9 Questions You Should Answer Before Growing Your Agency

Last updated on by Ted Vrountas in Marketing Agency Tips

It’s “something to be afraid of,” says digital marketing expert Neil Patel — something that can “slay a business faster than nearly anything else.”

What’s the “it” he’s referring to? Premature scaling.

It’s true, growing too much too soon can ultimately doom your marketing agency. Before you put a down payment on that fancy new office complete with bean bag chairs and a ping pong table, ask yourself these questions to see if you’re ready for the next step.
Growing too much too soon can ultimately doom your marketing agency. Ask these questions first.

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1. Do I have a replicable customer acquisition process?

If you’re in a position to be asking yourself the following questions, you’ve obviously generated enough work to keep you busy — which is great. In fact, it’s so great that it warrants a brief moment of reflection.

Remember your first client? Remember how scary starting your agency was? You’ve come a long way since then and you deserve some congratulations. Go, you. Not everybody makes it this far.

Okay, back to reality.

Right now you have enough work to keep you busy, but to continually grow your agency, you need to be able to generate more. You don’t want to spend money on a new office and some star employees only to break even — or worse, plummet toward the red.

How have you attracted clients so far? What are your most successful acquisition channels? What others can you use to bring in more business?

Before you grow your agency, make sure you have replicable protocols in place for bringing in more customers.
2. Have you optimized your current pricing structure?

How does your agency price its services? Do you charge by the hour? By the project?

According to a report from HubSpot, nearly 60% of agencies offer monthly retainer-based pricing — which, from a growth perspective, makes a lot of sense.

Consider this scenario: You charge by the hour, and your client has contracted you for up to 30 hours of work per week. That’s the maximum amount of production they can expect from your agency.

On the flipside, there’s no minimum amount of work they’re required to give you. If you charge by the hour or by the project, you risk sacrificing dependable revenue. There’s no guarantee you’ll have enough work to pay your bills or enough projects to grow your agency’s bankroll.

If you offer a monthly retainer, however, your client pays the same fee every 30 days that was agreed upon in your contract. In exchange, you provide a set amount of services.

For example, you might charge a $5,000 “gold” retainer that guarantees your clients 15 blog posts, 50 social media updates, and 1 white paper per month.

The guarantee goes both ways, though. Once you and your client agree to a retainer, you won’t have to worry about unstable revenue sources every month.

Now, of course, your pricing structure will vary depending on the work you do. If you’re an agency that specializes in one-off jobs like building websites or generating market reports, project-based, and hourly pricing might make more sense. But for those who do ongoing work, a retainer is the safest, most stable form of pricing.
3. If I go on a vacation, will the whole agency fall apart?

“Some advice” read the subject line of an email received by Jim Moffatt in the middle of a 10-day vacation years ago. It was a business partner he respected greatly, and its contents changed the way he managed Deloitte Consulting LLP as chairman and CEO.

At the time, Jim had some trouble leaving work at work, even on vacation in Scotland. But, you would too if the team you managed serviced 70% of the Fortune 500. Still, Jim’s partner encouraged him to unplug for one primary reason:

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