Once you’ve learned how to start an agency, the next logical step is building a plan to scale your agency. By this point you’ve landed some key accounts, are collecting consistent revenue, and are actively building a reputation for quality work. Read on to find some answers to the question of “what’s next for my agency?”.
Before diving too far into learning how to scale your agency, it’s important to first identify what scaling isn’t. Many new agency principals believe that “scaling” is synonymous with “growing,” and that this simply means hiring more staff and winning more clients. While you certainly can grow your revenue and your digital footprint this way, it’s generally advisable not to—this type of growth isn’t scalable (or sustainable, for that matter). If you choose this approach, you’ll pretty quickly find yourself swamped in administrative tasks, desperately chasing down new accounts in order to keep your employees paid and your business afloat. Anyone learning how to start an agency and scale it needs to think more strategically about sustainable growth. Simply throwing more bodies into the mix isn’t the answer you’re looking for.
True scaling can only happen when agencies are able to charge a price premium for their services, often through the development of more strategic capabilities. The further you can swim upstream in your client’s work, the less your revenue will be tied to the labor hours of your staff. Another way to think about this is that true scaling occurs when you begin selling your thinking, and not just your doing.
Let’s look at a hypothetical scenario to see how this plays out. Agency XYZ, a creative agency founded by a graphic designer, has slowly built an impressive client roster. They’ve hired some accounts people and additional creative talent, but are still living hand-to-mouth, always looking for the next big project. Agency XYZ is stuck in this cycle of reactive work, always waiting for clients to come to them with specific creative needs, as identified by the clients’ larger marketing objectives. If nothing changes, Agency XYZ will always be in this position, executing on their clients’ requests, with revenue always directly tied to creative outputs or deliverables.
In order to scale, Agency XYZ must fight to earn a seat at their clients’ marketing table. Instead of executing deliverables under the guidance of each client’s marketing objectives, Agency XYZ needs to work with their clients to help identify and define those marketing objectives (and, downstream, the tactical creative deliverables to help achieve those objectives). Success here means that Agency XYZ’s revenue is no longer tied to their total production capacity; rather, revenue is correlated to the amount of value the agency principal (or key accounts staff) are able to sell to clients. Accordingly, evolving your agency’s strategic capabilities is critical if you ever want to find success in scaling your agency.
This doesn’t mean your agency must become something it isn’t (in the above example, Agency XYZ will always be a creative agency, not a marketing firm). But you need to broaden your vision and expertise beyond the tactical “goods” you produce, so that you can better understand and solve for your clients’ core needs. Once you begin selling your thinking on how your clients can succeed, you can begin charging a price premium that scales far beyond your total in-house production capacity. You’ll know you’re making progress when your talks with clients shift from tactical discussions of deliverables to more open-ended conversations on goals, outcomes, and long-term value.
While you can’t sustainably scale simply by hiring more talent, a growing staff is certainly an important part of a growing agency. When approaching hiring new team members, it is critical that you evaluate the skillset of your current team, paying particular attention to your own capabilities. Is there anyone on your team who exhibits the potential to lead these types of strategic conversations with your clients? Are you able to? As you hire, think about the type of support you need to run your agency, and build a leadership team of talent with diverse capabilities. It’s easy to hire talent to execute on the day-to-day tactical production needs of your agency. The real challenge is finding staff who can understand your vision and speak strategically to how your agency can help your clients succeed.
If you’ve already learned how to start an agency, you’ve already built a solid foundation from which to begin scaling. Good luck!