Welcome back to the final article in this series. Last time, we covered some of the most common problems you encounter when scaling your agency from “small” (5 or fewer employees) to “boutique” (10-15 employees), and how you can avoid them. If you missed that instalment, you can check it out here.
This week, we’re going to look at the next stage in the process – moving from “boutique” to “medium” (10-15 employees to 25-30 employees). Just like the last stage, there are certain challenges that routinely crop up as you start to add more employees into the mix. Let’s examine those issues in more detail.
Stage 2: Boutique to Medium
Scaling your agency from 15 employees to 25-30 employees is not as simple as stacking more and more people on top of existing infrastructure. As we discussed last week, a dysfunctional foundation will collapse when it’s put under too much stress. Similarly, if your agency doesn’t run well when it’s small, it’s unlikely that things will improve as you get bigger.
However, the single biggest issue that holds back agencies looking to make the leap from boutique to medium-sized isn’t infrastructure. If you focused on putting the right systems & processes in place earlier on in the process, you should find that most of your systems scale up readily to accommodate new employees. Sure, there may be some hiccups, but overall, intelligent design and selection of your internal processes will serve you well.
Anything you neglected to reinforce earlier on (e.g. IT systems, finances, communication) may come back to bite you here, so make sure to take the time to strengthen these systems now, before they can cause real problems.
Neglected system upgrades notwithstanding, the principal obstacle you must overcome at this stage relates to skills.
Overcoming the Skills Gap in Your Agency
When scaling your business from solo to small, you had to grapple with making your first hire. Here, you had to make good choices and bring on employees that possessed the skills your agency needed.
As you continued to scale your business from small to boutique, your attention shifted away from people and onto systems. Making good hires was still important, but you also had to ensure that your infrastructure was robust enough to sustain your growing operations.
And now that you’re looking to scale from boutique to medium, your focus returns to people. But it’s quite possible that the skills you need at this stage in the journey are different from those you needed earlier on.
Many agencies are top-heavy when they start out. If you have multiple owners, it’s likely that you’re all doing a substantial amount of work. When you take on a few employees, the work starts to get more dispersed and your time frees up. The top-heaviness of the agency decreases as more and more lower-level employees join the ranks. However, this leads to a growing gap between top management (i.e. you and the other owners) and junior staff.
This gap can cause problems, particularly as you endeavour to scale your business further. Making strategic business decisions and focusing on the future of your agency requires the space to do so – breathing room from the everyday hustle and bustle of managing operations. Without being able to safely delegate your duties, it can be hard to get this time to work on the future. And this can be compounded by the fact that your key clients all expect YOU to be working on their account!
If you’re not careful, you can be caught in between roles: not stuck in the business, but not free to work on the business either.
The solution to this problem is twofold:
- Ensure that you have the right functions filled in the agency
- Bring in more senior staff (maybe a general manager) to oversee day-to-day operations
Let’s look at these two areas in more detail.
Functional & Managerial Capacity
Simply put – if your skills/expertise are integral in delivering great client work, you won’t have the time you need to focus on scaling the business effectively.
There’s nothing wrong with having an input into the work, or being in a position to guide your team. But if your valuable time is spent doing work that someone else could be doing, you need to consider introducing more senior experienced staff into the organisation.
The best way to determine if this is an issue in your agency is to look at your current employees. Consider the following:
- Is there a clear skills gap between top management, your few star employees, and the rest?
- Is there an obvious bottleneck individual in the business (someone who needs to sign off on work, or is frequently sought out to get things moving)?
- Are you overly reliant on “Jack of all trades”, or do you employ a number of specialists?
With reference to questions like these, it should soon become apparent if you have issues in this area.
If you’re still required to oversee day-to-day operations and closely manage employees, your time is still being used up IN the business, so who is working ON the business?
The lines between your competing delivery, managerial and leadership roles blur as your agency scales. It can be hard to grow the business effectively when you have so many demands on your time.
When scaling your agency from 15 employees to 25+, you’ll probably find that there’s an awkward transition period. The demands on a handful of vital core staff (e.g. yourself, or some key employees) increase dramatically, which can then lead to decreased performance, slower delivery, and even burnout.
The solution is to identify these issues before they can cause real problems. You know you need to invest in people, but what does that look like?
- You may need to restructure your business. For instance, this could entail the promotion of existing employees to higher positions, then making an additional hire or two to fill their old positions.
- You may need to train up existing staff (i.e. for a leadership role, or even just a different functional skill to reduce over-dependence on key employees).
- You may simply need to make hires in some area. Perhaps you need additional client-facing staff, support staff, or a middle manager.
- You need to get comfortable with your new more ‘hands-off’ role as you focus on guiding the agency forward.
Whatever the case may be, you have to invest in people at this stage in your journey. The systems you put in place previously (when growing from small to boutique) should serve you well, but remember to proactively improve matters in this area too.
This is the final article in this “Scaling Your Agency” series. When moving from ~15 employees to 25+, it’s rarely systems that hold you back. There’s little difference (conceptually speaking) between the infrastructure required to run an agency of either size. Payroll, communication, IT, finance… unless you’ve seriously neglected one of these areas, it’s unlikely to be your primary stumbling block.
Instead, the obstacle you must overcome at this stage relates to skills. Whether you restructure your business, hire new employees or train up existing staff, you have to ensure your agency possesses the skills required for growth.
As you continue to scale, you need more time to work on the business, not just in the business. If you’re trapped in a functional role all day, you won’t have the time or energy to make smart strategic decisions. For the good of your agency, you have to step back from day-to-day operations (in both a functional and managerial capacity). Take care of this, and your journey towards building a bigger, more profitable agency will be a whole lot easier.