We talk a lot about Agencies here, but what if you’re currently a freelancer who wants to make the transition to agency owner? This episode of the Agency Profit Podcast should give you some insight into how to move from craftsman to business leader.
About Chris Bantock…
An ex-agency owner for 12 years, Chris sold the business in 2018 and now works to help other agencies to develop their business and grow into business leaders.
Chris then founded Agency Local in 2019; a development community targeted towards the marketing and creative sector. The mission is to help marketing agencies become better businesses and the owners better leaders.
When Chris isn’t coming to the aid of marketing agencies, he is a certified MAMIL (middle-aged man in lycra) and can be found hurtling around hillsides at the weekend.
Points of Interest…
- Challenges When Running an Agency 1:58
- Ceiling Encountered When Running a Business Longterm 5:22
- Business is Always Broken 7:57
- Keys to Making a Successful Transition to Business Leader 17:23
Challenges When Running an Agency
Chris and I share a history – by exchanging wisdom via content collaborations! On this occasion, however, I’m asking him to share why and how he came about exiting his agency after 12 years, and the challenges he faced in doing so.
“Any sort of business is always challenging… however, most challenges tend to center around people; creating the culture for people to do their best work, or constantly looking after people, improving people, while helping them to develop. There’s also that constant challenge of getting clients. A lot of agencies tend to work on a ‘feast or famine’ cycle, and we were no different.”
To increase/maintain a steady stream of work/projects coming into your agency, you need to be constantly improving your processes. In other words – yes, you can enjoy where you are, but don’t rest on your laurels. There is always something that needs improving in a business.
Said business started as a full-service agency thanks to the merging of three existing businesses. One was a branding business, one was a very technical web development application development business, and the other was a digital marketing business.
After Chris’s partners had to step back from the business due to health reasons, it was time for him to think about niching down. So, he and his team re-evaluated their position and focused on digital; after all, that’s where the market was clearly headed at the time.
As for exiting the business; he wasn’t looking to sell, but an opportunity presented itself. So, Chris got curious and followed the white rabbit, as it were.
Ceiling Encountered While Running a Business Longterm
What kind of a scale did your agency over 12 years get to, and were there any ceilings Christ encountered/got stuck under along the way?
“We were 15 people at our height; a 700k type turnover business. This is why Agency Local focuses on that size of business because that’s what we know… There are always ceilings. When it comes to that pivotal half a million turnover, you will always encounter a ceiling.”
Typically, the most notable ceiling in question here is in terms of employees. When you’re in the region of five to eight employees, you can get away with flying by the seat of your pants – largely because you spend what should be your downtime (evenings and weekends usually) subsidizing mistakes you may make along the way! At that point, you still have enough bandwidth to eat that cost. Once you get past that eight-ish people – probably where you’re starting to close in on $500,000 in revenue – then you don’t have the capacity to absorb mistakes anymore.
Additionally, making that jump from five people up to 10 brings with it a different environment. When you’re smaller, you’re dealing with individual personalities, whereas when you increase your employees you need to create that work culture – that works without you being there.
When you encounter the first major ceiling, that being size, you need to start devising another more comprehensive level to Process, People, and Leadership.
From a personal perspective; when I first started my business, I had this super naive expectation that – one day – we’re going to make it! Everything will just magically fall into place and all the day-to-day issues would miraculously disappear as I’d figure out everything. As most entrepreneurs can attest to, that is not the case… the day-to-day issues in fact get bigger…
Side note: our Agency Profit Toolkit is a one stop shop for you to be able to outline some of these crucial profitability numbers to a potential buyer. Spreadsheets, templates and training videos, you name it, it’s all in the toolkit. Grab yours free at the link below:
Business is Always Broken…
The sooner you get your head around the fact that there’s a facet of your business that always needs fixing, the better. Even the agencies you reckon totally have their sh*t together are broken. Something isn’t quite ticking over in their processes, their tooling is a mess or their ERP. Therefore, the question you need to ask is “What needs fixing” rather than “When should we fix it?”
This level of prioritization can be overwhelming, especially in the absence of mentorship. Making the transition from a three-person operation to double digits is always tricky, especially if you don’t have someone as a sounding board to dispense advice and keep you motivated. Hence the birth of Agency Local.
“Having somebody to talk to about your business with is vital. Now, that could be a coach or someone that’s running a similar business to you… Just by expressing yourself to somebody and explaining your problem is a realization in itself, but then you have the added bonus of having someone say they’re experiencing the same problem, letting you know you’re not alone!”
As if sharing your problem isn’t therapeutic enough, you’re also opening yourself up to people who have already experienced said problem and have a range of viable solutions. This changes the entire dynamic of what you’re trying to do. Agency Local has been devised with this in mind; to provide a safe space where fellow entrepreneurs can talk openly about their businesses.
Keys to Making a Successful Transition to Business Leader
We all have imposter syndrome to some extent. Despite having built a business around your ability to design and employ several people, the ruminations start, most notably “but I’m a designer, not an entrepreneur!”
Then you get around some other people that are a few steps ahead of you and you realize they’re all struggling with the same stuff you are. It gives you permission to believe in your capability to get through issues without being perfect. Have the confidence to fail. Everybody fails at something, everybody gets things wrong, but learn from it.
Chris and his team know the indicators signifying you’re on the cusp of transitioning from being an expert to a bona fide business leader. Therefore, I ask him about the key area that requires rectifying in order for a freelancer-turned-entrepreneur to successfully scale past that eight-to-10 people ceiling.
“You have to let things go. Trust other people within your business to actually deliver what you have been doing up until now. You need to recognize the scale at which you can no longer do everything – especially if the ambition is to move towards selling the business at some point in the future.”
This is where you need to start looking at capturing processes. This will lead the business to be less reliant on individuals and more on a business blueprint.
You should learn to run your business as soon as possible. Secondly, always run your agency as if you’re going to sell it tomorrow. Thirdly, get a coach – that person who’s been there and done that. Their invaluable input can provide you with shortcuts to solutions to optimize your fledgling business.
So, by way of a recap…
1. Adopt a mindset of continual learning
2. Get used to delegating and outsourcing
3. Work ‘on’ the business not ‘in’ it
Want to see more from Chris?
- Chris’s LinkedIn @chrisbantock
- Agency Local Instagram @AgencyLocal
- Agency Local Twitter @AgencyLocal1
Did you learn anything new from this episode? Let us know in the comments below! We have helpful blogs designed to bolster your agency profitability, such as How To Calculate Your Billable Employee Cost-Per-Hour.
Our next installment of #APP, on December 29th, will see us chat with Marquis Murray. Our previous blog with Vito Peleg is here…
Agency Profitability Tool Kit
If you’re looking for more resources to help you improve your agency’s profitability, check out the Agency Profitability Tool Kit. It’s full of templates and checklists used when consulting clients. This helps them improve profitability by over 100% in under 60 days.