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How to Start an Agency In Terms of Resources and Organization

How to Start an Agency In Terms of Resources and Organization

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Starting an agency might seem like a Herculean task, so we prepared valuable tips on founding (and scaling) an agency. Filip and Gio focused on resources and organization because they’ve seen new agencies make the same mistakes too many times.

 

But with insights from the latest Maoio podcast episode and this article, the beginning of your entrepreneurial journey doesn’t have to be stressful. It’s the same if you’re a solopreneur, a 2-man band, or a well-oiled team. Unless you’re lucky to cover everything there is to know about business, you’ll experience stressful moments. But if you do well with organization and time management, you’ll reduce the number of unpleasant surprises.

 

The Organization Should be Lean and Systematic

Filip and Gio have consulted many agencies out of the unprofitability pit. They agree that too many business owners bite more than they can chew. It’s tempting to (try to) build a big agency from the start. The status, massive revenue, great projects, and clients. All of that lures new agencies into the quicksand of overspending. Even worse, they invest in areas they don’t need.

 

It’s common for teams to try to work on their weak sides, so they can become all-rounders. It even makes sense when you say that to someone… Until you think about it.

 

If it takes years to develop the skills, it’s impossible to master other business aspects instantly. Again, that depends on the size of the team. A team of 10 experts with decades of experience could expect to grow faster because they’d cover more fields. But even in that case, as Filip said, it’s better to develop a leaner and more systematic organization.

 

The more systematic and clean your processes are, the smoother your agency will work. To achieve that, you need to focus on the stuff you excel at. If you try to do everything on your own (or with your team), you’re likely to spread yourself too thin. As you’ll see later, that’s almost as dangerous as spreading yourself too thick. 

 

Find balance. Cover the respectable fields you can. Engage with professionals (freelancers and contractors) to help you where you lack expertise or experience. No matter your problem, there’s always someone out there who successfully solved it in the past. You need to know the right people.

 

Of course, for that, you need a strong network. And to get a couple of gems on that topic, read what Filip and Gio said about efficient networking.

 

Essential to 3x Revenue – Overplan Everything

 

If the first tip for starting an agency made you think that you don’t need to plan, think again. You can’t be systematic without planning. Don’t fall into the trap. Don’t avoid planning while you’re smaller. It will catch up on you once you scale. And you don’t need to grow a lot to see the importance of planning. One extra client, one project too much, and agencies that don’t have every detail planned to get shaken.

 

The pandemic came out of nowhere and erased thousands of agencies. It’s sad to say, but many of them went extinct because they didn’t plan well. Gio said that overplanning everything is essential to double or triple your revenue. A detailed plan that covers every possible situation gives you the inner peace needed for growing an agency.

 

Of course, unexpected things happen. But if you’re well organized, it’s easier to adapt. You may lose clients for numerous reasons (many of them aren’t in your control).

 

With the systematic approach to client acquisition, you won’t have to build everything from scratch or wander cluelessly. However, recognize when it’s time to change the plan.

 

Have annual, quarterly, and monthly business plans

Monthly adjustments let you stick to the big plan by tweaking and abandoning strategies that don’t work. Adjusting on the go is like living through evolution. You’re becoming better, reshaping yourself. And that should happen again and again, forever. 

 

No, we don’t want to say that you should abandon everything you are every 3 years. But if you come up with an annual business plan and after 3 months it’s clear it needs adjusting, don’t follow it blindly. Change it. Improvise. Adapt. Overplan.

 

That gives valuable data. Over time you’ll learn what resources to focus on and to avoid shiny object syndrome. If a high-end website is out of your budget, don’t sacrifice everything to get it.

 

But a great website will help you with branding. And if you know that your long-term goal isn’t to sell yourself but to brand yourself, a website becomes a powerful tool. However, that doesn’t make it essential.

 

Again, to find out what’s essential for the survival and growth of your agency, over-plan everything. If you don’t plan, you’re setting yourself up for failure. Not having a business plan is one of the 5 most common business scaling mistakes. Yet, it sometimes seems that failing to follow a good business plan happens even more often.

 

One of the reasons for that is…

 

Neglecting Resource Management

 

Resource management and organizations are left on the side because people love sales and strategies. But as you scale, you learn the importance of delegation and organization. That’s the best way to get more done in less time without burning out. Yet some agencies make a mistake and delegate tasks that don’t add that much weight to their workload. Again, as with everything else, it’s not enough to do something; you need to do it right.

 

It’s true for business planning, resource management, and branding.

 

And to polish your processes, monitor (and adapt) your standard operating procedures. Set up the entire ecosystem that can support your growth systematically from an organizational perspective (while keeping the service level quality).

 

Without setting up your processes, bad things can happen. You get new clients and lack people to deliver results, so you’d need to sacrifice quality. Gio beautifully said that you should learn what not to focus on. And accept that your temporary focus shifts.

 

In the moments when you’re swamped, don’t seek new clients. Don’t neglect your marketing and branding, but don’t waste resources on closing new clients if you struggle with the current workload.

 

You also need to expect random, everyday stuff to shake your focus. That’s why balancing emails and time management is an art nowadays. Yet it’s possible if you over-plan, as Gio said.

 

Another mistake new agencies make is doing free work. That prevents growth and drains resources. But there’s a difference between free value and free work. Failing to understand that is one of the reasons why businesses struggle.

 

VITAL – If You Have a Plan That Works – Stick to it

 

Adaptability is the key to survival. We mentioned a couple of times that you should be ready for sudden changes in plans which is 100% true. But we see that agencies abandon proven plans and strategies.

 

If you have a car that gets you from point A to point B in 45 minutes, why would you sacrifice it for a chance to get a car that gets you from point A to point B in 30 minutes?

 

Makes sense only if you have more than one slow car. But if you have a plan that works, you’re sure it will keep working, and if you don’t have enough resources to test the new plan, don’t make any changes.

 

So if you plan to start an agency, don’t move away from the paved path. That’s a common reason for total failure in business. Leave exploring to those with bigger teams and budgets and stick to proven strategies.

 

Don’t Employe Too Soon and Don’t Take Too Many Clients!

Agency owners get too excited. Don’t be like that.

 

People rush to employ new members, which puts them in danger. Filip thinks everyone should have 12 months covered in advance (full) before getting another employee. That ensures nothing can seriously harm the agency if you add another person to the team.

 

Let’s take the pandemic as an example again. When it started, digital agencies were thriving. When things got back to normal, many had to let people go. Why? Because their workload was reduced, and some of the people they hired weren’t good fits.

 

Hiring people only to fire them a couple of months later is a situation you probably want to avoid. But you surely want to avoid keeping too many people you don’t need. We’ve seen agencies hire whole teams who collect dust in the offices.

 

One big copywriting project doesn’t mean they should hire 5 full-time copywriters because projects end. And when that happens, they have 5 copywriters to feed and 0 projects for them. In that case, their teams become nothing more than anchors.

 

So agency owners work around the clock to find projects for the dust-collecting copywriters. And fail because that wasn’t part of their annual business plan. And no one bothered to make any adjustments on the last quarterly or monthly meeting.

 

That’s why you shouldn’t chase new projects without being sure you can survive them. Taking fewer projects and delivering better results helps to position yourself as a partner to your clients instead of a service provider.

 

Potential Future Doesn’t Exist, Move One Step at The Time

 

The previous point helps to explain this one as well. Filip said that the potential future doesn’t exist. That’s what agency owners who hire before closing fail to understand. You can’t hire 5 developers before you have any developing projects going on. You can, but that will drag you to the abyss of gig chasing.

 

That’s why you should take one firm step at a time. Don’t jump. Move slowly but surely. As Filip said, the future starts when you cover an organization, get a contract, and money is in the bank. Not when you say to yourself: “I’m gonna make 14 million dollars through SEO in 2023.

 

Gio wrapped the conversation up with a beautiful metaphor about size.

 

As he said, the bigger agency you build, the more you need to plan because it becomes more complex as you scale. The cruise ship turns very slowly, so it can’t change direction fast (the same is with big agencies). Small agencies move like speed boats (easier to change direction). But without planning, they’re sure to hit some icebergs.

 

Filip ended the podcast by repeating his famous saying, “Do what you do best, pay for the rest.”

 

He wanted to say that you don’t need a massive in-house team to deliver astonishing results. You can team up with external experts and take firm steps in the right direction together.

 

And your next firm step should be to discover mistakes and misconceptions in B2B lead generation.