The 6 Most Common Things That Kill an Agency
When it comes to running your own company, mistakes are inevitable. However, one mistake too many at the wrong time could threaten to put your agency out of business. You can better prepare your agency for challenges and set up ways to overcome them if you are aware of common pitfalls that agencies like yours […] The post The 6 Most Common Things That Kill an Agency appeared first on BenchmarkONE.
When it comes to running your own company, mistakes are inevitable. However, one mistake too many at the wrong time could threaten to put your agency out of business.
You can better prepare your agency for challenges and set up ways to overcome them if you are aware of common pitfalls that agencies like yours face. Read on to learn about six things you should avoid at all costs.
1. Absence of Retainers/Productized Packages
Revenue is important to your agency’s success, but not all revenue is created equal: some dollars are a lot harder to bring in than others.
One-off projects will have you constantly pitching for new work and new clients to keep generating revenue, which can lead to burnout. If this becomes a norm, it leaves you vulnerable to financial problems that could eventually kill your business.
Retainers and productized packages, on the other hand, will provide your agency with more predictable earnings. It also makes it much easier to allocate time to different tasks when you already know the jobs ahead of you.
2. Absence of Structured Business Operations and Tools
Running a business involves annual and quarterly planning, assigning roles and responsibilities, maintaining good internal communication, and many more aspects. Whether you are a veteran agency or just starting, you need to manage operations efficiently with appropriate tools for business success. Failing to do so could mean that important things slip through the net.
A CRM tool can help with managing clients and client relationships and automating repetitive marketing tasks, whilst an email marketing tool helps you with connecting with clients and provide updates. You should also consider a project management tool for managing clients’ projects as well as internal projects.
3. Little to No Marketing
Marketing is the lifeblood of any business, and your agency is no exception. Marketing your agency helps you remain visible and relevant, builds your reputation, creates demand for your services, and helps you overcome objections from prospects.
However, some agencies slow down on marketing activities because their clients’ needs take precedence. The reality is that putting a halt on marketing your agency is a big failure that can result in less business and exposure.
So, make marketing your agency a priority. It is important to always have a pipeline of leads and potential clients to which you can always pitch your services when needed. Also, more business means more revenue, which can aid your agency’s growth and help you scale up more quickly.
4. Focusing On One Big Client
Anchor clients are great, but depending on just a few major clients for the bulk of your agency’s revenue is a disaster waiting to happen. What if something happens and a major client has to suspend business with you? Not having that monthly recurring revenue could put your agency in the ground.
Make sure you have a solid book of business, ranging from clients with large budgets to more conservative ones. And make sure you have enough clients to keep your revenue strong but not too many so that your work suffers due to lack of resources.
If your agency has less than ten clients, it could be a huge financial knock if one or two decide to take their business elsewhere. More than 25, and you’ll have multiple people demanding your attention, stretching you thin. So it’s important to strike the right balance here.
And remember, continuous marketing will help you get more leads to pitch your services to, and you can always sign on new clients when the need arises.
5. Lack of Preparation for Business Crunch
Agencies will sometimes have multiple projects that all come to fruition at the same time, leaving the business with more revenue than average. When this happens, most agencies regard it as their lucky period and fail to prepare for the cash crunch periods that may lie ahead.
Business won’t be fast-paced all of the time – clients can go on vacations, take leave, or have emergencies that may stop them from doing business during certain periods. However, your business operations won’t stop – team members, contractors, and vendors need to be paid.
Use the cash flow from the good times to prepare a reserve for unavoidable cash crunches to avoid being forced out of business.
6. Misalignment of the Sales and Marketing Team
Most agencies use the silo system, which is a good way to lose potential customers for your agency. In the silo system, the marketing team does the hard work of bringing in leads and hands them off to the sales team for closing. The separate system may present misalignment in lead acquisition and management.
When your marketing and sales teams work together, both teams have input to develop effective strategies, and business goals and objectives are unified, transparent, and shared by both teams. It’s not always easy to align these teams, so make sure you hold regular meetings and use tools, like a CRM and marketing automation, that will give them access to the same information and processes.
Running an agency is stressful and time-consuming, but it’s also fulfilling and exciting. Make sure you follow the six tips above to ensure your agency sticks around for the long haul so you can continue to offer your amazing services to your clients (and future clients).
The post The 6 Most Common Things That Kill an Agency appeared first on BenchmarkONE.