All businesses get stuck at some point. But for agencies, it is often at a point where the founder/owner/operator is maxed out. Many agencies start out with the founder involved in all aspects of the business. And when the founder or owner-operator is at 100% capacity, the business stops growing. The trap is set. The business can’t grow because the owner-operator can’t do another thing, and the owner-operator is trapped because they can’t add resources to free them up to grow the business.
Watch below to hear about The Three Magic Secrets to escaping the owner-operator trap and growing your agency business fast.
Hey gang, it’s Tim. Today, I wanted to talk about startup agencies and the owner-operator trap. When you start an agency, you were doing everything, and this happens so much when you are a solo consultant who becomes an agency. You’re doing the sales. You’re doing the client service. You’re doing the strategy. You’re doing the marketing. You’re doing the bookkeeping. You’re doing it all. You are a one person machine.
And then you slowly start to add some staff, so maybe you add an account manager, whatever, but at some point, you hit a revenue plateau. You know, whatever that number is, a million dollars, $5 million, $10 million, that you cannot get past, right? Because you are stuck. You’re personally maxed out and you don’t feel like you have the resources to add the kind of staff that you need.
This is totally a trap, the owner-operator trap, and it’s a cycle, because what happens is you strive, and you … Let’s imagine you’re stuck at a million dollars. You’ll get to $1.1 million in revenue, but you’re so maxed out that something falls off the backend, and you lose $100,000 in revenue, so you’ll end up just staying right there all the time. There are ways out of this trap, and the ways out of this trap are pretty simple, and these are the three secrets to running an agency.
Number one, you have got to have your ideal client, number two, you’ve got to have scalable lead generation, and number three, you’ve got to have the right offer for that ideal client, and the right offer would be the right service, the right pricing model, whatever. So, we’re going to talk a lot about these over the coming days, but the way you get out of the owner-operator trap is by focus, ideal client, scalable lead generation.
Now, the owner-operator trap is very, very closely tied to, “We are an agency that only works on referrals.” Now, the issue with referrals is that they do not scale. You cannot say, “I need to make more money, therefore I’m going to get more referrals,” because it doesn’t work that way. Referrals are something that come to you because of what you have done in the past, and the quality of person you are, and the quality of service you give, and how well you’ve treated those people in your referral network. You can’t suddenly amp that up today and get new leads today.
Consequently, you need to create a system of scalable lead generation, and to be honest, guys, it’s all about having money to spend to do that. You don’t have to spend a lot of money, but you do need to spend some money, because that’s a level you can pull to scale. If you’re able to scale that lead generation, you are going to end up with the opportunity to talk to more clients, and once you talk to those targeted, ideal clients that you’re building, you are going to be able to then go to someone and hire them, with the assurance that that additional revenue is coming in.
Now, that is a huge, enormous personal stress right there, because you are stretching to land new business that you’re not sure you can satisfy and you’re trying to satisfy your existing business, right? So at that point, you are going to be stretched extra thin. But guess what, you can do it. You’re smart. You know how to do this.
Now, let’s just flip this on its head for a second. If you were talking to one of your clients, who said, “I’m stuck at this particular revenue point,” you’d probably be full of 1,000 different advertising, marketing, SEO ideas that they could do in order to ramp up their business. You, as a marketing agency, have got to eat your own dog food, right? You have got to say, “Oh, if marketing’s good for my clients, it’s good for me.” It’s sort of a … It’s a real disconnect, if you are a marketing agency that exists only on the back of referrals, because referrals, since they’re not scalable, will keep you trapped in that owner-operator trap where you get stuck at a personally maxed out revenue number that you cannot escape.
So, you have got to invest in what you know how to do. If you know how to generate traffic, and leads, and business for your clients, you know how to do that for yourself. Invest in that, even if it means that you need to pull back on a couple of expenses personally, so you can take a little bit less money, so you have another $500 or $1,000 to put into lead gen this particular month, but it is from these particular pieces, the ideal clients, scalable lead gen, and right pricing for right client/great offer, when you put all of those three things together, there is no owner-operator trap, there is no revenue ceiling, because you will not get maxed out, because you will have a constant flow of business, so that you can continue to add staff as you need to scale the business.
This is hard. It is scary. But you can do this. Remember, the three secrets, ideal client, and we’ll keep on talking about this forever, scalable lead generation, we’re also going to keep on talking about this forever, then right offer, right client. That’s it. That’s how you get out of the owner-operator trap.
Thanks, and we’ll talk soon. Have a great day.