Building a Resilient Agency: Strategies for Recession-Proofing Your Business

  • Home
  • /
  • Blog
  • /
  • Articles
  • /
  • Building a Resilient Agency: Strategies for Recession-Proofing Your Business

Are you an agency owner struggling with the roller coaster of feast or famine in your business? Do you find yourself swamped with work one minute, only to scramble for new clients the next? If so, you're not alone. Many agency owners experience this challenging cycle, but the good news is that there are strategies you can implement to break free from it and create a stable, profitable agency. In this blog post, we will explore practical tips and insights to help you weather any economic storm and keep your agency thriving, regardless of market conditions.

Understanding the Feast or Famine Cycle

The feast or famine cycle is a common pattern that many agencies find themselves trapped in. It involves extreme fluctuations in workload and revenue, leading to serious consequences for the agency, including cash flow problems, stress, and burnout. This pattern is often caused by factors such as a lack of consistent marketing, reliance on a few big clients, and neglect of business development efforts.

Breaking Free from the Cycle

To break free from the feast or famine cycle and achieve a more consistent, predictable flow of work and revenue, several key strategies can be implemented.

Diversifying Your Client Base

It's crucial not to rely too heavily on a small number of clients as it can leave the agency vulnerable to unexpected client losses. Creating a balanced client portfolio can help mitigate risks.

Expanding Service Offerings

While diversifying, it's important to expand service offerings without diluting the agency's niche or unique selling points. This can help in weathering fluctuations in demand.

Learn more about getting your own AI Coach

Get Unlimited 24/7 Coaching From A £1m+ Agency Expert For Just £14.99/month

Consistent Marketing and Business Development

Protecting time for business development, even during busy periods, is essential. This involves leveraging partnerships, referrals, networking, as well as maintaining a strong online presence and content marketing strategy.

Building a Financial Buffer

Maintaining cash reserves for lean times is vital for financial stability and peace of mind. It requires careful financial management and implementing strategic cost-cutting measures when necessary.

Conclusion

In summary, the key strategies to avoid the feast or famine cycle and create a more stable, profitable agency include diversifying the client base, consistent marketing and business development, protecting time for business development, and building a financial buffer. The importance of effective time management, prioritization, and having the right mindset was also emphasized.

The power of being proactive in implementing these strategies, even when things are going well, cannot be overstated. Remember, the key to a successful and profitable agency is consistency and proactive planning.

Questions and Answers

Q: Why is it important to diversify your client base?
A: Diversifying the client base is crucial to avoid over-reliance on a small number of clients and mitigate the risks of unexpected client losses, which can significantly impact an agency's revenue.

Q: How can agency owners protect time for business development during busy periods?
A: Agency owners can protect time for business development through effective time management and prioritization, including delegation and outsourcing, automating processes, leveraging technology, and learning to say no to low-priority tasks and clients.

Q: What are the consequences of neglecting business development?
A: Neglecting business development can lead to a drying up of the client pipeline, cyclical revenue patterns, financial instability, stress, and burnout, hindering the agency's growth, stability, and profitability.

Q: What key lessons can agency owners learn from real-life examples of successful agency owners who have broken free from the feast or famine cycle?
A: Agency owners can learn the importance of diversifying the client base, consistent marketing and business development, protecting time for business development, and building a financial buffer from real-life examples.

If you want to listen to this episode as a podcast, click below:

Links to the tools I mentioned in this episode: 

 Full Episode Transcription

Rob Da Costa:

Hey there, agency owners. Have you ever found yourself riding the roller Costa of a feast or famine in your business? You know, one minute you're swamped with work, and the next you're scrambling to find new clients. But what if I told you there was a way to break free from the cycle and recession-proof your agency, ensuring a steady flow of clients, and revenue, even during these challenging economic times? In today's episode, we're gonna dive deep in the strategies that can help you weather any economic storm and keep your agency thriving no matter what the market conditions are. We'll explore practical tips and insights based on agencies who have successfully navigated through recessions and tough times, and I'll share actionable advice that you can implement right away to future-proof your business. Imagine running an agency that's not just surviving, but thriving regardless of the economic climate. Imagine having time and space to focus on growing your business without constantly being pulled into client work. So if you're ready to take control of your agency's future and recession-proof your business, then you won't wanna miss this episode.

Rob Da Costa:

So grab a pen and paper and your beverage of choice because we'll be sharing some invaluable insights and practical strategies that you can start implementing right away. So let's get started. I'm Rob Costa, and this is the Agency Accelerator podcast. As someone who has stood in your shoes, having started, grown, and sold my own agency, and I 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. Hey, everyone. I hope you are having a great week. Now before we dive into the strategies to recession-proof your agency, it's important to understand the feast or famine cycle and why it's so detrimental to the long-term health and sustainability of your agency.

Rob Da Costa:

The feast or famine cycle is a pattern that many agencies find themselves trapped in, and I'm sure you are aware of this. It goes like this. 1 month you're swamped with work burning the midnight oil to meet client demands and deadlines. Your team is stretched thin, and you're even considering hiring additional help just to keep up with the workload. But then just as quickly as the work piled up, it suddenly dries up. Projects wrap up. Clients go quiet. Your pipeline starts looking alarmingly empty.

Rob Da Costa:

You find yourself scrambling to bring in new business, often discounting work or taking the wrong kind of client on, which is a whole other story, whilst also trying to keep your existing team billable and productive so that you can just pay all the bills. The cyclical pattern of extreme highs and loans can have serious consequences for your agency. During those feast periods, you risk burning out your team, sacrificing quality work, and potentially damaging client relationships due to the overwhelming workload. On the other hand, during famine periods, cash flow can be a major issue, making it difficult to keep your team intact, let alone invest in growth initiatives like marketing and business development. Worse still, this cycle can create a vicious loop where you're so focused on servicing clients during those busy times that you neglect business development efforts leading to the inevitable famine when projects wrap up. Look, I've seen agencies getting trapped in this cycle time and time again, and it's a major contributor to the high failure rate in our industry and also burnout. In fact, studies have shown that agencies that experience extreme fluctuations in workload and revenue are far more likely to struggle with profitability and, of course, long-term sustainability. So why does this happen? Well, there are several reasons.

Rob Da Costa:

It could be due to a lack of consistent marketing, relying too heavily on a few big clients, word-of-mouth and referrals, or just not having a robust sales pipeline. But whatever the cause, the impact on the agency is significant. It can lead to cash flow problems, stress, and burnout. And not to mention, it will hinder your agency's growth and stability and delivering that plan that hopefully you've got. But here's the thing, it doesn't have to be this way. The feast or famine cycle is not an inevitable part of running an agency. With the right strategies and mindset, you can break free from this cycle and create a more stable, profitable business, that's exactly what we're going to explore in this episode. So how do you break free from this cycle and achieve a more consistent, predictable flow of work and revenue? Well, I'm gonna answer that by sharing some proven strategies and insights from agency owners who have successfully weathered the economic storms and maintained steady growth even during these challenging times.

Rob Da Costa:

This episode is sponsored by Creative Crew, a community for web designers. Creative Crew exists to help web designers succeed in business. Through industry-leading training, coaching, and focused content on the business of design, they enhance skills, enrich networks, and harness collective wisdom for greater professional success. So go to creative crew community.com to join. Now that we understand the risks and challenges posed by the feast or famine cycle, let's dive into some practical strategies that can help you achieve a more consistent, predictable flow of work and revenue for your agency to help avoid that feast or famine cycle. These are tried and tested methods that can help you create a more stable, predictable agency just like they help many of the agencies that I work with in my group coaching program, The Self Running Agency. 1st, let's talk about diversifying your client base. It's crucial to not rely too heavily on 1 or 2 clients.

Rob Da Costa:

You've probably heard of the 80-20 rule. You know, where 80% of your income comes from 20% of your clients. Well, first of all, it's great having those big clients. But what if one of them leaves? It can have a significant hole in your revenue, and it can be through no fault of your own. So aim for a balanced client portfolio to weather any unexpected client losses and make sure you're mitigating those risks against 1 or 2 big clients. In addition to diversifying your client base, you can also consider expanding your service offering. This can help you weather fluctuations in demand. However, a word of caution here.

Rob Da Costa:

Don't dilute your niche or what makes you unique. It's all about finding the right balance between diversification and specialization. Next, we need to focus on making sure that we have a consistent marketing and business development process in place. It's absolutely essential to protect some of your time for business development even in busy periods. That's probably the most important bit of advice I can give you today. When it's all hands on deck, when you're stuck on the client service, hamster wheel of doom, you still need to protect time to work on business development. Your future self will thank your present self. And this is where many agency owners fall short.

Rob Da Costa:

When they're busy, they stop prospecting, Then, of course, work dries up, and they're back to square 1 and back in this repeating cycle. So make business development a regular part of your schedule no matter how busy you are. I know that's easier said than done, but it is absolutely possible to get some good boundaries in place and protect some of your time. Make sure you're leveraging partnerships referrals and networking, and these can be powerful tools for generating new business. And don't forget about maintaining a strong online presence and having a consistent content marketing strategy. These are long-term investments that will pay handsomely. Remember that all the best robust business development strategies deliver in the medium to long term, but you need to get started today to get to that medium or long-term result. And as I said, it's easy for that to go by the wayside when you're really busy.

Rob Da Costa:

Finally, let's talk about building a financial buffer. It's really important to maintain cash reserves for those leaner times. This can provide you with the peace of mind and financial stability to navigate through quieter periods without panicking and making bad decisions. It's all about having a safety net that allows you to make decisions from a place of security rather than from a place of desperation. Now building a financial buffer doesn't happen overnight. It requires careful financial management and sometimes implementing cost-cutting measures when necessary. But remember, it's not about slashing Costa recklessly but making strategic decisions that protect the health and longevity of your agency. So there you have it.

Rob Da Costa:

Diversifying your client base, consistent marketing and business development, protecting your time, and building a financial buffer are 3 key strategies to avoid feast or famine. By implementing these strategies, you can help create a more stable, profitable agency that's equipped to weather the ups and downs of business and those challenging economic times like we're in right now. I just wanna spend a few moments going back on what I just said, which is all about protecting some of your time for business development. Because I know that this is something many agency owners struggle with, especially during those busy periods. But here's the thing, if you want to create a stable profitable agency, you need to make business development an absolute priority regardless of how busy you are. So how can we do this? Well, it all comes down to effective time management and prioritization, and there are several strategies that can help you with this. First of all, delegation and outsourcing. If you're spending too much time on tasks that could be handled by others, then you need to delegate them.

Rob Da Costa:

This will free up your time to focus on those higher-value business development activities. And remember, delegation isn't about abdication. It's about empowering your team and allowing them to grow and develop. Next, automating processes and leveraging technology. There are many productivity and time management tools available today that can help you stay organized and focused. From project management tools to CRM, to some AI tools, these can help you save a significant amount of time, and I wish they'd been around when I was running my agency when the best technology we had was a spreadsheet. And finally, saying no to low-priority tasks and clients. Now I know this can be a tough one, especially when you're starting out.

Rob Da Costa:

And, of course, we all believe we can do things better, faster, quicker than everybody else. But remember, not all clients are created equally. Some clients can drain your time and resources leaving you little to show for it, and, of course, those are the unprofitable ones. So be really selective about who you work with and what tasks you take on. Now you might be wondering what happens if you neglect business development or perhaps you have neglected business development. So you can answer this question for me because the consequences can be severe. Your pipeline will dry up, which will lead to cyclical revenue patterns and financial instability. And once you fall into this cycle, it can be really tough to break free.

Rob Da Costa:

You might find yourself scrambling for new clients, taking on the wrong kind of client, or discounting your work just to fill your order book. And, of course, this will lead to stress and burnout. And in the long run, it will hinder your agency's growth, stability, and profitability. Protecting time for business development isn't just a nice to have. It's an absolute must-have. You need to see this as your top priority, not something that can easily be let go of when clients are demanding. By delegating, outsourcing, and automating processes, and learning to say no to low-priority tasks and clients, you can free up your time to focus on business development. And in doing so, you can create a more stable profitable agency that's equipped to weather the ups and downs of business.

Rob Da Costa:

Now a big part of this is getting your mindset right. Because if you believe you are the only person who can do something or you can't afford to outsource or it's quicker to do it yourself, then, of course, you'll never gonna let go. But you need to really develop an entrepreneurial mindset rather than a freelancer mindset. Now I'd like to share a real-life example of an agency owner I worked with who was facing the feast or famine cycle. Let's call him John. John ran a successful digital marketing agency with a team of 5, but he was constantly riding the roller Costa of busy periods followed by quiet ones. It was causing him tons of stress and impacting the stability of the agency. He was really embedded in client service and knew that he needed to step out of it but didn't really know how to.

Rob Da Costa:

So we worked together to implement the strategies we've discussed in this episode. Firstly, we looked at his client portfolio, and John realized that he was over-reliant on a couple of big clients. So he started actively seeking out new clients to balance his portfolio. It wasn't easy and it took time, but because he had a proactive business development strategy, it paid off. Today, he has a diverse range of clients that provide a steady stream of income. So we then focused on a consistent marketing and business development strategy and plan. John admitted that he often neglected this area when he was busy, and up until now, he had built his agency using referrals and word-of-mouth. So we worked on strategies to protect time for business development even during those busy periods.

Rob Da Costa:

This included getting work off his play, automating some of the tasks, streamlining processes, and saying no more often to both low-priority clients and to prospects that weren't a great fit. As a result, John was able to maintain a healthy pipeline of potential clients even during busy periods. Finally, we worked on building a financial buffer. John started setting aside a portion of his profits each month to build up his cash reserves and hit his target of having 3 months of money in the bank. This gave him the financial security to navigate those quieter periods without him panicking and making some of those shoot-from-the-hip decisions. John's story is a testament to the power of these strategies. Today, his agency is more stable. He's grown it to 8 people.

Rob Da Costa:

It's more profitable, and he enjoys running it. He's no longer riding that feast or famine roller coaster. Instead, he's steering a steady ship with a clear direction and mostly a calm sea ahead. The lessons that John learned along the way were invaluable, and they're the ones that I've covered in today's podcast. He learned the of not putting all his eggs in one basket when it comes to clients, the necessity of consistent marketing and business development and protecting time to work on that, and the peace of mind that comes with having a financial buffer. So John's advice to other agency owners is don't wait until you're in a place of famine to start implementing these strategies. Start now even if things are going well because it's about being proactive rather than being Well, we've covered quite a bit of ground in this episode, haven't we? So let's quickly recap the main points. We started by discussing the importance of diversifying your client base and not relying too heavily on a single client or 1 or 2 clients.

Rob Da Costa:

We also talked about the need to expand your service offering, but without diluting your niche or what makes you unique. Next, we delved into the importance of consistent marketing and business development even during those busy periods. We explored how to leverage partnerships, referrals, and networking, and the significance of maintaining a strong online presence and content marketing strategy. We also discussed the importance of building a financial buffer maintaining cash reserves for those lean times and implementing cost-cutting measures when necessary. We then moved on to talk about protecting time for your business development and strategies for time management and prioritization, including delegation and outsourcing, automating processes, leveraging technology, and learning to say no more often. Now it's over to you. I encourage you to take action and implement the strategies we've discussed today or at least take one action. What's that one thing that you're gonna do differently as a result of listening to today's podcast? Remember, the key is to be proactive rather than reactive.

Rob Da Costa:

Don't wait until you're in a famine phase to start making changes because they're really difficult to do when you're desperate for money. So start now even if things are going well. Okay. There you have it. So if you found this episode useful, please subscribe to the podcast. Make sure you're following us on social media for more insights and practical tips. And please do consider leaving a review because it helps the algorithm share this podcast with more people just like you. And if you're an agency and you're looking for a supportive community, consider coming along to one of our free value, no-sales agency accelerator live events covering a multitude of topics, including beast or famine.

Rob Da Costa:

And I'll put a link in the show notes to that as well. So thanks so much for tuning in today. And remember, the key to a successful profitable agency is consistency and proactive planning. So let's get out there and start making positive changes. Until next week, keep growing, keep learning, and keep enjoying the journey of running your agency. I'll see you next Thursday for the next episode of the Agency Accelerator podcast.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}