By Drew McLellan
All agency owners have one thing in common: the desire to create a company that does it better and does it their way. But you can’t realize your vision if your agency isn’t financially successful.
It’s simple: Your agency must bring in revenue, and your team must be rewarded for its hard work. Agency owners still trip up on the same five mistakes over and over, despite having a straightforward goal. These five agency owner mistakes aren’t unique, and fixing them isn’t optional. Get back to your main goal, and get over what’s making your agency more complicated and less successful.
The Big Five
These five mistakes are probably things you already know you need to fix. They’re the things holding your agency back and keeping you from being as efficient and successful as you could be.
1. Your agency doesn’t have a business plan.
Most organizations don’t have one; of those that do, very few actually use them. But without one, how do you recognize areas that need improvement?
Your plan needn’t be a 20-page monstrosity that sits on your bookshelf collecting dust. It can be a single piece of paper that identifies your most pressing needs in finances, management, staffing and more.
If you commit to your business plan, you can increase your bottom-line profits significantly. The plan should focus on your vision for your company. What do you want for your future? Take your ideas, make a list, and then make them real.
2. You don’t stick to your processes.
No one violates an agency’s procedures more than the owner. But we both know the problem with that. If you don’t do it, neither will the rest of your team. That’s why every agency should create processes for orientation, employee reviews, production, bonuses and seamless financial systems. Once you create systems, honor them—no matter what.
3. You’re overstaffed and underperforming.
You love the people you work with, right? That’s great—until it causes you to lose money. Some agency owners are slow to let an underperforming employee go.
When you keep someone who isn’t moving the agency forward, you’re putting everyone at the agency at risk for his sake. Remember your first and most important goal: Run the agency so it can survive. Trim overhead expenses instead of holding on to dead weight.
Here’s a ratio for staying on the right side of the red line: For every $100,000 to $150,000 in adjusted gross income (that’s gross billings, excluding your costs), you should have one full-time equivalent. If you keep an eye on this ratio, you’ll have a good sense of when you’re overstaffed. Then, you’ll know when it’s time to cut back.