$1.2M to $10M in 12 months, and $10M to $20M 12 months later. That would be impressive for a software business, but for a service business? These kinds of results seem, frankly, almost impossible… How does a company attract leads, hire people and create the throughput to deliver work to clients that fast?
These are all the questions I had for John Logar when he told me about the kind of results the agency he co-owns was getting.
What he shared with me was fundamentally the same as what I’ve heard chatting with other coaches and founders that have either built or coached some of the fastest growing agencies on the planet. The common thread with all of these agencies has been an unshakeable focus and discipline on 4 key pillars of growth.
I’ve decided to take these 4 pillars and organize them in a way that I hope will be easy to digest and take action on. So with that, allow me to introduce you to the Agency Scaling Quadrant™
Pillar 1: Precision
When we think and talk about scaling, we tend to put a lot of focus on attracting clients. No matter what the size of your agency, this is always going to be a top priority if you’re trying to grow.
Naturally, some of my first questions around how these agencies were growing so fast were geared towards uncovering the elaborate, new age, top secret marketing tactics these agencies were using to attract high value, low churn clients at scale and keep their sales cycles short.
Much to my surprise, the answers I got had nothing to do with complexity, in fact, what was working best for these agencies was the opposite. What all these agencies had in common was that they all took a laser focussed approach to some incredibly important things:
Key Areas of Precision:
Product:
They offered less services, not more, and focussed on being world class at just a few important things. Some even went as far as to create a series of productized offerings.
Positioning:
Most of them chose specific industries and verticals to service and developed deep expertise and authority in those markets, learning how to speak to their target client with a level of understanding that nobody else could match.
Pricing:
They focussed on a specific type of client and deal size and got really good at understanding the needs of that type of client. This allowed them to get insanely good at reaching, speaking to & servicing their clients.
Channel:
They spent time focussing on just a few channels and getting really good at them, getting world class results on a few channels rather than mediocre ones on a whole bunch.
Conversion:
Like channels, they focussed on a small number of conversion methods and spent time getting insanely good at them so they could close deals at an extremely high rate.
As counterintuitive as it sounds, this less is more approach is what allowed these agencies to start dominating in their market and winning deals over more seasoned agencies. This precision also allowed them to go extremely deep on every aspect of their revenue generation engine. Increasing their understanding and performance in every aspect of the business, from marketing to sales and even estimating and executing on production.
Pillar 2: Planning
One of the most common challenges agencies experience is a lack of visibility. Most agency owners I speak to can’t see past the next 60 or 90 days with any level of accuracy, making it hard to plan for the future.
Because of how unpredictable client work can be, planning resources, predicting cash flows and profits can feel almost impossible.
One of the magical things that starts to happen when an agency practices high levels of precision in the clients they serve and the services they sell is an increased level of accuracy when it comes to estimating work. Not only does this help these agencies consistently hit their profitability targets, it also gives them a superpower that most agencies can only dream of.
That superpower is the ability to start creating precise forecasts for things like cash flow and profitability, resource utilization and capacity.
This high level of predictability allows agencies to scale their capacity for throughput with almost perfect timing. Making investments and staffing up quickly all while maintaining cash flow.
Imagine knowing exactly the type of employee you need to hire, how much you can pay them, and how long it will take for them to become profitable months in advance? That’s the level of ninja we’re talking about here.
There are a few important plans high growth agencies are extremely good at:
Key Areas of Planning:
Sales & Marketing plans:
Knowing exactly what channels they’re pursuing and measuring results to predict what kind of business they can expect to get from those channels.
Project plans:
Creating detailed budgets and timelines to maximize efficiency and profitability for client work. The key here is learning from past mistakes and using that learning to create more accurate estimates going forward.
Staffing & Hiring plans:
Using pipeline and Project plans to understand when to hire new employees, what kind of workload current teams are under and who to distribute work to.
Financial Plans:
Using all the plans above to drive out a forecast of top-line revenue, costs, and profits. The goal is to make sure all subsequent plans add up to a profitable forecast and will create the cash flow needed for the business to continue financing growth.
Pillar 3: People
You just closed a big client and are trying to figure out how you’re going to deliver the work. You take a look at your team’s schedule and realize they’re all over capacity and you need to hire someone yesterday if you have any chance of getting this deliverable out on time. You desperately post job ads and start interviewing the first few candidates that apply.
You hire a young, slightly under qualified C-player, throw them into the deep end without a swimming lesson and end up going way over schedule and budget on the project. That employee has a bad on boarding experience after getting dropped into chaos from day one. They end up quitting a few months later.
Sound familiar? We’ve all been there.
Needless to say, it’s not the best way to hire.
Another critical focus for high growth agencies is on how they manage people. From hiring the right ones and getting them up to speed quickly to maximizing their efficiency and keeping them around for a long time. They’re pros at setting their teams up for success.
How do they do it?
It all comes back to that high level of precision and visibility. By being able to see when they’ll need new team members ahead of time, they can start sourcing and interviewing talent ahead of time. By having a very precise type of client and service offering, they can create very robust onboarding and training sequences to get their new team members up to speed at a fast pace.
By consistently having the right amount of employees to service workloads, their capacity tends to get much more consistent too. That means the team isn’t constantly working overtime or having too much work dumped on their plate.
All this leads to a stable working environment that allows people to do high-quality work, stay highly productive, all while maintaining their health and sanity. This doesn’t just benefit the new hires, it benefits everyone including clients and families.
It’s no surprise that they tend to enjoy a much higher level of retention with their employees and usually gain a reputation for having great culture and working conditions, attracting the top talent to their agencies.
Key Areas of People:
- Hiring ahead of time
- Having great on-boarding and training sequences
- Managing capacity and workloads
Pillar 4: Performance
An airplane on autopilot makes thousands of adjustments during a flight to account for small changes in air density, wind, temperature, etc. Without these adjustments, it could easily end up hundreds or even thousands of miles off course.
The same type of thing is true for agencies. Because of how unpredictable service work can be, it’s critical to be measuring every aspect of the agency on a regular basis to make sure adjustments can be made to keep profits, utilization, capacity, budgets, timelines and much more where they need to be to keep things growing smoothly.
What high growth agencies do extremely well is make sure everyone in their organization is aligned around growth and performance. This means clearly communicating what they’re responsible for, what they need to produce and exactly how they’re performing relative to those goals and targets.
By having a regular reporting cadence for each level of the organization, teams can become more independent. Less micromanaging needs to happen for budgets and timelines to be met, and weaknesses/opportunities can be quickly identified and addressed.
The two important factors for managing performance are:
Key Areas of Performance
- Clear goals & targets for every member of the team.
- A regular reporting cadence showing the team how they’re performing relative to targets.
The majority of the agencies in that high growth bracket I’ve spoken to are reporting on KPI’s daily or even in real time to keep their teams aligned, informed and motivated. It’s no surprise that agencies who report on KPI’s regularly have a higher average profit margin than those who don’t.
Besides making more money, another profound shift that occurs when agencies have a highly data-driven approach is that they can become increasingly results-driven as a company.
That means the ability to give employees and teams way more autonomy about how, where and when they work. As long as they’re meeting expectations from a results and output perspective, they can do whatever makes them happy. The more precise and up to date that data is, the more quickly managers can identify A players, as well as those who aren’t performing.
This gives everyone the empowerment they need to do great work, identify gaps and measure the impact of their efforts.
Tying back to people, these kinds of work environments tend to be the ones that attract and retain top talent, especially the next generation of young independent creatives.
The Next Step:
As Bruce Lee once said: “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
In the end, the simplicity of creating more focus around solving specific problems for specific types of clients creates a powerful opportunity.
It’s the opportunity to create more authority in the market. To create more precision and efficiency at every stage of the agency. To deliver more expertise, create more value and In the end, to create an agency designed to scale.
So what’s the next step for your agency? We’ve designed some resources in our Agency Scaling Playbook to help you audit your agency and identify your #1 opportunity for growth. Check em out… they’re free!
Download the Agency Scaling Playbook™️
Marcel Petitpas
CEO & Co-Founder
Based in Moncton, NB Canada Marcel is the CEO & Co-Founder of Parakeeto. He’s on a mission to build the worlds best workplace at Parakeeto. He believes work should give us more energy and inspiration to serve our families and communities, not drain us of our will to live. He started Parakeeto so he could help agencies create and predictable and stable environment, so they can produce their best work and live a more balanced life.
