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If you’re running an agency, growth is the goal, right? Every agency owner wants to work with the biggest clients, build the biggest team, win the biggest awards and score the biggest buyout deals.
Unfortunately, the path to sustainable growth is lined with potential pitfalls that threaten not just your ability to scale, but your agency’s entire operation as well. And while there’s no way to fully eliminate them, I’ve pulled together four common challenges, based on my experience growing my own agency and the experiences of other agency owners I’ve worked with, to help you scale as smoothly and successfully as possible.
Pitfall No. 1: You Scale Beyond Your Skills
The natural progression of scaling goes like this: As you successfully complete projects, your clients refer you to others. These new clients refer you to others, and the whole process snowballs until, theoretically, you’re working with the top names in your vertical.
As these referrals continue to build, your agency will likely receive inquiries asking you to bid for or perform projects that go beyond your core set of skills. While these requests can be great opportunities for growth, they can also set your agency up for failure if you aren’t able to deliver strong results.
This isn’t to say that you shouldn’t ever expand beyond your core competencies. But you need to be careful. When things are going well and your agency appears to be in demand, it’s easy to get caught up in the lure of the dollar signs attached to these “bigger and better” projects.
Before saying yes, take a close look at what’s needed to execute the project. Do you need to bring on additional talent? Could you partner with another agency that specializes in the new area? It’s far better to turn down an opportunity you aren’t qualified for — no matter how good it sounds — than to take it on and blow up your carefully built brand reputation.
Pitfall No. 2: Your Systems Aren’t Scalable
Scaling services as an agency is hard. Because it requires so much manual effort and expertise, creative work doesn’t scale naturally, but you’ll only be making things harder on yourself if the systems you have in place aren’t scalable.
Take client intake, as an example. Do you currently have a system in place that shifts as much of the onboarding process as possible onto your clients’ plates? Or are you still using a manual process that requires one of your team members to chase down information that’s needed to kick off a new project?
If you want to scale but your systems and processes still require significant amounts of manual effort, you’re always going to struggle. Take the time to get your house in order with more scalable solutions before investing too heavily in growth.
Pitfall No. 3: You Don’t Have A Deep Bench Of Talent
By its very nature, scaling involves taking something small and turning it into something larger. But if you’re only thinking about scaling in terms of your revenue or your company’s operations overall, you might miss another critical element that needs to be grown in a sustainable way: your team.
Most agencies start out small, either with dedicated teams of employees wearing multiple hats or with pools of contractors that can be tapped as needed. Scaling an agency invariably means adding talent. But overlooking the impact of the talent you already have risks leaving your company vulnerable to turnover.
Imagine you have a core team of five employees, all of whom serve multiple roles at your agency. To scale, your team may need to grow to 10 people total. But what happens if, in the process of scaling, you lose a member of your initial team? This loss of institutional knowledge and multirole expertise could cripple your growth plans, no matter how many new hires you bring on.
To prevent this pitfall from affecting your ability to grow and scale, you need to have two things in place:
• Process documentation that’s updated on an ongoing basis so that the loss of an existing team member doesn’t mean losing important operations information.
• A recruitment approach that continually solicits applications for positions you aren’t actively hiring. When turnover occurs — and it will occur — you’ll be better off if you have a file of strong potential candidates already.
Regularly look at your team roster and ask yourself what you’d do if each member resigned tomorrow. Even the best employees won’t stay with you forever. If you don’t have a good answer for each worker, get a plan in place now, while this exercise is still theoretical.
Pitfall No. 4: You Don’t Give Your Past Clients A Graceful Exit
As your agency scales up, it’s likely that your service offerings will change. Your price points will change. The way you build your packages will change to suit the newer, likely larger customers you’re targeting. As a result, there are probably going to be some clients on your roster that are no longer a good fit for your changing agency.
Here’s what you don’t want to do: keep them limping along with your agency because you’re too scared to tell them that your growth means you’re no longer a good fit for their needs.
Instead, develop a plan in advance for transitioning away from poor-fit clients in a graceful way. Regularly monitor your book of business to identify accounts for whom your services are becoming less and less appropriate. Then, at least a month or two in advance of discontinuing the relationship (depending on your contract terms), communicate clearly why a change is occurring, and, if possible, refer them to a better-fit agency for their needs.
Growth might be the holy grail of most agencies, but it can be a double-edged sword. By putting plans in place to avoid the pitfalls described above, you can improve your agency’s ability to scale up without compromising its performance or integrity along the way.
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