Building A Sustainable and Successful Agency
“The further you look ahead, the faster you’ll get there, the straighter the line, and the more predictable the journey will be. Honest!” — Jonathan Leafe.
With 30 years of experience running his successful creative marketing agency, Jonathan has been actively assisting digital and creative agencies since stepping down. As the Editor-in-chief of our Agency Growth Book 2024 publication, Jonathan took the virtual stage multiple times in our packed 2023 calendar, shaping the strategy behind assembling the carefully curated growth book comprising practical management and leadership resources for agency owners and leaders.
Tune into Jonathan’s session from December 2024. To get your free copy of Agency Growth Book 2024, click here.
Planning one, two and five years ahead
The further you look ahead, the faster you’ll get there, the straighter the line, and the more predictable the journey will be. Honest!
It makes sense. When I learned to fly, on takeoff, my instructor told me to look at the end of the runway; that way, you’ll avoid zig-zagging by overcorrecting—great advice that has been at the core of my agency-building journey and now my coaching career.
What you need to do first:
Organise your data
Eyes on your Client churn rate
New Business ratio — how much are you adding on a year-over-year basis
Secondly - work out where your core revenue comes from:
One-off projects
Projects that lead to something else in the income pyramid
Regular (semi-predictable) work and retainers
Long-term value income
“Projects demand senior management input to stand any chance of success, and this is often where agencies get bottlenecked. Resources are thin on the ground - projects suck in even more staff time, resources and management.”
Thirdly - organise your clients into a league table using categories as follows:
Net revenue (after cost-of-sales) or fee income
Profitability
NPS or how much do they like us
Growth potential
Are they with us for the long haul
How hard are they to work with
Fun to work with
They’ll make us Famous
Fourthly - service matrix your clients
For example, if you have eight services which clients could use, what services are they using, and if not all, why are they not using every one? Finally, look at your services - are they still relevant?
Grade them.
Popular, profitable, innovative.
Stagnating - but profitable
Unprofitable and not used much.
Innovative and new, potentially exciting services - not gaining much traction yet.
Expanding it into a two to five-year plan
1. Next year, what percentages are you targeting?
2. Growth = this year’s revenue less average churn plus new business. Note: If your churn is 20% and your new business is 30%, you’ll grow 10% - If that’s not what you want - reduce your churn and grow your sales. I.e. churn is 10%, and new sales are 40%, you’ll grow 30%
For more on the above and a thorough exploration of the ideas, remember to view the video post and claim your free copy of the Agency Growth Book 2024! With this knowledge, you can begin to grasp your present profile. Crafting a full picture may require time, but it's truly transformative. It's akin to having a personal guide unravel the depths of your identity.
