On this episode of The Agency Accelerator, we delve into the common challenges marketing agencies encounter regarding growth. Rob provides insights into overcoming obstacles such as a lack of leads, inability to scale, cash flow and stagnant client growth. The podcast emphasises the importance of having a strong foundation for growth by delegating work (to ultimately work towards creating a self-running agency).
Listeners will learn how to create a clear roadmap and maintain margins and how to take your team on the journey with you.
[00:50] Overview of the common obstacles that marketing agencies face in terms of growth
[02:35] Importance of having a solid foundation for growth
[04:20] Difficulty in generating leads and closing deals
[06:10] Stagnant client growth and the challenge of scaling
[09:00] Importance of delegating work to build a self-running agency
[11:15] Tips for creating a clear roadmap for growth and maintaining margins
“Without a clear roadmap, you’re driving a car without a destination in mind. You may eventually get somewhere, but it will take longer, and you might end up lost along the way." - Rob Da Costa
"Your job as a business owner is not to be the best at everything, but to be the best at delegating and building a team of experts around you." - Rob Da Costa
"Scaling doesn't mean just adding more employees, it means building a scalable business model that can support growth without sacrificing quality." - Rob Da Costa
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Useful links mentioned in this episode:
- "The Four Systems You Need To Grow Your Agency" (blog post)
- "How to Build a Strong Foundation for Growth in Your Agency" (podcast episode)
- "6 Ways to Scale Your Agency Without Sacrificing Quality" (blog post)
Rob Da Costa [00:00:00]:
When you started your marketing agency, I bet you had aspirations to grow. Whether that means growing a big team or becoming super profitable or growing your revenues, we all don't want to stand where we are. However, despite your best efforts, you may find that your agency has hit a brick wall when it comes to growth. And when it comes to increasing your revenues, it's really frustrating and we end up with a headache because we're bashing our heads the brick wall. But know that you are not alone. Many agencies hit a plateau at some point, but the good news is that there are ways to break through that wall and keep growing. So in today's podcast, I want to look at some of those common obstacles that we hit. What stages in our growth.
Rob Da Costa [00:00:41]:
We hit them and share a few tips to help you break through and move to the next stage of growth. So let's get on with today's show. I'm Rob de Costa, and this is the agency Accelerator Podcast. As someone who has stood in your shoes, having started, grown, and sold my own agency, I know just how it feels in the ups and downs of agency life. So this podcast aims to ease your journey just a little by sharing mine and my guests experiences and advice as you navigate your way to growing a profitable, sustainable, and enjoyable business. In today's episode of the podcast, I'm going to discuss with you some of the common brick walls or obstacles that marketing agencies face, as well as some tips for overcoming them. And I'm also going to outline the typical growth journey that most agencies go on. So I'm sure you're going to be able to relate to some or all of these challenges.
Rob Da Costa [00:01:31]:
So, as I said, there's a number of common brick walls that marketing agencies face as they grow, so let me share with you some of them. So, first of all is going to be around business development and the lack of new leads. And you're quickly going to hit a brick wall if you don't have a methodology for continually bringing in new leads. Because if you don't bring in new leads, then you can't make sales. And without sales, you can't generate revenue. And without the revenue, you can't continue to invest in your agency, whether that be in people, in systems, or indeed in further marketing. So to overcome this, you need to protect some time in your diary to focus on the right few lead generation strategies that are going to work for you. And they may include things like getting good SEO, making sure your website's, converting social media marketing, building your email list, paid advertising, and a whole bunch of other things that are going to bring in leads that you then nurture and then convert to customers.
Rob Da Costa [00:02:29]:
And that brings us on to the second point, because it's all very well generating lots of leads, but if you're not able to nurture them and then close the deal. Then even if you've got plenty of leads, you're going to find that you are really struggling to generate new revenues. Now this could be due to a number of reasons including generating the wrong kind of lead, trying to close them before they're ready, having an ineffective sales pitch or poor communication, or that the client's just not ready to buy from you. So to overcome this, first of all, you need to diagnose what the problem is. But you also need to make sure that you are targeting the right type of client, and you're targeting them at the right point in their journey when they're in enough pain that they genuinely are looking to buy your products and service, as opposed to just being, in fact, find mode. So that's the second common brick wall that a lot of agencies face which is generating leads and then closing those leads into clients. Now, following on from those first two obstacles, the next logical challenge is around stagnant client growth. So you may be really good at retaining your clients, but you're not really growing them.
Rob Da Costa [00:03:32]:
And because you're not doing those first two things, you're not really bringing in new clients. And of course this creates a huge risk for you. So we need to make sure that we have a proactive account development plan to look for new revenues and new projects from existing clients as well as having a new business strategy. And if you don't do that but you just rest on your laurels with the current clients that you have, well hey, you are going to lose one of those clients at some point, maybe through no fault of your own. And if you don't have new business waiting in the wings or you're not finding new revenue from existing clients, then you are going to head towards a space of famine. And this is definitely going to be one of those obstacles that are getting in your way to growing your agency. And you're going to get that sense of taking one step forward and one step back. That is super frustrating.
Rob Da Costa [00:04:19]:
Now the next obstacle is kind of a bigger one really and that is like not being able to scale your business. You just can't grow because every time you try to, things start falling over and you have to put your attention somewhere else. So it's super important that we are always building a foundation for the next stage of business that we want to grow into. And when I talk about foundation, I'm talking about systems and processes, I'm talking about our fees, the type of clients, the It that we invest in, the office that we invest in if we have an office and the people that we invest in. If you don't put a foundation for growth to step into the next stage you want to be, then you are going to find that this inability to scale, your agency is going to really get in your way and you won't be able to take on more new clients even if they are waiting to join you. And if you do, you're probably going to have a nervous breakdown because the whole world is sitting on your shoulders. And that brings me on to the next obstacle, which is getting work off your plate. I talk a lot about the self running agency and one of the big parts of building a self running agency is making sure that everything doesn't sit on your shoulders.
Rob Da Costa [00:05:27]:
So you, the agency owner, become the obstacle to growth. So you've got to start delegating down as much as you possibly can. You want to hire the best people you can and you want to trust that they will do a good enough job, even if you don't believe they will do as good a job as you. And you need to start getting work off your plate, training your clients not to expect you to be on all of the accounts. So you can focus on all the things that I'm talking about in this particular podcast that's focusing on the future of your business, having a really clear roadmap. And that brings me on to the next point, which is if you don't have a really clear roadmap for your agency, then you're not going to know where you're going and your team is definitely not going to know where you're going. And at best you're going to go around in circles and at worst, everybody's going to be pulling in different directions. And then you let the world happen to you.
Rob Da Costa [00:06:14]:
And that sort of determines the pathway that your agency takes. So if you don't want to have that as an obstacle, like a lack of roadmap, then make sure you are investing time in documenting a clear vision, a clear strategy and a clear monthly plan. So you want to have a year vision, you want to have a quarterly strategy and you want to have a monthly plan for your agency. And you want to make sure that you've communicated those broader messages to the whole agency so everyone is aligned and excited to go on the same journey as you. Now, the next two obstacles are all about money. And so the first one is really managing your costs so that you are maintaining the margin of say, 30% that you're targeting and that you're not just investing money to grow the agency, but you're finding that your margins are going down and down and down, so that you're kind of being busy, forced and not being profitable. And of course, ultimately that means you can't invest. So you want to really keep a close eye on your overhead costs, your staffing costs, and make sure that you are maintaining a margin of at least or ideally around 30%.
Rob Da Costa [00:07:16]:
And that leads on to the next challenge as well, which is cash flow problems. If we are not allocating enough time to make sure money is consistently coming through the door, even if we're doing the work, then we are going to hit another obstacle and we're going to have cash flow problems which causes major headaches in the short term and probably means that you are at the back of the queue when it comes to being paid. So you need to be really hot about cash flow. Don't let bad debt happen. Make it clear with all new clients what your payment terms are and be really hot at chasing them up. I'm amazed at how many agencies I've spoken to who say we are so busy that we never get our invoices out at the end of the month. And we all know that if we send an invoice on the first of the month rather than say the 30th of the month, then some clients will defer payment for another 30 days based on their pay runs. So you want to make sure that you are allocating time or you have a VA or a bookkeeper that is ensuring that you are getting invoices out on time and that you are billing for all the work you do.
Rob Da Costa [00:08:18]:
So you want to have this commercial mindset amongst all of your team as well as yourself to make sure that we are billing for the work that we're doing. We're not being a charity. We are getting invoices out on time because we desperately want to avoid having any kind of cash flow issues in our business. Now, something else that might become an obstacle further down the road, but may not be when you start out, is lack of differentiation. And if you listen to this podcast or follow me anywhere else or read my content, you know I am a massive fan of having a clear niche because when you have a clear niche, it becomes much easier for you to target your customers and then for them to find you. You start to look different to the competition and you position yourself as the expert. And we all know that the expert can charge more money than the generalist. So it might be at a certain point that you find this lack of differentiation is really making it hard for you to stand out and therefore you're winning business because you're cheaper than other people in your industry and because you just look the same as everybody else.
Rob Da Costa [00:09:19]:
So how do you differentiate yourself? And that's not a good way to differentiate yourself. So make sure you have done some work on your niche and you are really clear about who your ideal target customer is. You've got a really unique value proposition that sets you apart from the competition and then that will not be one of the obstacles that stops your agency growing. Now, much of what I've talked about in the podcast so far is cyclical. It's not like you look at this once and then it's fixed and you move forward. But you have to keep revisiting all of these things before they become obstacles. So you want to be hot on your cash flow, you want to make sure that you have the best marketing and lead generation strategy, you want to be really good at closing the deal, you want to be good at keeping your clients, you want to be good at getting new revenue from existing clients. And these are all strategies that you need to keep revisiting, as indeed you do with your plan for the business as well.
Rob Da Costa [00:10:10]:
Now, I said earlier that I was going to talk about some of the typical kind of stumbling blocks or those brick walls and they typically happen when you are about 250,000, when you're about 750,000, when you're about 1.2 to 1.5 million, and then again when you were at 3 million. Those are the sort of cycle points where you really need to stop and think, if I want to grow beyond this point, what do I need to do? And if you apply some of the advice that I've outlined in this podcast, then it's going to get you focused on the right area. Of course, it's not going to solve everything. And as ever, if you want to have a chat about where your agency is at and how to get over some of these obstacles, then do. Make sure you book a free strategy call and let's have a one to one conversation about where you are, what your challenges are, what those obstacles are. And let me help you move beyond those obstacles so that you can scale your agency and do it in an enjoyable, profitable and sustainable way. Which is what I am all about helping my clients do. So I covered a lot of ground in today's episode.
Rob Da Costa [00:11:10]:
I hope you found it useful, I hope it's given you a bit of food for thought. I hope you can kind of relate to some of those points and think, yep, that's going on for me. And you can start thinking about how you can solve some of those obstacles so you can smash through that brick wall and move to the next stage of your agency's growth. Now, it's worth saying as well that even if you're a one person agency and you never want to grow beyond that, you still need to apply all that we've been saying here because outsourcing or delegating might well be. To a VA or a team to just get work that could be done by somebody else off your plate, leaving you freed up to focus on the things that only you can do, which is usually around the future of your agency, around infrastructure and business development and planning and new business and all that stuff. Anyway, hope you found it useful. If you did, please make sure you share the episode. Please do consider leaving a review on Apple podcast because you know that really helps the algorithm.
Rob Da Costa [00:12:00]:
Show the podcast to more people just like you, which means I can help more people. Other than that, I hope you have a fantastic rest of your week and I will see you next week for the next episode of the Agency Accelerator Podcast.