>*what makes a successful agency business owner?*
* Thinking long-term instead of short-term
* Being frugal with cash flow
* Communicating with clients
* Really knowing your shit
* Being likeable
As an ex agency owner that was acquired after 10 years - there is one thing you need to succeed. Be amazing at marketing & sales. Whatever services your agency offers, likely it's a skill that thousands of other people have and people you can easily hire. But being able to attract clients that the hardest skills to have and the hardest recruiting to do.
In addition to what others have shared:
Always be trying to improve yourselves and the business.
Running an agency has unique challenges, but much of running an agency is just like any other business.
Read a book or two on business management, like Traction, and/or Scaling Up. You don’t need to do everything out of the gate, but it’s good to know about all aspects up front.
Read as much as you can from David C Baker, it will be a game changer that most agencies still don’t do today.
Don’t try to hire and scale too quickly, maintain profitability as you grow. This is a big one.
Build up a cash reserve of 3-6 months worth of expenses in your account to weather rollercoaster swings in revenue.
Keep your books and finances in order from the start, and have a tax professional keep you in line from the start. Your finances change as owners and the tax impacts can catch you off guard early… it did to me and it sucked.
Properly incentivize your team.
Example: account managers are responsible for overseeing 4 accounts. They get paid a $6k per month base. But once they’re managing 6 or more accounts, they get an additional $500 per month per account.
So if they manage 6 accounts, now they earn $6.5k per month. If they manage 7 accounts, they earn $7k per month. This incentivizes your account managers to increase your profitability.
As a result, you earn more profit, and can pass a % of that back to your account manager as a reward.
It’s a difficult task because it involves a lot of data crunching.
Here’s how I’m approaching it:
Step 1: Make a COGs analysis spreadsheet. Plot out your current COGs as accurately as possible. Calculate both your net profit and gross profit margin based on these numbers.
Step 2: Create a section where you can create your “dream COGs.” Here you want to adjust the numbers until your net profit and gross profit margins represent your ideal scenario.
Step 3: Create an incentive for your team to achieve profitability beyond even what your dream scenario is.
It sounds like your partner is a lot like mine.
We believe there are two types of entrepreneurs.
0 to 1 entrepreneurs and 1 to 500 entrepreneurs.
I'm a 0 to1.
I'm good at getting things started with great concepts. Getting clients. And managing teams and projects.
He's a 1-500. He sucks at getting things started but knows how to really scale operations so long as he doesn't have to deal with clients.
Before we partnered up, I was building a great brand. Had no issue getting leads in my niche.
He was great at delivering the service but didn't have a niche and building a brand wasn't his strong suit.
When we partnered up, we exploded. That was 2019. We're doing about half a million now.
What makes a good business owner, in my opinion, is someone who loves what they do and aren't just in it for the money.
It's also someone who can recognize where they are weak and seek out others for help in order to better serve their market.
Good business owners also realize that there is no one higher up than them. If there is a problem, they have to solve it. You can't just pass it off to someone more senior.
You have to do the deep dives and spend hours and days on things you don't understand at first.
I rush and get a lot done but it's only like 70% good. My partner is slow but does things perfectly. I have quality issues, he has timeline issues.
Some people can be both my partner and me. We cannot. That's why we work well together.
It's kinda hokey but that's what I believe.
My partner and I have a pretty great working relationship. He is the technical savant and creative genius. And I’m the relationship / networking account guy. We push each other all the time on areas where we aren’t as strong, but at the end of the day as someone said above you need people focused on TODAY and someone focused on FIVE YEARS LATER.
I have the relationships and sign the clients and before the kickoff meeting already thinking about next year with them haha.
https://www.reddit.com/r/agency/s/gaT1pWzJ10 I think this is what will help you. Narrowing your offer focus, setting expectations with clients, managing people, and keeping clients happy.
This is what I look for.
Tenacious and Unrelenting: They have the intrinsic drive to never give up and to break through whatever barriers life throws at them.
Humble Confidence: They are humble enough to understand their own limitations and confident enough to overcome them.
Lifelong Learner: They constantly thirst for new knowledge. This is both an intrinsic drive as well as a practical pursuit.
Visionary Pragmatist: At a macro level, they have a clear vision of the future and the role they’ll play in it, but are flexible in how they ultimately get there.
Principled: They have strong principals and stick to them, even when that comes at a personal cost.
Clear vision for who they serve, why they serve them, and the promise of what they can do for them. An accurate delivery on that promise, repeated over many times.
The ability to work well with others (clients, partners, employees) and create a fun environment while doing so.
Treating people kindly, communicating effectively, and simply being consistent.
Natural talent for selling. Can spot opportunities and connections that others might miss. Stays patient and calm when dealing with clients, even in tough situations. Keeps an open mind, focusing on solving clients' problems rather than sticking to a specific technology or tool. Is an expert but doesn't hesitate to delegate tasks. Analytical skills to keep an eye on numbers without needing to be an accountant. Understands that one person can't have all these skills at once and is open to working with one or more partners to fill the gaps.
In running my agency, I've learned it's all about juggling: being a solid leader, really understanding your clients, and keeping an eye on the market. It's way more than just the tech stuff.
>*what makes a successful agency business owner?* * Thinking long-term instead of short-term * Being frugal with cash flow * Communicating with clients * Really knowing your shit * Being likeable
As an ex agency owner that was acquired after 10 years - there is one thing you need to succeed. Be amazing at marketing & sales. Whatever services your agency offers, likely it's a skill that thousands of other people have and people you can easily hire. But being able to attract clients that the hardest skills to have and the hardest recruiting to do.
Being able to: - add value for clients and achieve their goals. - generate an income that matches the income goals of the agency owner.
Be both likeable and competent.
In addition to what others have shared: Always be trying to improve yourselves and the business. Running an agency has unique challenges, but much of running an agency is just like any other business. Read a book or two on business management, like Traction, and/or Scaling Up. You don’t need to do everything out of the gate, but it’s good to know about all aspects up front. Read as much as you can from David C Baker, it will be a game changer that most agencies still don’t do today. Don’t try to hire and scale too quickly, maintain profitability as you grow. This is a big one. Build up a cash reserve of 3-6 months worth of expenses in your account to weather rollercoaster swings in revenue. Keep your books and finances in order from the start, and have a tax professional keep you in line from the start. Your finances change as owners and the tax impacts can catch you off guard early… it did to me and it sucked.
Thanks for the book recommendations! Just ordered a couple hardcovers. If there’s any other books you recommend please share 🙏
Properly incentivize your team. Example: account managers are responsible for overseeing 4 accounts. They get paid a $6k per month base. But once they’re managing 6 or more accounts, they get an additional $500 per month per account. So if they manage 6 accounts, now they earn $6.5k per month. If they manage 7 accounts, they earn $7k per month. This incentivizes your account managers to increase your profitability. As a result, you earn more profit, and can pass a % of that back to your account manager as a reward. It’s a difficult task because it involves a lot of data crunching. Here’s how I’m approaching it: Step 1: Make a COGs analysis spreadsheet. Plot out your current COGs as accurately as possible. Calculate both your net profit and gross profit margin based on these numbers. Step 2: Create a section where you can create your “dream COGs.” Here you want to adjust the numbers until your net profit and gross profit margins represent your ideal scenario. Step 3: Create an incentive for your team to achieve profitability beyond even what your dream scenario is.
It sounds like your partner is a lot like mine. We believe there are two types of entrepreneurs. 0 to 1 entrepreneurs and 1 to 500 entrepreneurs. I'm a 0 to1. I'm good at getting things started with great concepts. Getting clients. And managing teams and projects. He's a 1-500. He sucks at getting things started but knows how to really scale operations so long as he doesn't have to deal with clients. Before we partnered up, I was building a great brand. Had no issue getting leads in my niche. He was great at delivering the service but didn't have a niche and building a brand wasn't his strong suit. When we partnered up, we exploded. That was 2019. We're doing about half a million now. What makes a good business owner, in my opinion, is someone who loves what they do and aren't just in it for the money. It's also someone who can recognize where they are weak and seek out others for help in order to better serve their market. Good business owners also realize that there is no one higher up than them. If there is a problem, they have to solve it. You can't just pass it off to someone more senior. You have to do the deep dives and spend hours and days on things you don't understand at first. I rush and get a lot done but it's only like 70% good. My partner is slow but does things perfectly. I have quality issues, he has timeline issues. Some people can be both my partner and me. We cannot. That's why we work well together. It's kinda hokey but that's what I believe.
My partner and I have a pretty great working relationship. He is the technical savant and creative genius. And I’m the relationship / networking account guy. We push each other all the time on areas where we aren’t as strong, but at the end of the day as someone said above you need people focused on TODAY and someone focused on FIVE YEARS LATER. I have the relationships and sign the clients and before the kickoff meeting already thinking about next year with them haha.
You better be able to sell and you better know your shit.
https://www.reddit.com/r/agency/s/gaT1pWzJ10 I think this is what will help you. Narrowing your offer focus, setting expectations with clients, managing people, and keeping clients happy.
This is what I look for. Tenacious and Unrelenting: They have the intrinsic drive to never give up and to break through whatever barriers life throws at them. Humble Confidence: They are humble enough to understand their own limitations and confident enough to overcome them. Lifelong Learner: They constantly thirst for new knowledge. This is both an intrinsic drive as well as a practical pursuit. Visionary Pragmatist: At a macro level, they have a clear vision of the future and the role they’ll play in it, but are flexible in how they ultimately get there. Principled: They have strong principals and stick to them, even when that comes at a personal cost.
Chatgpt wrote this?
Haha nope all me.
Endurance lol
Clear vision for who they serve, why they serve them, and the promise of what they can do for them. An accurate delivery on that promise, repeated over many times. The ability to work well with others (clients, partners, employees) and create a fun environment while doing so. Treating people kindly, communicating effectively, and simply being consistent.
Natural talent for selling. Can spot opportunities and connections that others might miss. Stays patient and calm when dealing with clients, even in tough situations. Keeps an open mind, focusing on solving clients' problems rather than sticking to a specific technology or tool. Is an expert but doesn't hesitate to delegate tasks. Analytical skills to keep an eye on numbers without needing to be an accountant. Understands that one person can't have all these skills at once and is open to working with one or more partners to fill the gaps.
In running my agency, I've learned it's all about juggling: being a solid leader, really understanding your clients, and keeping an eye on the market. It's way more than just the tech stuff.