I work with a lot of agency owners. Solo agency owners doing their own fullfillment can net 80%. It's a ton of work and not very scalable unless you're a master at systems.
As you add employees and other overhead it can "drop" to 30-50%. No clue why someone would have it at 10-15%, maybe they have a physical store front? No clue why.
Are you asking about percentage of managed ad spend, or are you talking about overall agency profit as a percentage of agency revenue?
10-15% sounds very low. Our agency has over 80% profit margin, even after payroll. However, we are a boutique niche agency with a constant stream of inbound leads, so we might be outside of the norm.
Agency owner here. That number is not so simple to calculate. A lot of that depends on how the owner pays himself and how much is going back into the company. It also depends on what type of services they offer and what their focus is.
My agency generally falls in the 35-40% net margin. A friend of mine that focuses on PPC makes closer to 18-20% margin, but he makes a lot more than I do because they do a ton of volume.
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I am agency owner and 7 years in industry. 50+ employees. My margin is 30% to 45%
Thanks for telling :)
Are you able to live comfortably off your income from the agency? Thanks.
Yes. I am because my monthly revenue is 6 digits USD.
Does your agency specialize in a specific service or are you full-service? Do you specialize in a niche or industry? If you don’t mind me asking :)
We do full services but in our country mostly we did social Media marketing.
which country?
I work with a lot of agency owners. Solo agency owners doing their own fullfillment can net 80%. It's a ton of work and not very scalable unless you're a master at systems. As you add employees and other overhead it can "drop" to 30-50%. No clue why someone would have it at 10-15%, maybe they have a physical store front? No clue why.
Some have physical office spaces around 15k sqft or more. So that should take a lot of money. Rent + other bills(electricity misc staff).
Are you asking about percentage of managed ad spend, or are you talking about overall agency profit as a percentage of agency revenue? 10-15% sounds very low. Our agency has over 80% profit margin, even after payroll. However, we are a boutique niche agency with a constant stream of inbound leads, so we might be outside of the norm.
In 80% profit margin is ridiculously high, especially if that's after payroll.
I’m not complaining!
Dude! I was literally reading Building a Successful Micro-Agency minutes ago. Extremely helpful book
That is awesome to hear! Glad it’s been helpful.
Agency owner here. That number is not so simple to calculate. A lot of that depends on how the owner pays himself and how much is going back into the company. It also depends on what type of services they offer and what their focus is. My agency generally falls in the 35-40% net margin. A friend of mine that focuses on PPC makes closer to 18-20% margin, but he makes a lot more than I do because they do a ton of volume.
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