How to Scale an Agency to a Founder Exit: The SimplyBe. Success Story

Jan 23, 2024

In the competitive world of marketing agencies, founders often dream of how to scale their agency so they can step back or exit entirely, having transformed their firm into a valuable asset. 

This dream can take various forms: exiting day-to-day client work to focus on sales and marketing, leaving to pursue other ventures, or selling the agency entirely. 

Our firm specializes in making these dreams a reality. This blog reveals a case study of our long-term client, SimplyBe., illustrating a few of the most critical success factors for scaling and preparing for a sale within 18 months.

About SimplyBe.

Founded in 2017, SimplyBe. quickly became a leading agency in personal branding and executive thought leadership, gaining international recognition and expanding its team to 20 full-time employees and several contractors. 

Founder, Jessica Zweig, an authority in personal branding, wrote a seminal book on the topic, which catapulted her firm to number one in its space upon release. 

We began partnering with SimplyBe. in July 2022, and through our work to streamline operations, together we achieved accomplishments like: 

  • Exiting the founder from day-to-day operations of the business within 45 days
  • Seeing SimplyBe. listed in Inc. 5000's 2023 fastest-growing companies
  • Doubling delivery margins on client work 
  • Streamlining and standardizing core business functions that culminated in the successful sale of the agency in January 2024

The Roadmap: How to Scale an Agency

Our approach to scaling agencies like SimplyBe. begins with a thorough audit using our proprietary Agency to Asset™ framework. 

We take twelve weeks to intimately review four core pillars that yield a flywheel of unstoppable success and unshakeable stability:

  1. Client Management 
  2. Financial Management
  3. Work Management
  4. Team Management

Through this process, we create a roadmap to stabilize the firm, standardize operations, and streamline day-to-day activities. 

Here’s how we applied this roadmap to SimplyBe.

Solidifying the Management Team

A critical step to scale an agency beyond five to ten team members is establishing a management team. 

In addition to finding the right people, a firm needs a cohesive leadership structure that’s appropriate for its size, stage of business, and growth goals. 

Often, agencies (and many businesses) make the mistake of relying on a single 'unicorn' employee to carry the torch from its founder. 

This is a risky strategy that often backfires. Not only does it create a dependency that can collapse if that employee leaves or becomes unavailable, but it also drastically limits how far an agency can scale. 

Instead, we recommend placing skilled leaders in charge of each core business function: 

  • Sales 
  • Marketing
  • Operations (Finance, HR, etc.)
  • Client Delivery 

How did this apply to SimplyBe.?

In our audit process, we identified gaps in the structure of its leadership team, namely, in which department owned the daily management of client budgets. 

This was one of the first and most meaningful operational changes we made. We began by adjusting roles and responsibilities and identifying which department within the agency should own daily budget management. Paired with simple processes that provided executive leadership with visibility into budgets and client successes, we cut the overservicing of retainer accounts from an average of 40% to nearly zero. 

How can this be applied to other firms?

As agencies grow, they typically need an established leader within client delivery first and foremost, and they’ll need many client delivery leaders as the firm continues to scale.

Here are a few best practices and guidelines for establishing a leadership structure of varying sizes. Below, we’re focused on agencies under $10 million in annual revenue. Beyond this, firms vary greatly and need a far more custom path. Get in touch with our team, if that’s the case!

While many variations exist on how to scale an agency, these are the most common paths we see.

  • Under $1 million per year in annual revenue
    • The leadership structure includes one core leader in the client delivery space (often a director or senior manager) with direct reports 
    • The founder focuses on minimizing their involvement in day-to-day execution while holding on to oversight of sales, marketing, and operations 
    • The biggest hurdle? Standardizing client delivery enough so that it can be delegated to another leader.
  • $1 million to $5 million in annual revenue 
    • Agencies typically begin to structure client delivery into “departments” at this size. 
    • The founder is typically beginning to find agency leadership to own other core business functions across sales, marketing, or operations–usually one to start. Often, they’re moving from fragmented part-time experts and contractors to hiring at least one full-time employee to own one other core area of the business. 
    • The biggest hurdle? Identifying the proper structure for delineating departments holds most agencies back at this stage. This delineation can happen in many ways but is usually most successful when departments mirror the execution of client work.
  • $5 million to $10 million in annual revenue
    • At this size, agencies are solidifying their leadership team across each core business function mentioned above–sales, marketing, and operations. 
    • They’ll also have many client delivery leaders and are typically very focused on building their second wave of leadership under these folks. The reason? So the most senior people have solid righthand talent, and they can focus on agency growth and optimization.
    • The biggest hurdle? Collaboration between departments tends to be a significant bottleneck on the path to scaling beyond this size. Ensure leaders aren’t creating processes in a vacuum.  

Structuring Services for Profit to Scale

One of the most common roadblocks to scaling is insufficient delivery margins on client work. When conducting an Agency to Asset™ Audit, we often uncover that delivery margins are half of what they should be. 

What exactly is a delivery margin? A firm’s delivery margin is essentially how much revenue is left after paying for team members to execute the work. 

Labor is every agency’s biggest expense, and when delivery margins aren’t tightly managed, it yields a host of problems, including:

  • Not being able to hire quality talent
  • Non-existent profit margins, and sometimes, even putting agencies in the red 
  • Putting capacity strains on the team because there isn’t enough budget to do the work
  • …and a whole lot more 

How did we improve delivery margins for SimplyBe.?

First, we identified where the team was overspending on time. After analyzing time tracking and execution processes, it became clear that monthly and quarterly reporting was the number one culprit for leaking profits.

We partnered with an internal stakeholder, collaborating to create a revised reporting process and providing oversight and counsel as they rolled it out to the team. This is an incredibly powerful way for us to work with our clients, offering internal ownership, smooth integration, and professional development opportunities. 

Together, we established a process that reduced the time spent on reporting by more than 85% while also contributing to client retention with an average 15% annual upsell rate. 

Next, we partnered with the sales department to establish a new way of scoping incoming projects. Our priority was to bake in sufficient delivery margins on every project. 

Our team:

  • Analyzed the hard costs of every service offering, ensuring each scope included these line items 
  • Created a system for adequately marking up the cost of staff, leadership oversight, contractors, and vendors 
  • Integrated appropriate resources for administrative time across projects, such as reporting, communications, and project management  
  • Partnered with the internal leadership team to establish standardized scopes for each flagship service offering as well as a suite of add-ons to drive upsells 

All in all, we doubled delivery margins through the above work in less than six months.

What’s the right delivery margin for an agency?
Unfortunately, there isn’t a hard and fast guideline for delivery margins because there are so many variations across business models. Delivery margins depend on many factors, like:

  • The seniority of staff (and therefore cost) required to execute the work
  • The cost of client acquisition
  • The average length of client partnerships
  • The average lifetime value of client contracts
  • The number and cost of tools required to do the work 

If interested in learning more about delivery margins, inquire about booking an Agency to Asset™ Audit with our team. 

In Conclusion

Scaling an agency for a founder exit is a multifaceted process that requires a strategic approach. By following the roadmap we applied with SimplyBe., founders can transform their businesses into valuable assets, ready for a successful exit. Remember, scaling an agency is not just about growth; it's about building a sustainable, efficient, and profitable model that can thrive independently of its founder. This journey, while challenging, can be incredibly rewarding, leading to new opportunities and the realization of long-held entrepreneurial dreams.

Interested in our support to get there? Book a consultation here.


For those seeking additional resources on how to scale an agency, check out the below:

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