I was at a video seminar last week (one of the brilliant sessions from the lovely team at Agency Hackers) where someone mentioned it's hard to break through the £1m barrier and make it stick.
This has become accepted agency wisdom, and whenever it's brought up, everyone nods their head in recognition.
Some agency owners get their business a bit beyond £1m but then find things slip backwards — with projects going wrong, clients leaving or staff turnover spiking — so they slide back down. Others find they're always hovering just below, unable to take the next leap.
I explained that the key to unlocking this problem is changing the perspective. The fact it happens at around £1m is pure coincidence. The problem has nothing to do with money. As with everything to do with agencies, it's all connected with people.
Agencies have key points of transformation in their lifecycle. When they reach these points they have to make big changes or they'll hit problems and fall back.
The first of these is when you pass around 10 or so staff. At that point your role as the founder needs to change, your leadership style needs to evolve, and you need to start having different (or some!) processes in the agency.
But most agencies reaching this point are just too busy doing the doing — especially in times like these — to lift their heads and think about these things. They don't have a forum for these conversations, such as a board, to take a wider perspective and challenge them to work on the business rather than just in it. They charge on through, and hit problems. It doesn't have to be that way.
Coincidentally, somewhere around 10 staff members generally coincides with £1m in fee income. That's why people think it's about the money.
The next transformation points are at around 30 people and around 75 people.
Which transformation point are you be headed for next? How will you make the time to lift your head and plan the change in the agency so you can bust on through it rather than hit a brick wall?
Bring us in to facilitate your agency owners retreat (if if you're a sole owner!), and we'll give you an energising insightful day that sets your agency up for a great year.
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