A client recently asked me, “What are the top 10 things I need to be aware of as I grow my agency from $1 million to $4 million?”
First… why do you want to grow?
Before we get to the top 10, consider item “0” on the list—“WHY do you want to grow from $1M to $4M?” That’s a stress-inducing level of growth—30% a year over five years… and 60% a year if you want to get there in three years. Be sure this is the best way to meet your goals—you’re going to need the stamina to get you through the next few years.
10 places to focus as you grow fast
If you’re on board, here’s what to consider—based on my work with fast-growing digital agencies, including agencies on the Inc. 500 and Inc. 5000.
- Where do your current employees fit into the future agency? You’ll likely at least double your headcount as you grow, which means new roles. Do your current people have the potential—and the desire—to move into management positions? If there’s desire but not competence, start coaching people now.
- What’s the org chart for your future agency? Growth typically means adding (or expanding) an extra layer of middle management, so that you don’t suddenly have 20 people reporting directly to you. What might that structure look like? What are the gaps, and which people will you hire next?
- How will you organize the three client-facing roles (Account Management, Project Management, and Subject Matter Expert)? Agencies are increasingly using a “hive” or “pod” structure, where a group of people focus on a specific set of clients. You’ll want flexibility to assign your SMEs based on workload, but this approach helps you become an expert in each client’s business—which helps you retain clients.
- Where should you be experimenting today to build future revenue streams? In 2-3 years, agencies will be doing new things—and you can probably get more revenue from those new things than what you do now. An easy way to start is to create an “AgencyName Labs” program—where you pitch clients on 1-3 months of free help when you want to try out a new strategy or tactic. They get the benefits, and you see how it works—and get a case study if it works.
- Where—and how—will your new revenue come from? Revenues are always a mix of new clients and upsells from existing clients. You can’t grow from $1 million to $4 million on upsells alone, so you’ll need to grow market share in your existing markets—and/or expand to new ones. Find ways to get clients on retainer—the recurring revenue stream requires less sales effort than “new sale each time” projects.
- Are you committed to thought leadership in the right places? Leaders at top agencies are speaking at conferences and other events. Now’s the time to commit to speaking. Read my book if you need help. Smart agency owners encourage their employees to speak, too. It creates a risk if they leave—but employees leave because they’re unhappy, not because you gave them too much freedom. Consider whether to write a book, too—speaking is one way to show your expertise, but a book takes it to a new level.
- Do you have a consistent process for your agency’s own marketing and sales? If you want to grow, you can’t “make it up as you go.” You need to be doing self-marketing on a consistent basis—and it can’t rely solely on your individual efforts. You’ll hire a full-time marketing manager as you grow—it’s up to you to decide when to hire them. Likewise, you’ll need to formalize your sales process—including a sales management process to hold salespeople accountable—and marketing automation to tie it all together.
- Which clients will help you grow, and which do you need to fire? Some of your clients will help you grow—but others won’t. And you may need to move up-market to support your growth—think about your “Dream 100” client list. Keep in mind that bigger clients tend to have higher expectations—so figure out your processes before you dive in.
- Do your employees know how they fit into the future? When I do Culture Surveys at agencies, employees often say the agency’s future is bright—but they’re not clear on how (or even “if”) they fit into that future. If you don’t have answers—or a plan to get them answers as things evolve—people will quit. You’ll lose vital institutional knowledge, which will stunt your growth.
- How do you make time for your top priorities, as your priorities change? At $1 million in revenue, you’re typically deep in day-to-day operations. You’re often still the primary contact for your biggest clients. To grow, you need to focus on things that build the agency—working “on” the agency instead of working “in” the agency. This means delegating work to others, onboarding clients so they don’t expect you’re their primary contact, and hiring people to handle things you’re now “too important” to do yourself.
Question: Based on this list, what’s the first thing you’re going to change at your agency?