better Agency and this podcast are all about helping agency owners, just like you, do it a little bit better so you can make a little more and worry a little less. And today’s guest is absolutely going to help us there. So Trent Dyrsmid, I had to practice saying that a couple times. Trent, did I get it right?

Trent Dyrsmid:

Close enough.

Drew McLellan:

No, no, Dyrsmid, right?

Trent Dyrsmid:

Dyrsmid.

Drew McLellan:

Dyrsmid, right. Okay. Anyway, my friend Trent, who I cannot say his last name, he started a digital agency called Groove, but prior to that was a founder of Dyrand Systems, a managed IT service provider that was twice recognized as one of Canada’s PROFIT Magazine’s 100 fastest growing companies. During his eight years as CEO there, he was fortunate to have been recognized as one of the Top 40 under 40 business people in Vancouver.

In addition to overseeing Groove, which he still runs today, he is also the host of the Bright Ideas podcast, where he regularly publishes interviews with today’s brightest entrepreneurs from all over the globe. You can find that podcast at brightideas.co. Trent, welcome to the show. And thanks for being willing to share your time with us.

Trent Dyrsmid:

Yeah. No problem, Drew. I’m super stoked to be here. As I mentioned to you before we hit the record button, I actually haven’t recorded an episode in quite a while. So this is my first time back on the mic probably in about six months and I’m super stoked to do so.

Drew McLellan:

Well, welcome back.

Trent Dyrsmid:

Thank you.

Drew McLellan:

So we’re going to jump all around today because as you and I talked about before we hit the record button, you’ve had an interesting career. So I would love for you to sort of help folks on understand sort of where you’ve been and where you are heading so that they can put our conversation in context.

Trent Dyrsmid:

Sure. So I started my career, and I’m going to make this real short because I didn’t want to bore people, started my career as a sales guy working for other companies. Was pretty good at it. Sold lots of stuff, made lots of money. And in 2001 thought, you know what? I really don’t want to do this anymore. I want to run my own show.

So try to do a startup, got a bunch of money, about 100 grand from an investor, failed, because the dot-com crash crashed. And then was sitting there kind of thinking, “Ooh, now what am I going to do?” And so I thought to myself, well, I’m going to start this IT professional services company, because I knew a guy who was kind of technical in nature and I figured I could get the customers.

And because it was a professional services company, we didn’t need any startup money from investors, so I could get the doors open and off we went. So did that, and over the eight year period it was an amazing journey. We started off just as a break fix shop where you charge per hour and there’s no leverage, no scale and no profitability in that model.

And very quickly adapted our model to that of a, what’s called a managed service provider, which is kind of like what a marketing agency does. We collected retainers and we delivered a statement of work, so consistent service delivery. And because it was IT, we could automate a fair amount of it.

And the thing that I think I was really good at with that business, because I didn’t know any of the IT stuff, was I was good at working on the business as opposed to in the business. And I got it by the end to the point where my business partner who was a minority shareholder and the team of technical people that we’d hired pretty much were running the show every day.

And so I sold the company… And he and I after eight years, we were kind of tired of each other. So he and the COO put together their money and bought me out in late 2008. And that was an amazing, there was two really intense emotions I experienced one like, “Whoa, wow, I just sold a company and I’ve got this bag of money.” Although, it wasn’t a bag of money.

It was more of a stream of payments over four years, but still it was pretty nice. But then I kind of was like, “Holy crap, what am I going to do now?” Because I didn’t have enough money to just do nothing forever. I was only 38 years old at the time. So three quarters of $1 million is not that much. So then I kind of struggled for a few years, to be honest with you.

I mean, I took some time off and smelled the roses and grew my hair along and learned how to surf and all that kind of stuff that you’d expect someone to do. And then I discovered this world of internet marketing. I met someone who was a surfer, was making all this money doing affiliate marketing. And I kind of got sucked into the weeds of affiliate marketing for a few years.

And I did pretty well at it, but then Google, as they do, they keep changing their algorithm and it put me out of business. And so that was kind of a big wow. Here I was this supposedly super successful entrepreneur guide that just got creamed. I didn’t feel very good. And so out of the ashes of that, I created my sight Bright Ideas and I created the podcast and I went on this mission to interview as many other entrepreneurs as I could.

And that all sorts of amazing things started to happen when I started to do that, of course, I learned a lot because that’s a lot of great free consulting. I built a pretty big audience. The podcast became fairly popular. And it monetized reasonably well. It was a six figure a year business, but not nearly as well as what I could have done if I had done a few things differently.

But what happened out of that is eventually, of course, when you have an audience and they like you and trust you, they reach out to you and they say, “Can you help me?” And initially I resisted, I didn’t want any clients, but then I got married and my wife also an entrepreneur, I thought, oh wait, I could get her to do all the work. So we decided to form Groove Digital Marketing.

And so we just take the leads that we were generating from my stuff, and people would buy Infusionsoft or they’d get us to help them with a website or whatever it was. And we did that for a while and then a really big client, big relative to what we were dealing with, came along, again, as a result of the content that we were producing. And that client sort of we just focused on them because it was quite a bit of money and we just didn’t want to be distracted.

So Liz, my wife, pretty much was running that show and that’s been about a year in change and I’d built all the systems and we recruited a team of virtual assistants and writers and editor. And so we had a virtual agency because we really run it out of the house. And so it’s very lean, it’s very profitable because the overhead is very, very low. And then, well, so I didn’t really have anything to do because she was running at all.

So I thought to myself, I’m going to go to this Dreamforce thing which Salesforce puts on. And I kind of got all excited about working for Salesforce because they’re this big company and I thought, well man, I could probably make quite a bit of money. I’m a sales guy, I could do that. And I went to work for them for six months in the first part of 2015 and I absolutely hated it. And I put my Bright Ideas podcast on hiatus at that point in time.

Because I figured I could make half million bucks a year selling Salesforce software, and I wasn’t making half million a year running my podcast. So I thought, well, that’s cool. I’ll try that. Anyway, if you’re an entrepreneur, don’t ever go to work for anybody else. It was horrible. Even though they let me work from home, I hated it. I absolutely hated-

Drew McLellan:

I have always said that I’m guessing that entrepreneurs were bad employees before they started their business. But after you’ve been self employed for a while, I think we would be abysmal employees.

Trent Dyrsmid:

Yeah. I mean, I had a boss who had a boss who had a boss who had a boss and the stuff that they would make us do was so in conflict with my beliefs and my values about how you would go and get customers that, again, having been a boss for eight years, I’d pretty much told my boss, I said, “You’re on crack.” I said, “This isn’t going to work.” And eventually he didn’t want to hear that anymore.

Drew McLellan:

Yeah. Yeah. Isn’t that funny how when we’re the boss, we don’t want to hear it from our people, but we sure want to say it when we have a boss. So yeah, I think you are wise to come on back to the entrepreneurial side.

Trent Dyrsmid:

Indeed. And so in about June or July of this year, 2015, our big client decided they were getting ready to raise a bunch of money from venture capitalists. And they said to me, they said, “We don’t have a repeatable, scalable sales system. We’re just the CEOs bringing in the bacon, but we need to build a sales team. Would you build that for us?”

So I said, “Sure, I’ll give you 20 hours a week at the most because I wanted the other 20 hours to relaunch Bright Ideas.” And so they’ve just signed a contract with us to do that. And in addition to all the inbound marketing stuff that we were doing. So we’re in a very, very fortunate position where the agency’s really making quite a bit of money, but I only have to work about halftime and my wife works the other halftime, and between the two of us and our team of people we kind of get it all done.

And so then I thought, oh, I really want to relaunch my podcast because I’d seen some other people out there with their podcasts who are making millions per year. And I thought, they don’t know how to do anything that I don’t know how to do. I just needed to get more focused. And that was the big mistake. And no matter what business you’re in big, lesson right here, big mistake was not picking.

When I launched Bright Ideas the first time, I do did not pick a super focused target audience. Instead, I was just like, it’s for entrepreneurs. That’s too vague. It’s too hard to really stand out if it’s just for entrepreneurs. And so you really have to understand who you’re going after. And so I decided I was going to hire a coach for the first time in my entire career, who was a good buddy of mine, who I’d seen…

I should say good buddy, he found me because of my podcast. And I gave him some advice two years ago, and he took it and ran with it. In two years, he’d gone from, he’s an ex agency owner, his name’s Jason’s Swenk. If you’re an agency owner, you need a coach, Jason’s a brilliant guy. And you can get him at jasonswenk.com. Anyway-

Drew McLellan:

I did a podcast with him earlier, so the listeners will be familiar with him.

Trent Dyrsmid:

Okay. So he doesn’t publish his income so I won’t say it, but it’s a big number. And when he told me, I was like, “You got to be kidding me. That much from your jasonswenk.com?” He said, “Yeah.” And he says, “I only work 100 hours a month.” A month, not a week, a month. And so that was one of the reasons when our client of Groove said, “We want to hire you, Trent, to build this thing.”

And I said, “Sure, but I’m only giving you 20 hours a week,” because I wanted the other 20 hours to focus on relaunching Bright Ideas on a very focused target audience. And I’m testing this, of course, I might fail and have to pick a different one. But the target audience is entrepreneurs who have built and sold a business, like yours truly, and are looking for, what should I do next? Because I really struggled with that for a few years.

Drew McLellan:

So one of the things that you were doing when you were doing Bright Ideas before, is you were interviewing a lot of agency owners. And so I’m curious, as you stood back and are sort of the observer and you’re learning from all of them, what were they doing wrong that you were able to do differently with your own shop and that you would advise the listeners to think about differently?

Trent Dyrsmid:

I’d say there’s probably two things that really come to mind. Number one, and this is almost unanimously, I saw this. They did not pick a niche.

Drew McLellan:

Yeah. They actually avoid it like the plague.

Trent Dyrsmid:

Yeah. And the reason people don’t pick a niche is always the same. They think, well, if I make the homepage of my website saying I am a digital marketing agency for orthodontists, what about all the people who are an orthodontists? They’re not going to do business with me. So that’s the fear.

Drew McLellan:

Yup.

Trent Dyrsmid:

The reality is, is if you become a digital marketing agency for orthodontists, you’re going to have pricing power. You’re going to have way more traction than you could ever imagine. Because chances are, that’s a niche you can dominate. That’s a niche you can more than likely become the number one.

Like my podcast, I want to become the number one podcast for people who’ve built and sold a company and are looking for their next idea. I don’t know of any other podcasts that focus on that particular audience.

Drew McLellan:

Absolutely.

Trent Dyrsmid:

So that’s the first mistake. And the second one, and this is what I don’t like about professional services businesses. And this is one of the reasons why I’m not trying to grow Groove too much. And I know that sounds silly. Is take too many clients and have to hire too many people, because in a professional services business, the more people, at least in my experience after 10 years of doing it, the more people I hire, the lower my profit margin goes.

Drew McLellan:

Yeah. I think there’s a point where that flips, but I think it’s a challenge when you’re in that small size of five to 10 employees to really drive a lot of profit back to the agency owner.

Trent Dyrsmid:

Yeah. And you’re right, there is a point when it flips. But out of the people I’ve interviewed, the only ones who were successful in growing a really big agency started off with a marquee client. They had a personal relationship from a prior career and when they kicked the doors open, they had target as a customer. And I can’t from remember the names of the person who told me this, but he says, “Trent, I carried that around like a gold brick.”

Drew McLellan:

Oh my gosh. Yeah.

Trent Dyrsmid:

“Everyone that I talked to, target is my customer.” So you’ve got strong cash flow from the beginning and you’re able to hire talented expensive people from the beginning. Now, if you don’t-

Drew McLellan:

Well, any of the cache of that client, right?

Trent Dyrsmid:

Yeah. But if you don’t have target, if you’re just doing it in onesie-twosies, again, speaking from experience, you’re going to do a lot of activity. You’re going to be really busy and revenue will be okay, but your profits aren’t going to be that great until you decide to be super choosy about who you take. Like at Groove, if you’re not going to pay us at least a hundred grand a year on retainer, you’re not going to become a client.

And that’s why, we get lots of inquiries, but most of the time I just say no. And I refer you to somebody else because I know that a $30,000 a year client, I just know I’m not going to make that much money. We’ve got such a great lifestyle now, I’m not interested in having to work a whole bunch more to make a little bit more money.

Drew McLellan:

Right. Right. Right. So the niching is part of the challenge. And I think one of the other challenges is the whole idea of how do you scale? So thoughts about that based on your observations and your interviews and your own experience with Groove.

Trent Dyrsmid:

Yeah. Scaling can come from a variety of ways. So how do you scale? I guess if you’ve got that marquee client, you could potentially scale from… And there’s two aspects of scaling. There’s driving the revenue, AKA, getting the clients. And then there’s the systems. So let’s talk about the revenue first. Obviously, referrals, great source of scaling if you can make it happen.

If that’s not happening for you, you do need to build a repeatable lead generation system. And that’s where most people really struggle is lead generation. If they get a good lead, they can talk them into becoming a client, but they’re not getting the good leads. And that’s social media and content marketing. You need to come up, and this is exactly what I’m doing with Bright Ideas right now.

So you need to come up with a lead magnet. You need to come up with a landing page. You need to come up with a marketing campaign that is going to nurture those leads to the point where they’re what I call sales ready. And then you can do one of two things or both, create content that solves problems for that particular target market and publish it like mad, and or advertise on Facebook.

Advertising on Facebook of course costs, well, they both cost money. But at least you can get the traffic faster by, especially when you’re testing your niche to begin with, I would just put up the lead magnet and the campaign and then drive very targeted Facebook traffic to it and see how it converts.

And for every lead that you capture, talk to them, phone them. Even if you’re selling information products, people say, “Well, I don’t want to talk to them. I just want them to click the buy button.” No, phone them. Talk to them all. So that’s the first part on how you scale revenue.

Drew McLellan:

So I want to stay there for a minute.

Trent Dyrsmid:

Sure.

Drew McLellan:

So a lot of listeners are going to say, “I’m a B2B agency. Can’t use Facebook blah, blah, blah.” What do you say to those folks?

Trent Dyrsmid:

What I say is you’re ill-informed. I’ll just use this one example. I don’t remember the name of the manufacturer, but they make heavy duty equipment like CAT equipment. And they had a dealer network around the United States, and they had all this used equipment. And I saw a case study in this and I wish I could remember where, so please bear with me.

But by far, the way they sold most of their used equipment was Facebook advertising. Because that’s how they would get the leads, that would go to the dealers, that would then close the sale for this used equipment. Everybody is on Facebook and you can target.

I mean, if you have never logged in or you haven’t logged in recently to the Audience Builder, it’s freaky the amount of data that Facebook is collecting on all of us, and that the data is available to marketers to target your audience. Go check it out, is all I would suggest that you do before you form your opinion that maybe Facebook’s not the right platform for you.

Drew McLellan:

Yeah. It’s amazing what they know about us.

Trent Dyrsmid:

Yeah.

Drew McLellan:

Yeah. Yeah. Okay. So now we’ve talked about the whole idea of attracting the leads. Let’s talk about system, because that’s where I think a lot of agencies really bang their head against a brick wall.

Trent Dyrsmid:

Yeah. And not just agencies, any professional services company. And this was something that we did really well at Dyrand, my old company. And it’s one of the reasons why I was able to sell it for the amount that I was because I was able to make myself redundant. And it all started off with reading The E Myth by Michael Gerber. I mean, I consider that to be the playbook of building your systems.

And what you have to understand as a CEO is your job is to build, is strategy of course, but to build the systems and attract the people to run those systems to actually make the widgets. If you’re the CEO and you’re still needy in client execution and client meetings and sales and all this stuff, you are your biggest bottleneck, you’re your own worst enemy.

And I know that there’s a lot of CEOs out there who think, “Well, I’m the important person. I’m the one with the most experience blah, blah, blah, blah.” Again, if that is the case, and in your defense, as a professional services business, unless you have the marquee client or some meaningful revenue, it’s pretty hard to hire other talented people.

But if you are the most talented person at website or graphic design or copywriting or working with a client, I think that you’re kind of failing as a CEO. And so the way around that is to create systems. So I would use, we have a membership site where we have all this documentation. I have videos and screenshots. And literally, how to do everything that we do is all broken down and documented.

And then when we hire people, we don’t have to spend an ungodly amount of time training them by hand, we simply say, go read the manual, go watch the videos and do the task. And if they still screw it up, then of course they’re not qualified for the job and we get somebody else.

But having that standard operational procedure manual, and then just make it in digital format, is absolutely critical. And if you ever want to sell your business one day, hugely valuable because the buyer is going to take much, much more comfort knowing that you’re not packing all the knowledge just between your ears.

Drew McLellan:

Yeah. Right. That there’s a recipe book in the back of the kitchen. So anybody can make the food. It’s not that you the chef are the only one that can whip it up.

Trent Dyrsmid:

Correct. It’s like, treat your business like it’s a franchise. You want to buy Subways? People who buy Subways, they don’t generally go to work in them. I have a friend of mine, he owns 40 of the things. He doesn’t work in any of the stores. And he’s got operational. And I mean, Subway obviously creates training manuals. And then they layer their own stuff on top of that. But that’s how you need to think about a professional services business.

Because otherwise, how do you ensure a consistent delivery of your service? It would vary from person to person to person. And then customers are going to, as account managers change or graphic designers change or people change, your clients are going to go, “Well, it’s not as good as when Warren was doing it. I don’t like the way Wendy does it.” That’s why the systems are so important.

Drew McLellan:

Yeah. Well, and I think the big thing is for a lot of agency owners, and I’m talking about this all the time to the AMI agency owners, you diminish the value of your agency if you ever think you’re going to sell it, if your integral to the agency. That I want to buy something that doesn’t need you because I know the whole reason you’re selling it is because you want to go away.

Trent Dyrsmid:

Yeah.

Drew McLellan:

Yeah.

Trent Dyrsmid:

Yeah. I mean, for agency owners, I think the book to read is Built to Sell by, and I’m sure you know him. You’ve [crosstalk 00:22:39].

Drew McLellan:

Yeah. John Warrillow.

Trent Dyrsmid:

Is it John Warrillow that wrote it?

Drew McLellan:

I think so. It’s a brilliant book, but it’s also a wake up in the middle of the night in a cold sweat book after you’ve read because you’re going to see yourself in it and go holy buckets.

Trent Dyrsmid:

Yeah.

Drew McLellan:

Yeah. Yeah. Yeah. So it’s a great book, I agree. So when you were building your systems, it sounds great to have the videos and the book and all that, but how did you do it?

Trent Dyrsmid:

One step at a time, there’s no rocket science to it. First of all, you have to decide to do it and then you just think, well, what’s my biggest struggle. Or what’s on my desk that I want to get off of my desk? Well, it’s content creation or it’s lead generation or it’s onboarding a new client or it’s an account review. Anything, just pick something. There is no perfect way to do this.

And if you just pick something and start, then you’ll get something completed. And then that’ll feel good and you’ll be like, “Wow, that wa