Scaling 7, 8, and 9-Figure Agencies

Advocation has worked with countless agency leaders, giving them the tools to increase profits while decreasing stress. Our process typically starts with a thorough audit of agency practices, which allows us to examine how many firms operate.

From this experience, we’ve identified a handful of similarities among thriving 7, 8, and even 9-figure agencies and the way they run their businesses.

While every agency will have nuances within these best practices, there are four commonalities between the most successful firms we see.

They run their agency based on data and monitor the metrics that matter most for organizational stability.

Understanding the metrics that are most important to the agency's long-term success and making decisions based on these metrics ensures stability and strategic growth.

The most important metrics within an agency are time allocation, capacity planning, and overhead costs.

1. A team’s time is an agency’s most important resource. Successful firms have a clear picture of where everyone is spending time so that they can make adjustments to meet the needs of clients and the business. The key to success that many owners and leaders miss is providing clarity and transparency across the organization on how time should be spent, including priorities and utilization targets (more on that below!). When leaders are transparent and clear with employees, they empower everyone to be an asset in managing time and proactively flagging where adjustments need to be made.
   
   
2. An agency's capacity equates to the hours available for client work. This essentially involves taking inventory of everyone’s time and understanding how much time they're currently spending on billable and non-billable work (utilization rate). When capacity isn’t tracked, it’s common for employees to become overworked and overstressed, which ultimately results in either low-quality work or low team morale, both of which ultimately affect the bottom line.
   
   The most successful agencies track capacity so they can ensure that they are not assigning work to team members who have zero capacity. On the flip side, they're not hiring new employees when their current team isn't fully utilized. Having this knowledge allows firm leaders to know exactly when to bring in additional team members or contractor support. 
   
   We specialize in training teams to use Teamwork, the only tool optimized specifically for capacity planning within agency models. We discuss this in great detail here.
   
   
3. When thinking about overhead, we typically divide it into fixed costs and investments. Fixed costs are what most people think about when referring to overhead, and they include items like office rent, email hosting, etc. Investments may include team training or new software programs. A clear understanding of where the agency is spending money on overhead ensures that leaders know what it costs to run the business and how overhead is either contributing to or taking away from profits. 

They prioritize culture. 

The most successful agencies recognize that good morale is good for business. Unhappy employees result in high turnover rates, which affect not only client relationships but also the bottom line since training new talent is expensive.

Top-performing agencies are prioritizing culture by giving team members what they need professionally, personally, and psychologically. When leaders are auditing their agency culture, there are a few questions to ask.

1. Professionally: Are employees advancing their careers in a way that is meaningful to them and beneficial to the business? 
2. Personally: Is the agency empowering and helping team members meet personal goals? Do they have the ability to take care of personal priorities outside of work?
3. Psychologically: Are we all working in a way that fosters mental well-being?

They have a system for auditing the agency’s current practices, services, and clients each year.

It sounds cliche, but the most successful leaders embrace change as a constant. When considering an agency's services, it’s important to remember that winning services sell and are profitable. Losing services aren't typically neither easy to sell or easy to profit from.

Regular service changes are key to agency growth. They might be needed to meet new industry demands, increase the agency's competitiveness, or allow growth into a new vertical. 

They treat their networks like a client.

There is a saying inside agencies that you should “treat your firm like a client,” which typically means prioritizing new business development and marketing efforts. In our experience, the firms that are most successful in this regard treat their networks like clients, which means they prioritize relationships.

Time is valuable, and the most successful leaders mindfully invest in the relationships that matter most. Having the capacity to do this means that systems must be in place for the agency to thrive without the owner being in the trenches of every single client.

A great tip for this is to create what we call an Annual Connection Center. Sit down at the beginning of each year and create a list of:

• Referral partners, both current and potential
• Relationships to rekindle
• People to get to know or meet

Having this defined allows owners to move through networking intentionally and mindfully. 

Running a 7, 8, or even 9-figure agency doesn’t happen by accident. These intentional strategies will help agency owners propel their businesses forward and reach new levels of success. 

If you’d like to learn more from the Advocation team on best practices for PR & marketing agency teams, follow us on social media–Instagram, LinkedIn, and YouTube.