How to scale your agency without having to hire more staff
Author: Catherine Howell December 17 | Blog
When I first started my agency back in 2015 there was no one to hold my hand and show me the ropes. Like many, I was attracted to the agency model as it offered a low barrier to entry and meant that I could be my own boss with little to no setup cost – something many other industries can’t boast.
At the time I had been trying to launch an online website whilst working full time. I was so naive in what it took to succeed online that I invested over $30,000 building this site (it was a travel blog that sold customised passport covers) and spent a year getting it perfect. The day I launched, I literally thought I would be making millions within months, but instead, I experienced my first “failure” as an entrepreneur when only 5 people visited the site (three of them being my parents and sis, and two were from me).
What I didn’t realise at the time, and what I have since come to realise is that the hard knocks often come with incredible growths. My failed blog led to me developing my online marketing skills and a few people around me took notice. Next thing I knew I was being asked to help grow Facebook pages for businesses and had my first client.
I had unexpectedly fallen into the agency world.
And, much like my first failed attempted business, I was head in the clouds around what it took to actually succeed in this space.
Get some clients, hire some people, pay myself a handsome salary. Easy, right?
I wish I had known what I know now, what I’m about to share with you today – for I would have saved about $500,000 just from the learning curve process.
The first year of business I was generating about $5K/mth. I managed to scale this to $10K in year two and – while I was excited about this, the reality was that I was wearing a million hats in my business and there was no way I could take a weekend off, let alone take a holiday. Plus. at the end of the month – after taxes and expenses – I was often left with just $4K for myself (that’s New Zealand dollars, which is about $2.7K USD).
Every time I brought on some new clients, I’d try to hire to get help with the workload. They would drop the ball and I’d lose the accounts. My revenue was a yo-yo, completely unpredictable and certainly not something I felt confident enough to hire full-time employees with.
I was burning out fast and felt trapped (but what’s new – that’s probably why you’re here today).
Looking back now it’s clear that there were some missing elements in my business.
For starters, I lacked processes – let me rephrase that – I didn’t know what processes were or how they should be set up and therefore I had zilch in my business.
Secondly, I lacked a consistent and reliable lead generation pipeline. I was dependent almost entirely on word of mouth and referrals, which were so sparing that when I did get a lead I was so desperate for the cash (cause I didn’t know how long the lead drought would last) that I would take on clients that were just not a great fit.
I was also so afraid of losing that lead that I’d start discounting my prices.
The “ah-ha” moment really came when I started to think “hold up, if I can help my clients get leads and customers through Facebook ads (this was the service I was offering), then why can’t I do it for my own business!”
Easier said than done.
I spent almost seven months and tens of thousands of dollars (money I really didn’t have), trying to crack a system to generate leads. My failure to achieve this started to manifest itself into imposter syndrome – for who was I to offer Facebook advertising services if I couldn’t even do it for myself!!
It was on my final attempt (thanks universe) when things “cracked”. I woke up the next morning with three leads booked into my calendar and nearly choked!
What soon followed was an insane period in my life where I would be on about 6-8 sales calls per day, closing clients left and right.
I went from being a freelancer doing $10K/mth to turning over $80K/mth in two months and then hitting $100K/mth revenues on the third month. My team had grown to 8 people and I almost lost it all during this phase when the lack of processes blew up in my face (but that’s a story for another time).
Long story short, peers started to take notice and I started to help out fellow agency owners to implement the same system.
Between 2017-2020 I had worked with over 700 agency owners and had established myself – somewhat inadvertently – as an “agency” mentor.
But something was bothering me.
I noticed that – whilst agencies were experiencing great success with the lead generation system and from implementing processes in their business, many were hitting hard times due to losing clients.
I remember reading an article online six or seven months back about how Saatchi & Saatchi – one of the world’s largest agencies – had just laid off 150 people in Auckland after losing the Coca Cola account.
My mouth dropped – this kind of stuff was happening even to the beasts in our industry.
Herein lies one of the cons of being in the agency space – client churn.
“Get some clients, hire some people, pay myself a handsome salary. Easy, right?”
You land some clients, establish a new normal with your revenues – hire staff (your expenses go up) and then next thing you know you hit a hard (or random) patch and lose five clients at once. Your revenue plummets but your expenses remain the same, you’re in deep trouble and have to revert to not taking a paycheck and reinvesting every last dime you have in your business to make sure you can make payroll.
And yes, sure, having a funnel in place means you can replace these lost clients, but there is usually still a period of a couple of months for this to settle back in. Most of us don’t have enough profits put aside to be able to fund two whole months of operations in a time of crises.
This is when I had my second “ah-ha” moment.
When you are generating leads, about 85% of these will tell you “no thanks”, usually due to a pricing objection. Most businesses won’t be able to afford your prices, and that’s ok, you shouldn’t discount your prices. But neither do you have to let it all go to a loss.
The other part to this is that processes around your service offer are critical to your business success and to allow you to step away from implementation. If you want to scale, it’s no longer a matter of if you should have systems in place but rather how you get these set up as soon as possible.
Marrying these two components:
1. You already have leads coming through that need your help saying “no” due to pricing (and you’re paying to acquire these leads)
2. You should have processes in place around your core service offer
The key is to completely rethink the traditional agency model – which revolves entirely on a done for you basis.
But what if we expanded this for a moment. What if you developed and refined your processes for your core offer and then packaged these up as a Do It Yourself offer for the leads that can’t afford your prices!
So that instead of just offering services to high paying clients, you can monetise leads that aren’t able to afford your fees right now.
Building a second income stream for your business that doesn’t require any further costs or staff and that will buffer you during times when client churn hits a bit hard.
Here’s how this model can help you to scale:
1. Creates a second income stream that doesn’t require additional staff or expenses
2. Forces you to refine and improve your processes (which can only be a good thing for your business)
3. Protects you against revenue yo-yos
4. Establishes the ultimate funnel for your agency
For the last point, this comes in part mostly as the majority of business owners lack time – that’s our biggest holdback. For many who purchase your DIY option, they will grow to a stage with a bit more revenue and decide they can’t be asked doing it all themselves. Who do you think they will want to hire or work with? They’ve already purchased from you, they trust your system, and they’ve already been quoted your Done for You prices – when you get on calls with these types of leads the close rate is as high as 90%!
Below is an example from one of the agencies I’ve been working with for the past three years. These guys had no lead generation system in place when we started out and literally $1000 in the bank, they were a hair’s breadth away from being bankrupt. Fast forward to today and they have also re-spun the agency model to create a second income stream for themselves and buffer themselves against revenue yo-yos. They now turning well over $100K/mth in revenue.
By now you’re probably thinking – “I don’t have time to create an online course or Do It Yourself offer”
but this is where it gets even better.
The funnel you are using to generate leads doesn’t change – that’s the same lead pipeline you were using before. So there are no extra or special marketing requirements needed to roll this out. All you really need to is to create the training itself.
And this should already be inside your agency.
As in, the training is simply your internal processes repackaged. Here’s what I mean – if you are offering funnel builds for webinar coaches, for example, you should have a process in your business on how to build a webinar funnel for a coach. This process is essentially what allows you to step away from being the implementer and scale your business.
All you’re really doing is polishing up that process (which can only be a good thing for your business in general) and then offering this as the training.
You can sell this normally anywhere from$297 right through to $2,000.
The perks of it all is that this activity in itself forces you to re-evaluate your own processes, refine them, and you can even get your team to do most of this.
Now, if you still don’t have systems or processes in place – don’t go too hard on yourself, this is actually more common than you think. Shifting your agency to this new DFY/DIY model now provides you with the opportunity to roll out something so critical in your business.
The system is ideal if you’re:
1. Experiencing volatile revenues – One client comes in, two left…
2. Struggling to replace yourself as the main implementer – Contractors & staff keep letting you down…
3. Expenses keep chewing away at your profits – You’re barely able to pay yourself properly…
4. Leads aren’t valuing your services – Keep dropping or discounting your prices…
I can relate with all of the above and want to assure you that even if it feels like you’re in too deep there is a way to turn the ship around, and it doesn’t have to take years, you could literally be months away from running the type of business you always dreamed of – one that supports you financially and provides you with the freedom to live life on your terms.
If this has piqued your interest then I want to invite you to see if my agency scaling program, The Academy, is the right fit for you.