What I’ve Learned About Growing An Agency By Talking To Hundreds Of Agency Founders
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This article is tailored for new agency founders whose 2019 resolution is to set up better processes and grow faster.
Even if you’re coming from a larger agency it still might be interesting to read which mistakes you’ve probably made in the past and see if you’ve stopped making them.
Often times, when speaking to prospective customers, I hear interesting comments about their motives for making certain business decisions. I’ve compiled three of the most common mistakes I run into, and that we’ve made in the past too.
#1 “Our clients need time sheets.”
What your clients want should never be the primary motive for adopting any business practice – time tracking included. You need to do it primarily for the benefit of your business.
Most tools you’ll be looking at can log time very well, but what is their added value? You’ve tried a couple of simple apps, found the one that feels right and implemented it as fast as possible. Great, your clients will now get detailed time sheets – you’ve solved their problem. How did any of this benefit your business in the long run?
Always remember that at the end of the day you need to be profitable, because if you’re not, you won’t be in business in a couple of months. Understand that time is (usually) the only thing you’re selling. Every hour brings in revenue and, equally important, generates cost.
Having a detailed time sheet means nothing if you can’t easily analyze the financial impact of that time on your business. So, you haven’t really solved anything, you’ve just patched up a problem for the time being. I guarantee this is going to bite you in the ass down the line.
Think of the big picture. Don’t get tools as quick fixes. Think of the short term and long term impact of these decisions on your agency.
#2 Premature optimization
Every founder’s long term goals should be to grow, hire and get more serious clients on board. Premature optimization is one of the best ways to make sure none of that ever happens. Stop trying so hard to optimize your internal workflow with 2-10 people. Remember, this is where you are now, not where you are going to be tomorrow.
How densely a team member’s calendar is filled with tasks from 9:30 AM till 12:45 PM is not important – stop focusing on trying to do something like that. As the business grows, you will need to spread management responsibility across team leaders. Trust those people to do a good job and you’ll be surprised with how well they do.
Don’t over complicate things. Understand that what you can keep under control now is not something you’ll be able to do when you grow to 20, 30, 50 or more people. Clients care about results, and if you can deliver without creating too many bottlenecks internally, this is only going to allow your company to breathe and grow easier.
Always remember, you don’t need to micromanage everything to ensure that a job gets done. If you need to let someone go because they’re underperforming, looking at their billable utilization is usually more than enough to make such a decision. Not being involved in everything will quickly show you how well the team performs independently.
#3 “I need to plan in everything.”
Apply a bird’s eye view and look at your projects from a business perspective. When you sell services to your clients, you’re mostly selling core competencies.
For example, you’re a small studio and you’ve sold 20 hours of design to your client. The fact that these 20 hours are actually split up into a lot of smaller tasks does not matter strategically. These 20 hours of work will be done by your designer in the foreseeable future – that’s all you need to know.
If well instructed, your designer should be able to deliver without being planned in for each individual task. Let him do his thing. If the job isn’t done on time, look to your project managers and the designer himself. Being more responsible is a part of growing up, and we’re all grown-ups here.
From the perspective of planning, managing agency capacity and making sure there’s enough food on the table, you need to think strategically. It’s hard enough to plan which projects your people will work on, especially if you take into account vacation or sick leave. Stop complicating your life further by trying to plan in hundreds of tasks which get moved around constantly anyway. You will end up going nowhere.
It’s hard to loosen the grip when your company starts growing.
You want to keep doing what you’ve been doing to ensure things keep heading in the right direction. To a degree, you’re right, but it can’t be that way forever. Trust your team members, be more lean with how you manage their time, and let things happen naturally.
Focus on important metrics and keep your team members happy. Get the right tools. Implement strong, but lean processes that are aimed at helping your business thrive, instead of bottlenecking it completely with unnecessary workflows.
Be the agency people dream of working at, and existing employees don’t ever want to leave.