When I speak to business owners they generally have 2 goals in mind. The first is to earn more money and secondly, they want more control over or freedom of their time.
So around the world right now, each of you watching this video, put your hand in the air if you want to achieve either of these goals.
I’m here to tell you that scaling your agency is the key. The good news is that it is completely achievable for the majority of you watching this. The even better news is that there’s a process to follow and today I’m going to share with you the strategies and tactics you need to scale your creative agency so that it either runs without you or you are in the best position to maximise profit. If you do things right, you can achieve both.
I’m Connor McAuley the founder of Move at Pace and we help service businesses to scale in line with their ambitions. Before Move at Pace, I built a multi-million-pound agency, before successfully exiting just a few years back.
But what is scale?
If scale is the answer to all our problems, we need to understand what it means for our business. Scale (or scaling) refers to a company’s ability to increase its revenue, output, or operations while maintaining or improving efficiency, often by achieving proportionally lower cost of service as revenue increases.
This typically involves:
- Growing revenue faster than costs
- Expanding operations/market reach
- Leveraging existing technology
- Increasing efficiency through standardisation
- Taking advantage of economies of scale
And yet scale is elusive to so many growing businesses. As revenue increases, they find that the costs of building a team, hiring, firing, and introducing systems and processes grow proportionately greater than the increase in revenue. This is common, and I’ll admit there will be periods where you should expect this. But to truly scale, this shouldn’t be the norm. And so here are my top tips to help you scale a service business.
Automate repetitive tasks
If you have to do a task more than once, automate it. And if you think about this in terms of your own business, what tasks do you return to time and time again?
Now the level of automation you can implement will of course be the varying factor, but if we consider onboarding as an example, this process should follow a system for each new client you onboard.
I generally look at this in terms of 3 options.
- Full automation
- Templates for repeated tasks/processes/emails
- Process to follow
Each of these options provides time-saving, and continuity of service and they can be refined over time to be as effective as possible. But they come at varying costs and rigidity of service. So you need to decide what tasks can be automated, to what level and….at what cost.
Systemise everything
Right now if I ask you to describe your process for onboarding a client, designing a website or billing a project on completion, I could guarantee that as the owner you could confidently rhyme this to me, a client or your team. However, if I were to line up each of your team members and get them to do the same, the results would vary.
Even if you don’t have a team, building the systems and processes needed to scale your business is entirely worthwhile. It builds capacity even as a solopreneur, it helps to ensure that your service level is maintained, you are confident in the processes being followed and you can monitor its effectiveness. Remember, you’re not building these processes for you, but the person coming behind you.
Saying no to bad-fit clients
When you’re in the early stages of business you take on nearly any client. Paying the bills and keeping the lights on is often the priority. But by saying yes to every project or client you often move away from your core focus and move into other areas that are less profitable, take more time, prevent growth and stop you from building a business that runs without you.
When a new client approaches, ask yourself this. “Will this client take us closer to our goals or further from it?”
And, look. I live in the real world. It’s hard to say no to someone who wants to give you money. But remember, when they start to look for non-core services, that’s your time to pass it over to someone else or decide to bring a new service line into the business.
Start small
Scaling your business might seem like a mammoth task, but the biggest changes start with the smallest. When you plan to scale your business, you need to critically think about each of the tasks you and your team complete. Consider which of those tasks can be eliminated, automated or delegated to other members of your team. And what opportunity does this present to you to refocus your efforts elsewhere?
Think about the key areas of scale: people, sales and operations. Think about the tasks you complete and look for elements that waste time, reduce quality or output and begin there.
Just charge more
If only it were this easy. Well, I’d argue that it is. But you need to focus on your client’s problems, not just your solutions. When you do this and you provide intrinsic benefits or commercial value for your clients, then you can begin to charge more for your service. If not with your current clients, but with the next ones you onboard.
But how do you start this process? Well if you provide design services you need to consider what value the output of this service will bring to your client and then directly relate this to the commercial objectives of the business.
“Our brand helped take a business from £50m to £60m one year after rebranding.” This is a note I’d use regularly because it’s true. And while our delivery of a world-class brand is just a small element of the entire business change in those 12 months, I’d argue that by elevating the brand positioning we made it work just as hard as every other business function. Collectively building the business.
When your business begins to mature you need to mature also. Note that I don’t talk about design systems, tone of voice or iconography. I firmly focus on the conversation the MD, the FD or the board would be considering. As a result, our service costs also matured.
Build the lifetime value (LTV) of your client
When you start out the goal is to get new business. But if I told you that acquiring a new customer can cost 5 to 25 times more than retaining an existing customer, where would you focus your efforts for scale?
The smart people watching would love the ones you’re with and you make best efforts to maximise the value they contribute to your bottom line.
I can tell you honestly that one of my very first clients back in 2009 is still a client of the business I started today. Their average order value was about £500 and they’d place this level of business with us almost weekly in that period.
Keeping this client and maximising the value they spent over this period is not uncommon for our business, but it was done with intent. Here’s what we did.
- We delivered the service we agreed upon
- We ensured they knew about all our new and existing services
- If the project was physically possible, we completed it on time.
In short, we provided the best customer service possible and made our clients fully aware of all opportunities we could support their business. As they grew and our service offering grew, they were able to utilise more of them.
Think about each of your current clients and the services you provide to each of them. Plot a list of opportunities for each client and ensure you or your team are in a position to sell these to them.
Also, consider recurring revenue models. Starting we often focus on one-off projects, but by having recurring revenue streams you can create predictability both in terms of revenue and resources needed. This stability becomes the platform from which to scale at pace.
Know your numbers
The number of agency owners I speak to who don’t know their business financials immediately is disproportionately high. If you take nothing else away from this video, you need to understand profitability and the cash flow in your business to make informed decisions. Not just to scale, but to stay in business.
Cross-training
No, I’m not talking about hybrid athletics, but rather the need for your team to have skills across the business. As you scale there will be moments where you feel like you’re losing control, it’s moving too fast and there are too many moving parts. At that exact moment, I guarantee that someone will raise their hand and say they’re leaving. If they are the only person completing a specific task or have the knowledge or skills to manage a client, you’re in trouble. To scale you’ll sometimes need the team to support other areas. A company-wide skills training and development plan supports this.
Leverage technology
Imagine you had to send a fax or a client had to receive printed copies of artwork to sign off on every project. How would that slow down your service delivery? Even I struggle to comprehend how business was done 25-30 years ago. The pace at which we move is lightning fast and it’s only getting faster. The systems we use will become more interconnected and while this does of course pose challenges, for those who adopt new technologies, opportunities are plentiful.
Keeping up to date with the latest industry developments is key and introducing new technologies is a must.
Get support
None of us can scale an agency alone. Even when you have partners in the business, you need to continuously develop your knowledge and skills to strengthen some areas and to overcome challenges elsewhere.
Over the years I’ve had mentors, and an executive coach and I’ve spent sums on books and workshops. All to help me achieve my goals. Knowing you don’t know everything is the first step. Getting help to achieve your goals is the second.
I hope you’ve enjoyed this video and it’s provided some value in helping you plan for scale in your agency. If you need help, please head over to moveatpace.com and drop me a message. We’ll set up a discovery call to see if there’s a benefit in working together.
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