I want you to see what the ideal agency looks like and I want you to see the gap between what that agency is and what you have.

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Hey everybody, Drew McLellan here from Agency Management Institute coming to you from my home. You know, I have been having a recurring conversation with many agency owners over the last couple of months and that conversation has been about the utilization of their team. And in some cases, they have employees that are so buried with work, that they’re working 10 and 12-hour days, and in other cases, they have employees that they can’t really fill their plate. And so we’ve gone through a very interesting exercise that might be helpful for you if you are facing the same challenge. What we’re doing is we’re saying, “Okay, let’s look at the clients that you have on the roster, the projects you have, your projected AGI. And so we’re going to use the projected AGI to tell us how many employees you can have.” Remember the rule of thumb is $150,000 of AGI per FTE. Remember the rule of thumb is $150,000 of AGI per FTE. So, let’s say your AGI suggested that you could have 10 employees. So now the game, if you will, the project is that we have to build an agency from scratch to best serve the clients and projects that we know that we have. So, we’re not going to think about historical, we’re not going to think about what we used to do, we’re just going to look at the work that we have and we’re going to say, “Okay, what do we need to build? If we were starting an agency from scratch, what would we build to service that agency? And what of those skillsets would we want full-time in-house? And what of those skillsets would we contract out?” So, when you build that out, one of the rules is you’re not going to be able to keep any of the employees that you have, so you don’t take that emotional attachment you have to an employee and sort of lay it, that bias on this exercise. So it’s just, I’m going to have to hire all new people, so what skillsets do I want or need? And when you map that out, first of all, what you’re going to see is it’s very clean and it makes perfect sense that yep, these are the skillsets or the people that I need in-house and these are the skillsets I need to augment my team with, with a contractor relationship. Then you need to look at the ideal agency you build compared to the agency you have today. And what you’re going to see in most cases is you have some seats on your bus that you don’t need anymore. Or maybe you have three seats on the bus and you only need one. That’s often happening sort of with graphic designers and art directors. So you need to then look at the ideal agency versus the agency you have today and you need to decide how to close that gap because what you can’t afford to do is you can’t afford to have two or three people on your team who are not fully utilized, that are not, they don’t even have the opportunity to have enough billable hours, let alone that they want to have the billable hours. The challenge with this, of course, is that we’re talking about human beings, people who have been loyal to you, who have been a part of your agency for a long time. And so I’m not suggesting that this is easy and I’m not suggesting that you don’t go into this with a kind heart, but I do think you need to understand what you have in your shop that you don’t need anymore and then put together a plan. So maybe you offer to help someone get some new skills and to occupy a different seat on the bus that right now is empty, that based on your new agency org chart you know that you need. Or maybe it’s time to talk to somebody about going from a full-time employee to a contractor relationship. Or maybe it’s time, in some cases, to simply thank someone for their service, put together a great severance package and let them go and find a job where they actually can contribute in a significant way because they’re not doing that in your shop anymore. But, just start with doing the exercise. You don’t have to decide to change your agency at all, but I want you to see what the ideal agency looks like and I want you to see the gap between what that agency is and what you have and then you can make some decisions about whether or not you want to close that gap, but it starts with first understanding that there is potentially a gap and then you can decide what you want to do about it. All right? Hope that’s helpful. I’ll see you next week.

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