No matter what your natural talent levels are, it’s hard to run a digital agency. Everything needs attention all of the time. After a certain amount of grafting, you start to develop a regular source of income from your services. And while that’s an achievement in itself, the rollercoaster goes on as you experience the highs of winning clients and the lows of losing some; the joys of hiring a high-quality professional to fill an important position, and the downcast feeling when team members move on.
Often among the day-to-day running of the business, agency owners lose sight of the importance of effectively planning for their future growth. It’s hard to focus on long time horizons when there’s so much happening each week, but it’s critical to push through, step back, and plan well for the future. This article presents actionable insights from our recent webinar on the topic of building an agency growth strategy that works.
To start building your future plan, take a step out and back from the agency, and focus on yourself. Give yourself several months to build out this plan fully. Having a sense of direction in where you’re aiming as an agency makes it easier to focus. A future-oriented mindset also makes decision-making more intelligent by guiding decisions based on tangible plans and your progress versus those plans rather than just relying on gut feelings.
If all of this sounds self-focused, that’s because the future starts now and with you, the agency owner or co-owner. Take stock of your current life based on a number of key areas, including career, fun, family, health, finance, and social. A useful tool here is the wheel of life, which depicts your current life situation and identifies imbalances.
The point of starting with your current personal situation is that you want to avoid embarking on a future plan only for certain life areas you’ve neglected to catch up and derail your plans. For example, if your physical health is a neglected area, whether in a year or two, a health issue is more likely to crop up that might even call for an extended break from working.
By examining where you are now, you can understand and remedy any imbalances in your life. With a more balanced lifestyle, your agency stands the best chance of flourishing.
Now that you know where you are in life, it’s time to move on to your agency. There are five key areas to examine within an agency:
Rank these areas on a scale of 1-10, and try to be as objective as possible when doing so. The most important three areas are finance, operations, and marketing. With this current benchmark, you can reassess your agency over time as your future plan progresses. Looking more granularly at these three areas, here are some metrics to examine in assessing and benchmarking their overall scores:
Finance: Turnover, breakeven point, liquidity, blended hourly rate, debtor days
Marketing: Ad/marketing spend, client churn, brand perception, market position
Operations: Output per person, staff turnover, absenteeism, training taken, complaint rate
When building a strategy for business growth, start with the end in mind. Whether you’re setting a three-year or five-year horizon for future growth objectives, start at the very end of that horizon. Define where you want to be as an agency and personally at the end of that period.
This strategy helps you define what you need to do along the way to get where you want to be. Be very specific about where you want your agency to be at the end of the time horizon (e.g. in three years' time, I would like €3 million turnover, 20% net profit.) Future goals need to be realistic; you can’t go too far wrong with the classic SMART framework when setting these objectives.
It’s time to go in-depth with your growth plan. For this stage, consider going old school and using a pen and some paper to properly sketch things out. Using a sample time horizon of three years, jot down the five key agency areas and establish where each area needs to be in three years to help meet your overall growth objectives.
Using the end state and your detailed current benchmark results, work back through previous years (years two and one in a three-year timeframe) and define where each of the five key areas needs to be based on the discrepancy between now and the objectives at end of your time horizon.
Using this paper-based plan, you can then start to geek out and create spreadsheets with specific numeric values/targets for the end of each year in your plan.
Of course, to be able to keep track of progress in all these areas, you need some leading indicators, or KPIs. Leading indicators give early measures of performance and provide sufficient time to course correct. These course corrections are almost guaranteed because reality rarely pans out as neatly as you desire in your future plan.
A dashboard of leading KPIs could include:
These are just some examples; indicators will largely depend on their utility in helping you gauge whether you’re on track in meeting specific targets for key business areas. The beauty of effective KPIs is they provide a good measure of progress against growth objectives. These indicators remove the kinds of uncertainties as an agency owner that may stress you out and ultimately start negatively affecting other areas of your life.
After setting the plan, use tools to help maintain focus and direction during daily business activities and keep traction with objectives. Spreadsheets, Asana, coda, monday.com, and clickup are all useful in their own ways for keeping traction.
It’s far easier to weather the inevitable storms you encounter at your agency when you effectively maintain focus and direction. If you lose five clients unexpectedly, you know exactly what needs to be done in terms of marketing, sales, etc to re-align with future objectives. Rather than immediately panicking during these storms, you can react rationally and calmly.
Stay tuned to the
Duda blog for more webinar insights.
