"How do I grow my agency to £1m in revenue?"
It’s a question we get asked regularly. There is a common pattern. A talented suit/tech person/creative has gone out on their own. Work has come in, three or four people taken on and then they hit a ceiling. Everyone is working really hard, but somehow they can’t grow to the next level.
Some are thinking of moving to the next stage from the point of view of ambition or professional pride. Others are hoping to be able to realise some value from the business. So we thought we would pull together and share what we have learnt, helping businesses like that.
First of all, what you are experiencing is perfectly normal. Most communications and technology businesses go through stages of growth, which require some organisational change and doing some new things. If you have reached a ceiling, it will probably be temporary. You just need to step back, take stock and identify what you need to add, to set off on the next phase of your growth.
A good way to start is to think about your business and your life and how you want them to affect each other. If you don’t already have them, set out your personal life goal or goals and one or two business goals that would support them. This will help ensure that your business life supports your life overall and does not detract from it.
Next, carry out a business review. Pull together some data and some qualitative information on key aspects of your business. These aspects can vary a bit, but usually include: client retention and growth; product development; new client acquisition; levels of talent in your team; use of technology and profitability. Having some data is always helpful, it often changes how we view the progress of our business.
After your business review, you will be ready to set your growth strategy. It could be growing existing clients, developing products that will give you a regular, monthly income, moving to value based pricing or assembling a portfolio of new clients. Setting out the strategy helps you to focus on what drives revenue growth and saves time stopping doing what doesn’t.
When your growth strategy in place, think about what our need to do to develop your team. In particular, identify what you should be spending more time on to grow the business. Prospecting new clients, perhaps. And what you can delegate to someone else. Finance and admin tasks, for example. Start to build the new team structure. And think about any strengths in team members that you can accentuate. Get into the habit of identifying and playing to strengths. It’s motivating and drives employee productivity.
Grow revenue and generate recommendations through a structured client satisfaction programme. The questions should reflect your differentiated positioning. You need more than just a net promoter score question and they must be carried out face to face. It will help you retain existing revenue, develop loyal customers who want to buy more and produce string of ideas for new products.
Developing and launching new products represents a big opportunity for most agencies. Develop a long list of ideas, then rank them for impact on margin (rather than revenue) and being retained (rather than project) in nature. Allocate responsibility for new product development and aim for 10% of revenue each year, from products launched the previous one.
Engaging with new clients the right way is important. You are probably good at this already. Aim to move away from competitive pitches. They are a symptom of commoditisation of our industry, waste your money and depress margins. Target clients who will enhance your portfolio, improve margins and who you and your team will enjoy working on. Easier to say than do, but it’s easier to do when you are small than big.
Finally, maintain momentum by analysing performance vs. your KPIs and by extending your strengths. Take time out every quarter to look at actual performance vs. your KPIs. Understand the reasons behind the variances, your options to improve performance and adapt your approach accordingly. Complement this analytical approach with an intuitive view on what are the strengths of your team and how you can motivate them to new highs.