Master the Art of Marketing Agency Management with Four Steps

Growing your creative agency requires more than landing great clients and big contracts. A lot must happen internally to ensure you’ve built the infrastructure to sustain your agency’s growth, from evaluating your current responsibilities as a creative agency owner and hiring the right people to revisiting your professional goals and determining a path forward. 

On our recent podcast episode, I speak with Brad Ferris, the founder and principal advisor of Anchor Advisors, a coaching service for creative agencies. Read on to discover his advice on the art of marketing agency growth.

Hire people who take on some of your current responsibilities to accelerate agency growth.

Naturally, you will hire more team members as your creative agency grows to handle the increase in new clients and work. However, it’s imperative that you’re strategic in your hiring practices. For most small businesses, senior leadership wears several hats. Unfortunately, this approach often means agency owners must focus on more than just running their agency because they’re too busy with daily, client-facing work. With that in mind, consider hiring team members who can take on some of your current responsibilities so that you can focus more on other essential tasks. “When the owner pulls themselves out of service delivery, the agency grows substantially,” shares Brad. “Looking back at it, the owner is often the bottleneck for growth.”

You might be on board with hiring new employees who can help take your marketing agency to the next level but are still determining if your agency’s size and revenue are conducive to onboarding another team member. “As you get across a million in revenue,” Brad states you should hire your first person to take on some of your current responsibilities. By $2-2.5 million you need an established team that can take most of the day-to-day tasks like sales off your plate. For example, solid account managers, project team members, or even agency management software can take these back-office tasks off your plate, freeing you up for strategic growth work.

Determine where you want to spend your time and identify where you’re actually spending your time.

As you add more people to your team and they take on more of your current responsibilities, you must readjust how you spend your time. As things evolve, consider your responsibilities and the percentage of time you spend on specific tasks. For example, an owner who enjoys and is good at sales may opt to spend 50 percent of their time supporting creative agency development but then pivot to developing and championing the agency’s vision during the other half of their available time. 

Once you establish how to allocate your working time, track the hours you spend on these work categories. Time tracking helps you see whether you’re maintaining that determined balance and if you need to prioritize other agency growth tasks. You can even look back and analyze how you spend your time each week to see which weeks are more productive based on what you accomplish.

Whatever your task ratio looks like, “Once your team gets to a certain size, there’s always someone in crisis–it’s just the law of averages.” Brad points out that it’s imperative to schedule some time to deal with work crises. “Build the time into your schedule to be able to deal with those crises as they come up so that it doesn’t throw off your plan.”  

Establish your goals to determine which action steps you want to take.

Not every creative agency owner is working toward the same outcome. Whether you’re interested in growing your business and staying on to run it indefinitely or building it up to sell it to a larger agency, it’s crucial that you revisit your goals, KPIs and metrics annually as your desires may change. Your goals also influence your growth strategy. For example, suppose you’re interested in continuing to grow your marketing agency. In that case, you must determine whether you will offer the same service to a wider audience or more services to the same audience to increase your revenue generation potential. Your end objective determines what option you choose. 

“As you’re starting to get up towards $10 million in revenue, you start to have to think about how you are going to grow beyond that one offer,” advises Brad. “Are we going to offer more things to that same customer, or are we going to broaden our target market for other adjacent industries that might benefit from that same thing? Doing both does not work. You have to do one or the other.” Making this strategic choice is critical to your agency growth.

Ensure you have the cash required to take risks.

Having a cash reserve is essential for agency growth because it allows you to take risks. Cash reserves provide the financial cushion needed if a growth endeavor doesn’t have the return on investment you hope for. Our virtual CFO team recommends having at least 10 percent of annualized revenue tucked away, amounting to two months of agency expenses. If you prefer to be on the cautious side, a 30 percent cash reserve will give you six months of agency expenses. The more cash you have in your reserve, the more aggressive you can be with your growth strategy and the more risks you can take. Essentially, decision-making becomes a bit more bullet-proof when you have the cash to make strategic business plans happen.

“Another thing cash gives you is the opportunity to grow faster. If we decide we want to move into adjacent services for the same client, sometimes there are acquisition opportunities there that allow you to jump-start that,” notes Brad. “There’s more risk on the capital side, but less risk on the operational side if we’re buying something that we know is already successful in that market…Using some outside capital and having some cash free to put into those deals really accelerates growth.”

If you take a step back and look at your responsibilities as a leader, what you spend your time on, what your goals are, and if you have the cash available to invest in those goals, you put your creative agency in a growth position that ensures success. Consider applying the suggestions above to pursue a growth strategy to help your agency scale.

If you would like help drafting a financial strategy for agency growth, reach out for a virtual CFO consultation.