This article was written by my business partner Antonio

When we first started our agency, NOVOS, cybersecurity wasn’t at the top of our list of priorities. Sure, I knew the basics—strong passwords, firewalls, antivirus software—but like many agency owners, I thought that the real risks were far away or that a small business like mine was too insignificant to be targeted. Then, one fateful day, it happened to us.

The entire team was scrambling, clients were anxious, and we faced a PR nightmare. In the end, we were lucky—we didn’t need to pay anything and it was resolved quickly. 

That experience changed everything for me. I realised just how vulnerable even small businesses are in the face of increasingly sophisticated cyber threats. The world is changing fast, and cybercriminals are becoming smarter by the day. If you’re running an agency—especially one that handles sensitive client data, digital assets, or marketing campaigns—you need to make cybersecurity a core part of your strategy.

We then went hard on protecting ourselves & here’s why you should too. Here are the steps that can help you boost your agency’s cybersecurity defences based on what I learned the hard way.

1. Implement Multi-Factor Authentication (MFA)

Why it’s critical: One of the easiest ways for cybercriminals to breach your system is through weak or stolen passwords. The first step toward better security is requiring multi-factor authentication (MFA) for all systems that support it. This adds an extra layer of protection by requiring users to verify their identity through more than just a password—often a code sent to their phone or an authentication app.

After our attack, we rolled out MFA for everything—from email accounts to cloud storage. This simple step significantly increases security without requiring a huge investment.

MFA won’t stop every type of attack, but it makes it much harder for hackers to gain access to your systems if they do get hold of a password.

2. Educate Your Team (Cybersecurity is Everyone’s Responsibility)

Why it’s critical: Human error is one of the leading causes of cybersecurity breaches. Phishing emails, in which attackers impersonate legitimate organisations to steal login credentials or install malware, are particularly common. In our case, one of our employees clicked on a phishing link in an email, unknowingly allowing the attackers access to our network.

The lesson here? You can have all the technical defences in place, but if your team isn’t trained to recognize cyber threats, you’re still at risk.

Make cybersecurity training a regular part of your onboarding process and offer refreshers throughout the year. Teach your employees how to recognise phishing attempts, use strong passwords, and report suspicious activity. Regular, short training sessions are often more effective than long, overwhelming one-time seminars.

3. Regularly Update Your Software and Systems

Why it’s critical: Outdated software is one of the most common entry points for cybercriminals. Software providers often release updates that patch security vulnerabilities, but if those updates aren’t applied in time, they leave your agency exposed.

I learned this the hard way after one of our systems was compromised through an unpatched vulnerability in outdated software. It didn’t matter that we had firewalls or antivirus software in place—what mattered was that we were behind in patching our systems.

Set up automatic updates whenever possible across ALL company devices, or assign someone on your team to check for updates regularly. This applies not just to your operating systems but also to all the apps, plugins, and tools your agency uses. Don’t forget about your devices, including smartphones and tablets, which are often overlooked.

4. Backup Everything, and Backup Often

Why it’s critical: When we were hit by a Cyber Attack, it was the fact that many of our critical files weren’t properly backed up that caused the biggest long-lasting issue. That left us scrambling to restore work and recover client data, all while managing the panic of the team and clients.

A strong backup system is your safety net in the event of an attack or system failure. Regular, encrypted backups—stored both onsite and offsite (such as in the cloud)—can help your agency recover quickly if disaster strikes.

In our case, we quickly set up a more robust backup system with automated daily backups to both the cloud and external hard drives. Test your backup systems regularly to ensure they’re working and that you can restore data when needed.

5. Secure Your Network with a Strong Firewall

Why it’s critical: Firewalls are a first line of defence against external threats, but not all firewalls are created equal. Your agency needs a robust, enterprise-level firewall to prevent unauthorized access to your network, especially if you have remote workers or offices in multiple locations.

During the attack on our agency, we realized our firewall was outdated and not properly configured. Since then, we invested in a next-gen firewall that not only blocks malicious traffic but also offers intrusion detection, content filtering, and VPN capabilities for secure remote access.

You’ll also want to monitor your firewall regularly for suspicious activity. Most firewalls offer real-time alerts when something’s amiss, so set them up and make sure someone on your team is responsible for reviewing them.

6. Use Encryption for Sensitive Data

Why it’s critical: Encryption is the process of converting data into a code to prevent unauthorized access. If cybercriminals gain access to your agency’s systems, encrypted data is much harder to exploit. Encryption should be standard practice for any sensitive data, whether it’s client files, email communications, or payment information.

Encrypt data both at rest (stored data) and in transit (data being transferred over the network). Many modern systems offer built-in encryption but make sure your team follows the best practices for encryption and key management.

7. Monitor Network Traffic and Set Up Alerts

Why it’s critical: Modern cybersecurity tools provide advanced network monitoring that can detect suspicious traffic patterns and unauthorized access attempts. By setting up alerts for any anomalies (like large data transfers or unauthorized login attempts), you can catch cybercriminals before they can do significant damage.

Consider using intrusion detection and prevention systems (IDPS) to monitor your network 24/7, especially if your agency stores sensitive data or handles high-value projects for clients.

8. Develop an Incident Response Plan (And Test It)

Why it’s critical: One of the biggest mistakes I made in the aftermath of our cyber attack was not having a clear, tested incident response plan in place. We were in damage control mode, and it took far too long to coordinate a response.

You need a well-documented incident response plan that outlines what to do in the event of a cyber attack. This should include steps for containing the breach, notifying clients, contacting law enforcement, and recovering from the attack.

Make sure to assign roles to specific team members and practice responding to a hypothetical cyber event, so everyone knows their role when the real thing happens. Speed and coordination are crucial.

9. Work with a Cybersecurity Expert or Managed Service Provider (MSP)

Why it’s critical: When our agency was compromised, we learned that we were in over our heads. It was clear that we didn’t have the resources or expertise to handle a large-scale cyber attack. That’s when we decided to bring in an external cybersecurity firm to help us recover and shore up our defenses, and they now still work with us ongoing.

Cybersecurity is complex and constantly evolving. If you don’t have the in-house expertise to manage your agency’s security, consider partnering with a managed service provider (MSP) or hiring a cybersecurity expert. They can help you assess risks, implement best practices, and respond to incidents quickly.

Final Thoughts: Don’t Wait for an Attack to Happen

Cybersecurity isn’t a luxury—it’s a necessity. As I learned the hard way, the consequences of a cyber attack can be devastating to your agency’s operations, reputation, and bottom line. Don’t wait for the worst-case scenario to strike before you start taking cybersecurity seriously.

Invest in the right tools, educate your team, and be proactive about your agency’s security. The peace of mind that comes with knowing your business is protected is worth every penny.

This post was written by my business partner Antonio

When we were setting up our agency, NOVOS, we were knee-deep in business plans and financial goals. The exciting part of setting up your agency is thinking about the future. However, one not-so-exciting aspect that’s equally as important but often overlooked is insurance. 

Now, I know you’re probably groaning at this and may have even chosen to skim-read this article because the word “I” makes you cringe with boredom. However, we’ve scaled an agency from nothing to a multi-million-pound exit, and we know the insurance you need as an agency to cover yourselves in the event of an unexpected happening.

For a UK-based agency:

Employers Liability Insurance

Firstly, if you plan to employ anyone and even if it’s temporary, you MUST have this insurance. Not only for a claim, but it’s also a legal requirement and can result in you being fined heavily by HMRC. 

Employers Liability is to protect your employees in the event they get sick or injured as a result of their workplace. No matter what kind of business you are or what you do, workplace injuries can happen as well as occupational diseases, so you need to have this insurance in place ASAP.

Professional Indemnity Insurance

So this one’s not a legal requirement, but we recommend you have it in place as an agency. This one essentially protects your agency against any claims made by clients if they lose money because they followed any recommendations you provided or due to negligent services you offered. In the service business, things can go wrong and the wrong advice can happen, so it’s good to have this in place whether or not this happens because a client might also try it on one day if they see a dip in performance, even if it’s unrelated to you. I mention this, because we’ve had this happen to us before.

If you don’t have this insurance in place, you risk having to cover all costs, legal fees, expenses, compensation etc from your own pocket.

Public Liability Insurance

This one, and Professional Indemnity, might seem like they overlap somewhat. But both are essential to have in place in our opinion.

This one covers you for any claims made by clients or members of the public against damage or injuries, so repair costs, medical fees, personal compensation & legal costs. For you as an agency owner, this could look like a client who damages their laptop whilst onsite with you, or who injures themselves on your stairs and so on. 

It might not seem crucial, but we think it’s one of those in-expensive essentials that will give you peace of mind at night.

Contents & Business Interruption Insurance

You need to make sure all your business equipment is covered with a solid contents insurance. This includes either office-based policies (covering any equipment left at an office location) or remote-based policies (covering business equipment that is not based at a single office). When the Covid pandemic first hit, we found it near-impossible to find an insurance policy that covered our teams’ devices at their homes and we were told to “rely on their own personal contents insurances” which didn’t fill me with much confidence. 

However, we have since been able to get comprehensive contents insurance that covers any business device that gets stolen or damaged anywhere in the world. We’ve had laptops burned in fires & employees’ houses burgled, so I’d say it’s essential you have this in place especially if you’re going to work from expensive equipment.

Further to this is Business Interruption insurance, where if anything were to happen in your business day that would temporarily stop you from being able to continue running the business, then you can have this cover. This could include any sudden closures of your place of work, food poisoning sickness, and so on. Basically something that could stop you in your tracks unexpectedly.

Cyber Insurance

In the event of a cyber attack, or some kind of computer security issue, you should have cyber insurance in place. I’ve seen far too many agency owners click the wrong link or send money to the wrong place, without having insurance in place.

Having this means that should you become a victim of a cyber attack, you can claim for any losses back which makes dealing with the issue much less panicky.

For a U.S. based agency:

General Liability Insurance

Why it’s critical: General liability insurance is often the first policy an agency should acquire, and for good reason. This policy covers a broad range of risks and protects against claims of bodily injury, property damage, and personal injury that arise from your business operations.

Imagine this scenario: A client visits your office and trips on a loose cable, injuring themselves. Or, perhaps, your team accidentally damages a client's property during the execution of a project. Without general liability insurance, you could be on the hook for medical bills, legal fees, and potential settlements—expenses that could easily bankrupt your business.

This coverage is not just a safety net—it’s often a requirement from clients, especially larger ones. They want to know you're covered in case something goes wrong on their watch.

Professional Liability Insurance (Errors & Omissions)

Why it’s critical: In an agency, your value is built on your expertise. Whether you're crafting a brand strategy, designing a website, or managing a marketing campaign, your clients rely on your knowledge to produce the results they expect. However, even the best of us can make mistakes. Professional liability insurance (also known as errors and omissions insurance) protects you from lawsuits claiming negligence, misrepresentation, or errors in the services you've provided.

Let’s say you deliver a marketing campaign for a client, but it underperforms. They may sue you for damages, arguing that your advice or execution led to their losses. Without E&O insurance, you’d be left to defend yourself—potentially in a costly, drawn-out legal battle.

I’ve seen businesses lose everything over a single claim that could have been avoided with the right coverage.

Workers' Compensation Insurance

Why it’s critical: If your agency has employees (or even independent contractors in some cases), workers' compensation insurance is a must. It covers medical expenses and lost wages if an employee gets injured while working. It also protects your agency from potential lawsuits related to workplace injuries.

Even if you're a small operation or primarily remote, this coverage is still important. It may look different depending on your state, but it’s crucial to be compliant and protect both your people and your bottom line.

Cyber Liability Insurance

Why it’s critical: In today's digital world, a data breach or cyberattack is not a matter of "if" but "when." Agencies store sensitive client data, whether it's personal information, financial records, or creative assets. A cyberattack could leave you vulnerable to data theft, ransomware, or costly downtime.

Cyber liability insurance helps cover the costs associated with a data breach or cyber incident, including legal fees, notification costs, and customer compensation. It also helps protect your agency’s reputation, which can take years to rebuild if clients feel their information is compromised.

In my experience, the rise of cyber threats has made this coverage non-negotiable. Clients want to know you're prepared to handle their data securely, and an attack could have a lasting effect on your agency's credibility if you’re not adequately protected.

Commercial Property Insurance

Why it’s critical: Commercial property insurance is another essential if you own or lease office space. It protects your physical assets, including your office building, equipment, furniture, and any inventory or materials used in your agency’s operations.

Even if your agency is fully remote, you might want to consider coverage for office equipment, laptops, and other assets your team uses, especially if employees work from home.

Commercial Auto Insurance

Why it’s critical: Commercial auto insurance is essential if your agency owns or leases vehicles for business purposes. Personal auto policies typically don't cover vehicles used for business, and if your team members drive for work-related tasks (like meetings, deliveries, or errands), you could be personally liable if an accident occurs.

Even if you don't have a fleet of vehicles, remember that if employees drive their personal cars for business purposes (e.g., driving to client meetings), you might still need to consider coverage for them.

Business Interruption Insurance

Why it’s critical: Business interruption insurance covers the loss of income if your agency’s operations are temporarily halted due to unforeseen circumstances, such as a natural disaster, fire, or other disruptive events. This can help cover ongoing expenses like payroll and rent while your business gets back on its feet.

Employment Practices Liability Insurance (EPLI)

Why it’s critical: If you're an employer, you face the risk of claims related to employee treatment, such as wrongful termination, harassment, or discrimination. Even a frivolous lawsuit can drain your resources and tarnish your agency’s reputation.

Employment Practices Liability Insurance (EPLI) protects you from these claims, covering legal fees, settlements, and judgments. As an agency with employees, I’ve seen how complex employment issues can become, and having this coverage provided peace of mind.

When you run an agency, you’re juggling many moving parts. While you’re focused on serving your clients, growing your team, and managing operations, it’s easy to overlook the insurance that can keep your business safe, and we’ve definitely done this ourselves.

But believe me, when something goes wrong—and it inevitably will—having the right insurance policies in place will allow you to recover faster and keep your agency afloat. Whether you’re just starting out or scaling to new heights, protect your business, team, and clients by prioritising insurance. It’s one of the smartest moves I made as an agency founder.

If you explained to your staff that you had imposter syndrome as an agency founder, they’d think you were mad. It’s more common than you think, particularly when you get to the top. If you were applying for your role as if it were a normal job, I doubt you’d even give yourself the role compared to other agency CEOs who have years and years of experience.

In this podcast, my business partner and I explain our experiences with imposter syndrome while running NOVOS. Surprisingly, our most significant experiences came at very different stages of the agency.

I hope you enjoy listening; the full transcript is below if you’d prefer to read it.

Subscribe to the podcast via this linktree link: https://linktr.ee/theagencyfounders 

Sam Hurley: Hello, welcome to another episode of the Agency Founders Podcast with me, Sam Hurley, and Antonio Wedral. Today, we're talking about imposter syndrome. This wasn't going to be my first question, but after mentioning this to a member of our team, it was his first question. So I will ask you, is imposter syndrome a thing?

Is it real?

Antonio Wedral: Imposter syndrome, I believe, is real. The feeling is undoubtedly genuine, though whether the natural phenomenon is different. It's a complex answer, but essentially, people often feel they're in a position they shouldn't be, for various reasons.

This feeling's validity depends on the situation. For instance, if I were suddenly sworn in as President of the United States, it would be [00:01:00] fairly accurate to think, "Yes, this feeling is real because I shouldn't be in this position." It's about distinguishing between the feeling and the factual reality. When it comes to someone of a certain age managing a few people, that's more debatable.

People might feel they don't belong in a role, but if they have the necessary background and experience, they may be ideally suited for it. If that makes sense, that's how I'd answer that question.

Sam Hurley: Yeah, I think it's a natural phenomenon, but I believe it's been exaggerated and labelled as something more significant than it is. In essence, it's simply a loss of confidence or a lack of confidence after perceiving something as more significant than it is. As you mentioned, like becoming President of the United States—you'd experience imposter syndrome because you know it's too big a role. In a work scenario, particularly in agencies, it often happens when changing roles, such as becoming the head of the department or a director for the first time.

You see that label or title [00:02:00], and suddenly, there's pressure, which leads to a lack of confidence. This then gets labelled as imposter syndrome. Have I ever felt it? Yeah, I have—definitely. The instance I remember most vividly was when I first became a director.

I think it's super common in agencies. When you start, you're doing all the disciplines. For instance, when we started, my role was essentially SEO exec, then Senior SEO manager, then head of SEO. You're doing all of that while also handling operations, marketing, et cetera.

As you build the team, they gradually take over the SEO roles. At one point, I was the SEO manager, and then we hired Dan. I then essentially became a head of SEO, though these weren't formalized roles or job titles—they were more about the tasks you're doing day-to-day.

So I was head of SEO, and Dan was the SEO manager. As that progressed, it reached a point—I think it was early 2021—when everything was handed over. Dan was leading direct delivery, and suddenly, I was a director. I needed to figure out what to do day-to-day as a director.

I thought, "What the hell does a director do?" And that's where imposter syndrome kicked in. Again, this is overthinking it. But before I go into the next section, let me ask: have you ever experienced it?

Antonio Wedral: I experienced imposter syndrome when we first started, especially since I was only 23 years old. I'd find myself on sales calls, speaking to potential clients and trying to convince them to spend money with us. It was challenging. I felt it strongly then, but I haven't experienced it much since because I dealt with it early. It makes sense that I approached it from an age perspective; I felt far too inexperienced and young to run an agency and claim we could outperform others who had been in business for 15 to 20 years.

That's how I felt for a while. But then I realized the quality of our work was so high. I asked myself, "Why am I feeling this way?" I managed that imposter syndrome quite well and pushed it to the side.

Sam Hurley: Yeah. Cause I think I, I knew you were going to say that because I think when we first started the agency, I think you kept.

I'm not referencing imposter syndrome, but I'm asking. It's just, yeah. I don't even know what questions you're asking, but do you ever get worried or like, how do you get past the whole, just no, that we're doing a good job type thing? I think so. I've got notes because we've just done this recently with a member of our team. A few members of our team were struggling with confidence.

And, like, when you outline, if you think what confidence is, how would you describe confidence? I've got notes because I've dug into this with a team member.

Antonio Wedral: To me, confidence is trust in your ability and your mind to be able to do certain things. [00:05:00] That's to me what confidence is.

I'm confident in doing a sales pitch because I trust myself to be my best self. I trust my preparation in advance of it. If that makes sense, it's like a trust in yourself.

Sam Hurley: So what are you trusting?

Antonio Wedral: Myself.

Sam Hurley: And what is it about yourself? Is it your skill? Or your experience?

Antonio Wedral: A combination of everything.

I trust my skills, experience, and form of preparation. Like everything, I trust it like it's a process. I trust the process, and the process is me.

Sam Hurley: Yeah, So that word was a vital process. It's pretty. I find it all fascinating, like defining confidence, and that then leads on to, like, all right. So this is essentially what imposter syndrome is, and I was thinking about how I tackled it. So then confidence is the expectation of a positive outcome, which is essentially what you were talking about.

And it's whether you have confidence in the process or confidence in the outcome, [00:06:00] which are obviously two different elements, which are very interesting. And then confidence isn't necessarily personality. A personality trait is an assessment of a situation that sparks motivation. If you have confidence, you're motivated to put in the effort to invest the time and resources and persist in reaching the goal.

Antonio Wedral: Nice.

Sam Hurley: So then I was thinking back to why I got that impasse imposter syndrome when I became a director, I think it is because you lose that foundational level of confidence. So I guess in an example, when we set up the agency, I had confidence in my discipline of SEO, so I'd like loads of case studies to have worked in-house.

So, all of my confidence came from my knowledge of SEO. So, I didn't have any of the post-syndrome debt when we first started. Again, as I said, it's super common in agencies to lose your discipline when you become a director. Even when you're a head of the department, it's like you could be leading the SEO [00:07:00] team or whatever discipline you become a head of the department.

And suddenly, you're not doing SEO on your day-to-day discipline. So then that's where you lose your confidence. Then, when I became director, it's just like you lose all of that foundational level of what. Is it what makes it good at doing this job? That's when I started to define what a director is, which again is a blog on the website, which you can read.

And then, from there, I think I just did a shitload of reading. So I would do two hours of podcasts a day, just like learning about general leadership. And that side of things, like directors, is typically tied to leadership. That's why you never did any work. Yeah, this is on my dog walks in the evening.

That helps to build that foundational level of confidence. After that, focus on strengths. So it's like not focusing too much on your weaknesses and more on your strengths. It's a similar task we've been doing with members of our team [00:08:00] recently to try and rebuild confidence.

Yeah.

Antonio Wedral: It's interesting, yeah. I think I know what you mean. I've never really thought about it in that way, our experience when we set up the business, because I believe, in my head, it was like, I don't have confidence in myself to run a company because I've never done it before as soon as I got the confidence to run a business.

Sam Hurley: And I think where we started in particular, because you obviously, you're your age, so you didn't have the SEO. Like depth, I think you have had an SEO job for two years.

Antonio Wedral: No, when you were talking, I was just trying to think. I don't even know if you can define it that way, but I think my confidence was genuinely blind optimism.

It was almost just, this is gonna work. I know it's gonna work. I've got no historical, I've got no yeah I've done SEO, I know the industry, I know how an agency operates, I've been in house, but I don't have enough to be like, oh yeah, 20 years of experience behind me, I know I can do this.

I don't have any business experience. I just remember going into it, it was like, we're going to make this work because I trust in my ability. If I really care about something, I know I'll make it work. That's how that started. Then, we initially started. I remember those conversations, which is when I first started having that [00:09:00] imposter syndrome, where I think I was like, I'm asking for fairly decent retainers.

They can see I've got no wrinkle on my face They're probably gonna wonder how old this kid is How am I going to do this as soon as like sales start coming in and people just saw beyond it They saw actually what we were bringing rather than who? Like my how old I was no one ever asked I think then I was like This is more of a deal in my head.

Like it's not that big of a deal and I think over time and then I we move roles so many times. I don't ever think i'd label it as I had impost syndrome with him. I think I just get to a point where I'm a bit like, I'm not sure, I'm not sure if I'm doing this role right. Let me figure out what I need to do rather than, oh, I don't feel like I should be in this.

I deserve this if that makes sense. I think I had more of what I wanted in this role. I deserve to be in this role. I've worked my I've worked my ass off. I don't know what I'm doing. So, I need to learn everything I can and soak up everything possible to make it work. And there might even be something you create.

Like a great guide on what a director is. It might be me doing my reading. It might be me learning on the job [00:10:00], But I don't think then as time went on with the agency. I had that necessarily impostor syndrome. It's more like I need to figure this out because if that's the only way this agency is going to function, I'll figure out how the hell to do this role.

Sam Hurley: How much of yours was?

Anxiety around your age is a number, not a lack of experience. It's said you were a 34-year-old setting up the agency for the first time in a discipline you never knew about, not your actual age. I think it's just my age.

Antonio Wedral: Yeah, because I remember going into it being like, I've got enough knowledge.

And the industry is changing every day. I've got enough knowledge to know,

Sam Hurley: You've got more knowledge than our clients, and you're pitching to them for sure. Yeah,

Antonio Wedral: exactly. And I think that in my head, I've got SEO experience. Like I helped turn around the magazine. I helped so many brands at the agency.

Like I know what I'm doing. I don't have 10 or 15 years behind me, but I know exactly what I'm doing. So, I know I can do an excellent job for brands. I think that was never a thing in my head. I was like, do I have enough knowledge? For me, it was always just the age. I asked, will people take [00:11:00] me and us seriously?

If I'm talking to them, and that was, and as soon as I got over that fear, because I realised no one cared, I was like, oh, we've got a business here, this could genuinely work. Yeah. And then when we hired, that was like the next time maybe I felt an element of it, but

Sam Hurley: Yeah, I think wrapping it up, I think it would be like, I think it is super common agency side, and I think it's not talked about enough, whether the term is the right term or not, but it's like, Whether you find it as a founder, like the example I gave of moving into a director position, not doing the discipline anymore.

I'm just thinking, wow, I've got a team of 20, 30, 40 people. I don't even know what my day-to-day job is. How am I going to lead them? So where there's that of yourself, if you don't have that issue yourself, somebody in your team is guaranteed to have this scenario, like your SEO manager or discipline manager, whatever you call it, becoming a director.

They will then feel it themselves because, all of a sudden, they're a director. [00:12:00] And especially if we've got people like we had in our company moving out of their discipline and they're moving into operations again, that's super common agency side. Yeah. They're going to have imposter syndrome and a lack of clarity about what their role is and what that foundational knowledge is.

But we have a guide on the website all about what a director should be doing agency-side. So, at least, that'll give some form of foundational knowledge and guide direct directors in which way to go to build their knowledge. Yeah, for sure. And also, just like the last thing, it's remembering that many clients that we've worked with and I've worked with will also experience their imposter syndrome.

Antonio Wedral: So whatever business agency you are, many of those are probably young managing agencies, maybe for the first time. And know that is also possible, and you might see that, and it's working out how the account team supports that person in their role and develops them as well. So, it's just being mindful that anyone within your circle can also experience this.

Sam Hurley: Yep, let's call it a [00:13:00] day.

Antonio Wedral: Let's call it a day, let's do it.

Sam Hurley: Alright, hit subscribe and follow wherever you're listening to us. Bye for me as well.

This month, our directors have been preparing for pay reviews by gathering information from department heads. They're using a straightforward method to evaluate each team member's performance based on a few key factors. This approach has helped to simplify my job. It also reassures me that detailed, logical discussions are taking place that build up to pay reviews rather than just picking people at the last minute.

The agency model revolves around people, so it's crucial to ensure your team is thriving, receiving regular feedback, and understanding their roles clearly. Remember, your clients are paying for your team's time and expertise—these are your most valuable assets.

Option 1: Performance

This is my preferred option. Simply place your team's name in the left-hand matrix based on the descriptions outlined in the right-hand matrix.

Anyone in the top green section should be considered for a raise and/or promotion, while those in the bottom-left red quadrant need to be put on performance reviews.

Once everyone is mapped, you can identify who has the potential to grow over the next year with the right training and support. You can also pinpoint those who are hard workers and good for culture but may not reach industry-defining heights. These people are still valuable to your agency when placed in the right role.

Option 2: Values

It's a similar concept, but this time, you're assessing performance against your agency's core values. Core values are crucial; their importance often becomes apparent only after you've made a bad hire. This assessment is less about performance metrics and more about individual attitudes and ways of thinking. It can help identify the role of the previously mentioned workhorses within the overall team.

You can get a copy of this framework in the link below if you are a subscriber

https://docs.google.com/spreadsheets/d/15g5G3NsfJFHdcIiYAvtT0ckJh6NecogUrwxOqixkuSE/copy

Hope this simple framework helps level up your team and your business.

I've always found it particularly difficult to write about culture.

When we first started, culture seemed to come naturally to our agency.

Internally, we recognised culture as a major USP for our business. This was validated externally when we began winning awards. Our proudest achievement was ranking 5th best company to work for in the UK overall, and 4th in the tech category— this award was for all UK companies, not just agencies.

Culture came naturally to us; it was easy.

Then, the world changed.

Covid hit.

Chemistry, laughing, and connection were replaced with muted video calls over robotic internet connections.

Body language was replaced by slack status'.

For our business, this period brought incredible growth. We doubled in size, then doubled again, and doubled again, reaching a peak of hiring two people a month for 14 consecutive months.

But today, as the pandemic feels a distant memory and growth has naturally eased. We find ourselves in a generational paradox where managers and seniors are longing for the olden days of culture (but not too much, not to be full time in the office) but the newer generation not knowing what the olden days were like.

As a result, over the last few months, we've been making a much more conscious approach to culture and, to an extent, it feels like we're forcing it too. The natural approach we used to take doesn't translate to the transactional virtual world; how do you get to know your work colleagues when every interaction has a fixed timeframe (usually 30 minutes) and an agenda point/outcome of the meeting?

Why is culture important for agencies?

For me, culture is everything for agencies. I've worked for agencies, I've worked in-house, and I've owned an agency. Culture is what sets apart an agency from an in-house role. So, if an agency is trying to acquire the highest talent on the market, culture is going to be the big draw for an individual if they are weighing up an in-house role vs an agency role.

In terms of the direct benefits to a business, a better culture means a higher level of engagement from staff. This can lead to a boost across all important business metrics; see the below summary from Gallup (more on this later)

The above stats apply to businesses in general. However, for agencies, I'd argue culture plays an even more crucial role. Agencies are people businesses. We sell to people; people buy people, and those we've sold to are then directly serviced by people we hire. If our hires are unmotivated and disengaged, our clients will notice and be unhappy, regardless of the results they get. This contrasts sharply with, say, a sofa company. In that case, the entire purchasing journey might occur without the business knowing who the customer is, and the customer may never interact with a single staff member. Therefore, if the sofa company's staff are unmotivated and disengaged, the customer remains oblivious and unconcerned—as long as they get what they paid for.

So here's my approach and general thoughts on culture in a new hybrid agency world.

The Fundamental: Give a shit.

In the opening page of Daniel Coyle's "The Culture Playbook," he highlights that "culture" comes from the Latin word "cultus," which means "care." This is the recurring theme you'll find throughout this post, as it's crucial.

The first step is to genuinely care about your staff. If this doesn't come naturally to you, try harder. If it still doesn't, then don't force it.

I'd recommend hiring a leader to take over and own culture at the agency. This can be either a fellow director or you can create a "culture club," with its leader serving as your point of contact and internal culture champion. Generally, it works best coming from a senior figure, as they understand how decisions are made and can influence culture more effectively. Often, this falls under an Operations or HR-type role.

Don't force it. I want to emphasise this point again. When I was in-house, we had a CMO who didn't understand culture, didn't care about the team, and focused solely on performance. This was fine; she wasn't a bully or anything—just intense with little time for us. However, I'll never forget when she clearly read an article or book over the weekend about the importance of engaging with your team to boost productivity.

Her response? We were all seated around an I-shaped desk (about 20 of us), and she started approaching each person, asking how we were and about our weekend. No matter the response, she'd nod, acknowledge, and move on to the next person with the same questions. One by one, it became the most forced, painful experience I've had at work. It obviously didn't come naturally to her; she forced it and, if anything, made the situation worse. I think many of us lost respect for her that day.

People, perks and ping-pong

I'm sure you've seen those LinkedIn posts or tweets that usually go something like a ping pong table isn't culture, eg.

reference: https://medium.com/pushtostart/culture-is-not-a-ping-pong-table-3d3f481cc299

And while I definitely do agree with this point, ping pong tables etc are not culture. They are very much an output of trust which is a huge part of culture, i'd argue one of the biggest parts.

In my in-house role, we had a ping-pong table that revealed which teams had cultures built on trust. Typically, the same groups—often the developers—used it most. Other teams would grumble, questioning their productivity. This provided insight into different department cultures. The developers were output-, deadline-, and communication-driven. They knew their tasks and deadlines, planned effectively, and maintained a positive atmosphere. As long as work was completed, there were no issues. Other teams, however, lacked structure and clear direction, operating too reactively to plan well. Eventually, ping-pong was restricted to lunch hours, defeating its purpose and exposing the company's lack of overall trust-based culture. What management thought would boost morale actually created divisions between teams and negatively impacted the culture, as it was introduced without proper consideration.

Culture means to care.

So i mentioned earlier about the 'caring about staff' point, I also mentioned don't force it. There is a middle ground between this which around getting some of the basics in place. Below are a few examples of what I mean and what we do as an agency, they are broadly grouped into recognition and feedback.

Recognition

Recognition and shoutouts are so valuable in boosting morale. Who doesn't like being told they are doing a good job? What if that was coming from their other peers and not just from their manager?

We use Assembly, which I highly recommend exploring; here's the link: https://www.joinassembly.com/ - in a nutshell, each member of staff gets an allowance of points (you can call them what you want), and they can give these points out to different members of staff when they do something great like adding value, excelling in a client meeting, completing a challenging project. Once you accumulate points, you can use them for rewards like food deliveries, massages and other great perks. In short, this creates a peer-to-peer reward and recognition system that the staff love and boosts culture, sharing and relationships across the business. Even more essential in a remote working world. (Note: The rewards are taxable, so staff won't notice it as the overall amount would be small, but you should let them know).

Remember employee of the month? This is another form of recognition. Yes, it feels a bit old school, but the basic concept is easy to adopt, and staff value it - it's a tried and tested method. Every month, the staff can nominate team members to be 'Novae of the Month' as we call it. If there are multiple candidates, we'd then have a final decision vote between the management team. We announce the winner in our monthly company updates, and they get a £100 bonus as well as company-wide recognition/acknowledgement of how well they've performed this month.

Remember, you don't need fancy tools and apps like the above if you can't afford them. A simple Slack message saying 'great job' is so valuable for the team, especially if it's from the founder or director.

Feedback

1:1 check-ins are great for feedback. You should have 1:1s with all your direct line reports, and they should have 1:1s with their reports. Every now and again, I'd recommend getting in 1:1s with team members who don't report to you. This varies based on the size of your agency, so we don't want this becoming a full-time job where you have 1:1s with everyone. The aim of these should be to get feedback on the business, areas you can improve, and lines of communication to improve.

You'll find not everyone is forthcoming with honesty and giving you what you want, but the ones that do are invaluable, and you should tap into that source of information at least quarterly to ensure that how they view the business from their position is aligned with how you view your business from the top. Remember to remove your founder's hat here; don't take it personally. You won't make everyone happy, but you're doing the right thing by asking; most businesses don't give a shit what their staff think and therefore have a poor culture.

If done right you'll get a picture of your agency from a completely different lens, instead of yours and your leadership teams top down view you'll be getting more of a bottom up lens which is invaluable.

As part of everyone's quarterly reviews they receive anonymous 360 feedback from their peers which has mixed insights and most people are overly positive but every now and again they offer invaluable insights, More often than not we find that feedback we have for the team is then supported by the 360 feedback, therefore it's harder to argue with the feedback if its coming from multiple sources.

Think tank

When we were in our fast scaling stage, we created a concept we called a think tank, which can be summarised as follows:

• Each member of staff was able to get a bonus allowance of 5% per year for contributing towards business initiatives. These bonus' would be paid out quarterly based on hitting agreed KPIs/Rocks.

• The SLT would outline broad themes of areas to improve as a business, e.g. culture, processes, marketing ideas, etc.

• Every month, we would break the company up into groups of 2-3 people, and they would each brainstorm ideas around the theme we decided that month, let's say marketing for now.

• The teams would brainstorm and give feedback on their ideas and thoughts to the SLT.

• The SLT would then approve any ideas we thought fit the business and would drive us forward.

• The team would then allocate these ideas or projects back to them as part of their quarterly KPIs

This is a unique system that give the staff a platform to have a voice, share ideas and contribute to the business which then comes back as a full cycle to them getting rewarded once the idea or project was completed.

My initial concept behind the bonus' was around 'people power' so if we as an SLT knew we had 30 SOPs we needed to be documented, that could take a 4 person SLT team all year to complete on top of day to day work. However if you allocated 1-2 of these SOPs to individual staff we'd be getting these SOPs done within a quarter and allowing the business to scale 4x faster.

This was an incredibly successful model when we were scaling aggressively and hiring two people a month for 14 months in a row. I've written about it in more detail on the NOVOS website here.

However, when we got to the 40-people mark, the model itself didn't scale as well as we wanted. We found the SLT couldn't allocate the KPIs across the entire business, so naturally, we had to delegate this responsibility to managers. However, we found we were paying bonuses for essential non-business tasks. Eventually, we phased it out and replaced it with a marketing menu where staff could still get bonuses, but it was only for marketing initiatives that we knew drove value to the business vs them doing a non-business critical SOP process.

NPS surveys

Every quarter, we do an NPS survey. This is an anonymous survey aimed at gathering scores across a range of different criteria across all different departments. These scores are then communicated to the SLT team and put into their workflow if anything needs fixing. The operations team then stores these scores in Notion so we can benchmark improvements and declines each quarter. Once the SLT has compiled an action list to improve the scores, we then share these scores company-wide so we are holding ourselves accountable for fixing the issues the staff have raised (if there are any, it's not a survey to identify issues, but naturally you can always improve as a business).

Lines of communication

We have three forms of company updates:

• Weekly virtual all-hands on a Friday

• Monthly in the office (remote staff dial-in)

• Quarterly written update via Notion

The weekly and monthly updates can vary, and sometimes, we'll do some deep dives into finances/sales or a specific client account. Weekly, we share the wins of the week across the different departments. Monthly, we share both the wins and areas we didn't do well or areas to improve; this gives department leads the chance to be vulnerable and honest about where they know they can improve. We also give full transparency into finances; we always have and always will. The team can see how successful we are off the back of their hard work, or they can see why we're making certain decisions if we aren't performing well.

Anonymous surveys / Q&As

It's highly unlikely all members of staff will ask questions, particularly junior members. Therefore, with big company updates, we often leverage anonymous surveys to gather feedback from the team. Examples of big company updates include removing a member of staff, updating our new strategy, or making changes to pay brackets and progression. If there are a lot of questions, we will answer them on our weekly all hands; if there are less than a handful, we will just write the answers on a notion page and share them with the whole company.

The key to all of this feedback is to actually action it. It's a waste of everyone's time if you do all of this and do nothing. Action it and tell the staff you've actioned it and it was because of their feedback.

People committee

Once the agency had around ten people, we set up a culture club, which evolved into the people committee, and we became employee-owned. The People committee can be a representative from each department or team, and its aim is to provide ideas for the business to improve; it gives these individuals a voice on behalf of their team, with ideas directly feeding into the board/directors to action. These meetings are chaired by the people committee lead, and as part of being an employee-owned business, they also sit on the trust with one of the selling founders. Every year, we then ask for new people to come forward to join the committee, with previous members stepping back. Our model will be slightly different from most due to our employee ownership setup, but hopefully, this will give some inspiration.

Bigger voice and rep for their team if they have that desire and motivation

The role of managers

If you haven't already done so, I highly recommend subscribing to Bruce Daisley's Make Work Better newsletter.

He recently highlighted the statistics and data from the new Gallup report on the State of the Global Workplace (including data for 100 different countries). He highlights how prominent management is across the stats and key takeaways from the report. His conclusion is, "If you want a better culture, then build better managers". Here are stats directly from the Gallup report above related to management:

• Managers account for 70% of the variance in team employee engagement.

• When firms deal with this and increase engagement, this cascades into profit, customer service and retention (some of this is in the image below)

• Twenty per cent of the world's employees experience daily loneliness - it is higher for young employees.

• Work itself normally decreases loneliness. In general, working adults are less lonely (20%) than those who are unemployed (32%)

• Being a manager is a force multiplier - the highs of work are higher for managers, the lows lower.

• Managers are more likely to be engaged and thrive in life. They are also more likely to feel their opinions count, to feel connected to their organisation and to have peers they can rely on for support.

• On the flip side, managers are more likely to be stressed, angry, sad and lonely than non-managers. Managers are also more likely to be looking to leave their jobs.

• When managers are engaged at work, their team members are also more likely to be engaged (and as mentioned above, 70% of the variance in team engagement can be attributed to the manager)

So, based on this, your priority as a founder should be to support and level up your managers if you want to improve culture. You can invest in your managers either with time or with money. So start with either yourself or your leadership team running 1:1 or mini-group sessions to support them and train them based on your experience. Once this is done, the next step would be to invest in external management courses as part of a regular training budget.

I'd also recommend getting your managers to sign up for Paddy's newsletter here > https://thenewleader.digital/about/ < he's run a digital agency in the UK for over 20 years and now runs this newsletter to help level up managers. Our team highly rates it and often shares it among themselves.

Connection is another big part of culture which can be achieved through various different types of team culture activities. I won’t go into detail on these but I would recommend reading Daniel Coyle's 2 culture books. The Culture code and the culture playbook. Both are excellent reads for all things company culture.

In conclusion, fostering a strong and positive culture within an agency requires genuine care, effective communication, and a commitment to continuous improvement via feedback. Culture is not about superficial perks but about creating an environment where employees feel valued, heard, and inspired. It's essential to have leaders who exemplify the values of the company and who are willing to invest in the development of their teams. By prioritising culture, agencies can enhance employee engagement, boost morale, and ultimately achieve greater success.

When I used to work in-house for a brand, I asked ten of the leading agencies in London to pitch to me. Each 30-50 page slide deck said the same thing: they all claimed, "We're unique, we're data-driven, we're creative," but there was no differentiation.

Sound familiar?

It's a familiar scene in many agency niches.

I believe this stems from a lack of strategy.

As Alex M H Smith's book "No Bullshit Strategy" aptly states, "The whole point of a strategy is that it sends you on a different path from anyone else."

Without a clear strategy, agencies naturally fall into the same patterns. A well-defined strategy anchors your agency and keeps its fate in your hands.

In this post, I will guide you on how to create a strategy for your agency. I will reference the books "No Bullshit Strategy" and "Blue Ocean Strategy"—both of which I recommend you read. I will merge their principles with my experience of running multiple agencies.

I genuinely believe 90%+ of agencies lack any form of true business strategy.

I believe this is down to:

1. the unique nature of how agencies are founded vs a traditional business

2. the nature of the agency business model

I will explain both of these in more detail at the end.

Common pitfalls for agencies

There are 3 major pitfalls I see agencies make when it comes to defining a strategy:

1. Agencies are guilty of saying, "We're going to be the best at <insert service here>," but best is subjective, and that's not a strategy. It gives no direction.

2. Saying our strategy "is to sell the agency within 5 years" again, this isn't a strategy; this is a goal - I've been guilty of this in the past!

3. Finally, referring to a 'plan' as a strategy. Each year, the agency owners give a strategy update to the team with new priorities of what they want to achieve this year. That's not a strategy, that's a plan.

What's the difference between strategy and a plan?

A strategy is the overarching approach and direction for achieving long-term goals, while a plan is the detailed roadmap and specific actions to execute the strategy.

To learn the difference, see this 10-minute HBR video, which will explain it way better than me:

What is strategy?

This is where the issue lies.

Over the years, strategy has been violated by people who don't know what it is; claiming anything high-level and fluffy is a strategy. If you don't understand, then "you aren't strategic enough" (this exact scenario happened to me when I worked at my previous agencies).

The 'official' definition of strategy is "a plan designed to achieve a particular goal." Watch the video above to see why this definition doesn't work and where the confusion lies.

In No Bullshit Strategy, the author Alex adapts this definition to business and defines strategy as:

"The unique value a business provides to the market."

How to define your agency strategy

To make this actionable for agencies, we can break this into two parts: value & the market.

The value i'll be leaning on is the “No Bullshit Strategy” again; for the market, i'll be referencing the "Blue Ocean Strategy".

Defining your agency value

First, you need to outline the value your agency provides to your clients.

This should not be service-related; it needs to be the value your services provide to the client. Treat your services as a tool to facilitate and achieve this value.

For instance, my interior design agency's strategy is to make interior design services accessible to families. Currently, they implement this through virtual online interior design, which keeps the costs low and allows everything to be done without the customer leaving their home (and delivered within a month). The same strategy could also be achieved through different services or products, for example, affordable homeware products designed for families or a private members club where families can share peer-to-peer advice about interior design.

Your agency is not the service it offers; it's the value it provides to your clients.

Here’s some visuals to help

Image adapted from No Bullsh*t Strategy by Alex Smith. Service 2/3 can be complementary of service 1.

Image taken from No Bullsh*t Strategy by Alex Smith

Branding

To reference my interior design agency again, the strategy influences our branding. Branding is a way this message is communicated to the market. We needed to make the site more accessible and friendly, using welcoming language and transparency with pricing to appeal to families. This differentiates from the typical interior design service you see in the market, which is intentionally unwelcoming and only wants to work with higher-end clientele.

Questions to ask yourself & communication

So, to get to your value, ask yourself or your senior leadership team questions like:

• What core benefits do our clients receive from using our services?

• How do our services positively impact our clients' businesses or personal lives?

• What unique outcomes do we deliver that set us apart from competitors?

• How do we make our clients' lives easier, more efficient, or more successful?

• How can we articulate the transformation of our clients' experience due to our services?

You may not need all 5; just one of these may be enough to trigger an answer.

If you are struggling, ask your most trusted clients.

Remember, your value should not reference your service offering and should not include subjective words like 'best' or 'great'.

The reason you want to do this is because your strategy should be set and barely change for years.

The way you operate or your services may change over time but only in line with the strategy.

For example, if you offer paid search as a service today, what will happen in a few years when Google automates this service with AI and clients no longer need your agency to manage it? They will just pay you for one-off audits or strategy work. That'll reduce your pricing, and your agency will shrink. However, having an overarching strategy that doesn't reference paid search opens up your thinking and planning to think broader and still add value to your clients through different service offerings to achieve similar value.

This further emphasises why a good strategy is a long game. You may be completely fine for the next 5 years + with your paid search offering, but eventually, one day, you won't be due to the pace that technology and Google are changing.

Google and Facebook are excellent recent examples of this. The most obvious way they've done it is with parent companies Meta and Alphabet to open up the same value Google and Facebook did but over a much longer timeframe and across a broader range of products and services.

Also, think of this from a team communication perspective. You communicating a broader value-focused strategy now shows there's a longer-term view, there's a plan in place, and they can trust you. However if in 5 years time you do a company update to say we're no longer a paid search company it will come across very erratic, no doubt it would be rushed without a plan in place and your team will naturally lose trust in your leadership and direction.

Defining how your agency competes in the market

When we first set up our agency I could easily define our strategy, why were different and how we competed.. in my head… but if you asked me to articulate this in a team presentation or a word document I would struggle.

This is where the Blue Ocean strategy principles helped.

The general premise is when you enter a market you are up against a varying degree of competitors, many of which are established businesses so it's impossible for you to compete on all fronts with these businesses.

Therefore you have to dictate which factors you deem more valuable and important to your customers and which are not.

These are the differentiating factors that set you apart from the market.

As I mentioned at the start, The whole point of a strategy is that it sends you on a different path from anyone else < this is exactly what you are doing with this exercise.

You are essentially saying, “they think this is important but I don't I think this is more important”.

First you need to do a bit of research around what are the factors that a potential client would look for when using your services eg. creativity, data, service, location, industry knowledge, social presence etc. Any factors your potential clients could score you against when you pitch.

Next, these are the 4 quadrants to look at:

The true sweet spot is in the elimination and the creation factors. What are your competitors doing that you will not do at all?

This frees up your resources and focuses your attention on creating something different in the market.

You can see if you don’t think this way you may just look at all the major players in the market who are 'creative-led' and you naturally think to compete in this market we need creativity as that's what the others have. But they maybe thinking the same thing as you and just copying the market leader, they aren't putting their focus on something new because they don't have a strategy.

If you want to see my agencies' value curves, I share them in my course; https://learn.theagnc.co.uk/

To give insights: Our SEO agency was London's only e-commerce specialist at the time, setting us apart as the market often ignored e-commerce due to lower margins and smaller retainers vs finance, fintech, and b2b brands.

We also established an employee-owned model unique to our industry. Recognising our clients were non-SEOs, we prioritised simplicity in our SEO approach, staff and training. This was a contrast with competitors who either didn't need to simplify or maintained SEO as a complex 'black box'.

Within three years, we grew to 40 employees. Despite being a niche agency, we became larger than most SEO agencies that catered to any market.

This is also a good example of how strategy needs to adapt overtime. Our success led many agencies to mimic our approach, they were attributing our achievements solely to aspects they could replicate, like 'eCom specialist' but missing the overall strategy and approach we had.

However being a copy cat agency means you are always behind as you don't have a clear strategy and way of thinking to anchor your business. Now other agencies have copied us we need to create even more value to further differentiate us and make it harder for them to copy.

Once done you'll end up with something like this which is such a good way to visualise to your staff how you compete in the market vs your key competitors. Particularly for new starters who can easily visualise skills they need to develop working for us vs their previous agency.

Remember, don't overlook your indirect competitors. The Blue Ocean Strategy, for example, suggests that an airline should consider car, train, and boat companies as competitors because these are alternative means of travel. Customers might explore these alternatives before deciding to fly. Therefore, airlines should broaden their marketing to emphasise the benefits of flying as compared to taking a train or other means of transport.

In the field of marketing, social media agencies should consider SEO agencies as indirect competitors. This is because, before deciding to invest in social media, clients would have previously decided where to allocate their budget based on certain needs, such as ROI. At this stage, they might choose to invest more in SEO vs Social.

Bringing this together

To articulate this to staff, as No Bullshit Strategy mentions, don't do a presentation deck. A strategy is something you articulate, you don't present it. Agencies default to presentation decks way too much.

For our strategy write ups I use Notion pages.

Typically, start with the value outlined above.

Then, you'll want to articulate the strategy using the following framework;

What do agencies do right now in the market ….

… why this doesn't work ….

… instead, our agency's belief is …

...and therefore, our agency's solution is this.

Remember, don't use subjective terms like 'best/great'.

Once this is defined (one big paragraph or 3-4 mini paragraphs) you'll next need to outline the phases your agency will go through to achieve success.

For example, an agency just starting out could look like this:

Phase 1: Proof of concept

Is there a business model here? Why haven't people done it before? Is it just a consultancy game with margins being too low to build out a team?

Phase 2: Foundations

Outline the bare essentials of operations; now the proposition has been proven what does the team look like, who is our ideal hire, what is the hierarchy, what are our sales targets, what tech stack are we operating on, what do our contracts look like

Phase 3: Growth

Paragraph about scaling and growth, sales targets, marketing investments needed and expansion plans.

Phase 4: Automation and Efficiency

Increase efficiency and reduce costs through automation

Phase 5: Advanced Client Segmentation and Personalisation

Enhance service delivery and client satisfaction through tailored solutions

You get the idea.

The key to this stage is not to commit to timeframes; remember, that's the planning stage. This is the strategy. It's likely you may be stuck on a certain stage for much longer than you think.

Each year your agency should then outline the plan for the year, this plan should outline the phase you are on eg “last year we planned to complete phase 2 but due to resource restraints we didn't achieve it, therefore this year we aim to finish phase 2 and move to phase 3 to do this we will need to invest X, we will need to hire a new marketing manager in June etc”.

Remember, strategy is long-term, so the phases should intentionally take a long time to achieve. They should also help massively with prioritising issues within your annual business plan. For example, with my SEO agency, we were about to kick off a big innovation project, but once we aligned this to the strategy, we could see we hadn't yet finished the current phase and instead pushed our innovation project back 6 months.

Without this strategy in place, the plan won't be nudging you in a particular direction, you'll be too reactive to the issue that happened last quarter, and you'll likely end up with a huge amount of options, none of them connected, you and your team will be overwhelmed, you'll end up doing a huge amount of work but won't tangibly achieve anything as you won't be moving between the pre-set phases of your agencies strategy.

Strategic Thinking Skillset

When it comes to skillset, if you are an agency owner and struggle with thinking strategically, I'd recommend first reading 'The Six Disciplines of strategic thinking by Michael Watkins' he outlines the following skillsets and disciplines of strategic thinking that can be developed:

• Pattern recognition

• Systems analysis

• Mental agility

• Structured problem solving

• Visioning

• Political savvy

Second, if you are still struggling, book an Agency Alignment call, and i'll be happy to help https://calendly.com/sam-yean/agency-alignment

Why I think Agencies Struggle with Strategy

You should now be able to see the big difference between a plan and a strategy. More importantly, you should also know how intentional strategy is and how important it is to differentiate from competitors in the market.

I truly believe 90%+ of agencies lack any form of true business strategy.

There are many ‘general’ reasons for this, e.g., there's no clear definition, the term has been violated by senior business executives, a plan becomes confused with a strategy, and it's a skill you need to learn.

However, for agencies in particular, I think they are further impacted due to two major factors:

1. A large amount of agency founders are accidental business owners. They start doing their discipline eg web design, and they f*ing love it, they are so good at it therefore demand naturally grows and before they know it they are leading a team. The founder is either still doing web design because they love it; therefore, no one has defined the business strategy, OR they are dealing with the people and business problems, and no one has ever taught them how to do a strategy, or they don't have the time to create one.

2. Agencies are way too embedded to their service, missing the overall value they are offering to the market. This is why strategy is often referred to as the 'big picture' (or other nonsense terms like that). Strategy requires thinking beyond your service offerings to consider the value you provide to clients and how you stand against competitors in your market. This process takes time and a degree of critical of thinking that demands detachment from your business to assess everything objectively, without emotion or bias.

Thanks for reading

At the start of my career, I worked for two different agencies. Both hired project managers (PMs) to support client delivery. Despite leading the delivery teams, I often found myself project managing my project managers.

When I transitioned to an in-house position and hired an agency, the pattern repeated—I was managing the agency's project manager.

As a result, when I started my own agency, I was strongly against hiring project managers. Throughout my career, I saw little value in the role, both as a client and from the agency's perspective.

3 years this lasted.

Then I came across this visual:

To be clear the table is showing multiple different agencies with the same level of income but the agency with more project managers had a smaller overall team and as a result higher profit margins.

Despite being extremely generic and lacking context or details on exactly how having more project managers contributes to a smaller team and more profit, I was intrigued.

When I saw this table we were at a point where we were planning to sell the agency to the staff. To prepare for a sale, you focus heavily on EBITDA and reinvest profits into scaling growth.

However, with the agency's sale, the employee ownership model would only be successful if we changed our focus to being hyper-focused on profit margins. That's why the visual above caught my attention. I wondered if it could be a quick win for us in terms of profitability.

Fast forward six months, and we hired our first project manager.

It was a disaster.

We extended her probation period and eventually ended it.

I then decided to maximise our budget to hire a more experienced project manager who could work across the agency globally and not just within specific pods or services.

Fast forward another 18 months, and I now have my own visual that aligns with the one shared above to showcase the contribution PMs can make to your bottom line.

The most significant impact we saw was reduced freelancer spending due to better management and planning, followed by a smaller team delivering the same amount of client work.

From day one, it was clear PMs alone don't achieve the above visual

It's a company mindset change towards more structure, dedicated resources to policing budgets and time, holding individuals accountable and avoiding over-delivery to existing clients, time that can then be used for new clients or marketing. 

The aim is for someone without your discipline knowledge to be able to manage and understand what is being delivered each month. These should align with what is outlined in your SOWs and contracts, so there is no doubt about monthly expectations from your clients and your delivery team. 

The bottom line is that time is an agency's most valuable asset, so PMs allow you to get much more insight into how and where that time is spent. This allows them and the wider team to ask why and make changes on a weekly basis. 

Here are my learnings from building out a PM team:

Maximise your budget

Maximise your budget and hire the most senior PM you can. We made this mistake with our first PM hire; the salary savings we made are just subsidised by the additional time it takes for the directors or founders to train, support, and handhold. 

Hire an agency PM

Hire a PM with agency experience who understands critical metrics like utilisation, realisation, bill rates and billable capacity. Ideally, you'd hire a PM with agency experience similar to yours. Based on my previous experience with PMs working in a development agency, which is incredibly structured, output-driven, and project-focused, it is very different to a more strategic, consultative, performance-driven agency working mainly with retainers over a 6 to 12-month basis.  

Sort out operational foundations first.

Ensure the core operations are in place, i.e. a PM tool like ClickUp/Asana, etc., as well as a time tracking tool. At this stage, it's not a priority which specific tool you use; a PM can come in and recommend better tools and train the team. The most important part of this recommendation is that the PM is coming into an agency with a culture around tracking work to deadlines and tracking time. If you don't have this way of working, it can take the PM much longer to become effective.

Standardise or productise delivery outputs

Standardise your delivery output as much as possible. I'll write about this in a future post, but when we hired our senior PM, there was nothing for her to actually PM in one of our services; we were overly focused on the individual's quality and needed standardised outputs each month. So, every client was getting varied deliverables each month. If this sounds familiar, keep an eye out for future content around this topic as it's transformed how we work as an agency: aligning expectations on outputs from sales to delivery. This is common for agencies that operate more on a retainer basis, where the activities per month can vary. 

PMs should manage £1m

Don't worry too much about the general 'rule of thumb' that a PM should manage £1m worth of clients per pod. Our PMs work globally across the agency, working closely with our CFO consultant, and it's still working well with a team of 2. That said, going back, I would have hired our first project manager around the £1m-£1.5m mark. 

Hierarchy and chain of command

Finally, ensure you have a clear hierarchy and structure specifically around how operations interact and work with the delivery team, as the PMs typically straddle these two departments.

To conclude, I was wrong about project managers. Hiring project managers at the right stage of growth for your agency can strongly impact your bottom line. However, as an agency leader, hiring the right project manager is crucial. You must establish the right culture, provide the necessary infrastructure, and empower them to make decisions and challenge the delivery team. All these factors enable them to contribute to the agency's profits. However, they can't achieve this alone; it requires a mindset shift from you and the business.

We officially set up our agency in January 2019. Within these 5 years, we've grown and led our business through the following:

• Brexit

• A global pandemic

• Multiple lockdowns

• Liz Truss' epic 2-week fuck up of the UK economy.

• Boom and bust of the DTC and eCom space from huge spikes in Covid shopping behaviours and subsequence drying up of aggressive investment in eCommerce

• An ever-looming UK recession which 'officially' hit in 2024

• Ukraine War

• Isreal Gaza War

• Cost of Living Crisis

I'm sure that I've overlooked a few things. On a personal level, I've navigated a house move, the birth of my son, selling the business to the staff, as well as other personal challenges you can read about in my mental health post.

Safe to say, I have navigated through uncertain times as a leader.

Leading an agency, particularly during uncertain times, requires resilience and calm. As an agency owner, you're not solely managing a business; you're navigating your team and, at times, your clients through challenges that can either weaken or strengthen your collective resolve.

Here are a few lessons about agency leadership in times of uncertainty.

Foster a Culture of Trust Through Consistent Messaging

Amid the ever-evolving agency landscape, be the constant your team needs. This includes being reliable and consistent, keeping communication lines open, and setting clear expectations.

We aligned client and delivery expectations through a standardisation project. This project sets the minimum monthly outputs a client can expect based on budget, eliminating uncertainty or ambiguity. This clarity also benefits our team, as they understand the minimum monthly expectations they must meet.

On a personal level, I started journaling more frequently to maintain consistency and prevent my emotions from driving my decisions. This practice allows me to think through and articulate my decision-making process more deeply.

By 2022, we had become a much more data-led agency. I wish we had made this transition sooner, as it helped considerably with the above. I'll write a future post about building a data-led agency as we've implemented some cool, innovative tracking.

In times of uncertainty, the last thing your team or clients need is mixed, inconsistent messaging from the founder. Don’t worry if you feel like you are repeating yourself; I struggled with this early on, thinking I needed a fresh message every time. Consistency, transparency and honesty are key to building trust with your team and clients.

Stay true to your Vision and Values

A vivid picture of the agency’s direction can boost, align and motivate your team. This vision should be both aspirational and grounded in achievable milestones.

From day one, NOVOS specialised in SEO for e-commerce brands, a choice driven by passion and the anticipation of industry growth. The global pandemic further accelerated eCommerce growth by at least ten years.

During this time, we greatly benefited and found ourselves in the right place at the right time. As a result, we didn't have to rely heavily on our vision or proposition since we were thriving. We hired two people a month for 14 consecutive months, riding a wave of success and growth - and everyone was on board.

However, when the lockdowns ended, the demand in the industry shifted dramatically.

Almost overnight, we went from being in the right industry at the right time to being in the wrong industry at the wrong time. Venture capital investment in e-commerce dried up, and many e-commerce and direct-to-consumer brands went bankrupt.

During these challenging times, we leaned more on our vision and proposition. We could have easily pivoted into finance or travel for higher profits, but we chose to endure the difficult 12-18 months, staying true to our values. Unlike many other agencies that were blowing with the wind, following the money around and not standing for anything, we prioritised a purpose over profits.

Communicate: Honestly, Transparently and Frequently.

In an industry often driven by client needs and market trends, it's crucial to be upfront about the agency's situation. This includes being honest about challenges and realistic about opportunities.

Internally, we increased the frequency of communication with staff. During 'peak' COVID, my business partner often sent the team reassuring summary emails. Our communications gradually evolved, which now includes the following:

• All Hands: a virtual weekly call with the team. Typically, departmental updates, a client win, recent work or a business announcement.

• State of the Union: A monthly company update covering all aspects of the agency, including monthly insights into the agency's financial health; good or bad, we always share the finances.

• Quarterly Deep dives: a more detailed version of SOTU around a specific department, e.g. finances, marketing or ops.

• Quarterly business reviews were introduced in 2024 and our first written-only comms. I'd send out a 1-2 page summary of where we're at as a business, how the last quarter went and how the next quarter looks.

Remember that everyone digests information differently, which is the primary catalyst behind the quarterly write-up. It's much harder to misinterpret a message when it's communicated in black and white via email or notion. It also ensures that everyone is getting the same, consistent message. If someone misses an all-hands or state of the union, the actual messaging may be diluted or different when passed on via another colleague later.

It’s okay not to have all the answers; no one expects you to have solutions to a global pandemic, the economy or wars. Saying so is an excellent opportunity for you to raise trust with your team versus coming up with solutions or plans that will change in a few weeks as new developments arise.

Strengthen Client Relationships

In uncertain times, clients look for stability. Be proactive in communication, offering insights and strategies that anticipate their needs.

Relationships are so important for agencies. We created a relationship score so we could take a data-led approach to client relationships. We focused on activities that influence a relationship—more on this in a future post.

Agencies have a unique perspective, gaining insights into multiple different businesses. This is a unique vantage point in difficult times; your clients do not have the same vantage point, so even simple comments like “everyone is struggling with demand or conversion rate this month” are massively reassuring for clients so they know it’s not just a problem with them or their business.

Invest in Your Team's Growth

Use periods of uncertainty as opportunities for professional development. Workshops, training sessions, and cross-disciplinary projects can enhance skills and morale.

During times of uncertainty, it's wise to preserve and build cash in the bank for a fallback and reassurance if times get tough.

So, during the lockdown periods, we looked to conserve some money and limit external training costs; instead, we dramatically doubled down on internal training. We introduced a weekly internal training slot so that every week, the team was learning from each other and growing as individuals until we got back to a point where we re-introduced external training again. We also used this P2P learning approach with other agency partners. You don't need to spend money to develop and train your team.

Here are just a few more points to consider around leading in uncertain times for agency leaders:

• Empower Agile Decision-Making: Encourage teams to adopt a flexible approach to projects and client work, enabling quick pivots without sacrificing quality.

• Reframe Uncertainty as a Way to Fuel Innovation: Encourage your team to view uncertainty not as a barrier but as a launchpad for creativity and new business models. Agency teams thrive on creativity, and challenging times can spur innovative solutions.

• Resilience and Wellbeing: Beyond business objectives, prioritise your team's mental and emotional wellbeing. Initiatives like regular check-ins, wellness programs, and flexible work arrangements can maintain morale and resilience. During peak lockdown, we allowed staff to expense Bloom & Wild flowers to send to their families; we also did autumn photo competitions to encourage the team to get outside and go for walks. Looking back, it was a lovely touch and something I am proud we did during a tough time.

• Read broader: On a personal level, I found reading broader publications outside of my discipline hugely beneficial during the lockdown period and continue to do so today. Again, your team needs to be the ones reading industry-specific publications; you should broaden and understand how the economy works and the trends and impacts of politics on your business. I tried a few but eventually settled on the FT and the Economist, which have helped me understand broader macro trends on finances, the economy and ultimately, my business. I also found this helped me to get perspective, it's easy to get consumed in your little world, but reading these publications reminds you the economy is impacting all businesses.

Leading your agency during uncertain times involves not only survival but also seeking opportunities for growth, both as a business and as an individual.

The strategies outlined here can help cultivate a culture of trust, innovation, and resilience, enabling your agency to endure challenges over time. As an agency owner or director, your primary focus should be on making confident decisions.

In conclusion, steering an agency through uncertainty requires strategic thinking, transparency, and empathy. You can navigate difficult times by building trust within your team, maintaining a clear vision, acknowledging challenges, strengthening client relationships, and investing in your team's development. As we continue to deal with unpredictability, these strategies can serve as a guide to ensure resilience and readiness for success.

Reflecting on this topic, consider when times were ever certain. We never truly live in certain times. There's always something happening, and if there isn't, the media will create uncertainty because that's their nature. As an agency founder, you cannot control this. Instead, concentrate on what is within your control: your skills, your mindset, the content you consume, and your communication with your staff.

"Do I even need to hire someone?" is a question agency directors should ask themselves more.

Back when NOVOS was hiring two people a month consecutively for 14 months, a large proportion of this hiring was necessary to keep up with demand. Still, a small proportion was not, so I've been guilty.

It's a question we're currently asking ourselves for my interior design agency, The Living House. We've had a great start to the year, and it's time to start thinking about what's next and whether we need to hire our first full time staff. Later, I outline the decision-making process we're going through regarding hiring, along with our conclusion.

Below is everything that has gone into this decision, as well as more from my experience of running and coaching agencies.

Whether it's your first member of staff or your 50th, I see way too many pitfalls in agencies' approaches towards hiring staff.

To help you answer this question more confidently, i've split my approach into two parts:

• Qualitative assessment: solopreneurs should focus more on this. It can also be handy for larger agencies that may have a department with a headcount of 1 and are thinking of expansion.

• Quantitative assessment: this approach should be used more by mature agencies looking to scale and require complex data to make their decision. Again, it can benefit a solo freelancer to get even more confidence behind hiring their first staff member.

Part 1: Qualitative assessment

As referenced above, this is a section solopreneurs do not focus on enough. They get busy and hire without doing enough of a qualitative assessment to understand 'Is this what I want to do?' and as a result, there are so many 'accidental agency owners' in the world. Most are incredibly stressed because, deep down, they don't want to run a multi-person business, and they miss doing the actual work (which, more often or not, was their passion).

I've also seen larger agencies be guilty of lacking this qualitative assessment, particularly in one person's department. These are typically back-end departments, e.g. project management, operations or support functions like design, data, etc. A 'luxury' hire in these departments can significantly impact your margins as they aren't directly contributing to the agency's delivery.

It's easy to hire a department lead, an exec, or an assistant to manage; there's little logic to why you do this other than to give the perception of their role and department growth.

I've been guilty of this; we've scaled up a three-person data team, but now we only have one, delivering considerably more output than the three-person team. I've hired three writers when we only needed two. At one point, our operations team was four people; it's now two, and we're double the size.

If you are thinking about hiring someone, and if it is your first employee, it's naturally going to be a decision full of anxiety and doubt.

Below are five more questions to ask yourself to assess whether you should hire someone.

1) Am I ready to invest time in training and onboarding?

Hiring someone is just the beginning. You'll need to invest time in training them about your business processes, expectations, and the quality of work you deliver. Ask yourself if you're ready to dedicate this time, understanding that it might temporarily reduce your own productivity.

2) Can I afford the financial cost of hiring someone?

Beyond salary, consider the costs associated with employment or contractor fees, software licenses, and any additional resources they might need. Do you have the financial stability to cover these costs without overstretching your budget? Retainers help massively with this, of course; see more information below.

3) Am I prepared to manage and lead someone?

Managing people involves more than delegating tasks; it's about motivating, providing feedback, and sometimes having tough conversations. Reflect on your readiness to take on these responsibilities. Are you prepared to be a mentor and leader, not just a boss?

4) What is my plan for communication and project management?

Effective communication and project management are critical to a successful collaboration. Do you have systems in place (like project management software) to keep projects on track and facilitate smooth communication? How will you ensure that your new hire is aligned with your goals and working efficiently? How will you assess that the new hire is delivering the output you expect?

5) Do I have a clear understanding of what I need help with?

Identify the specific tasks or areas of your business that require additional support. Is it administrative tasks, client management, or a service that complements your offerings? Having a clear idea of the role you need to fill ensures you look for the right skills and fit for your business. I outline my recommend 10-person agency team and how to achieve this using an 80/20 framework, in my course: https://learn.theagnc.co.uk/

When it comes to finances, you must consider the next 3-6 months.

If you don't operate with retainers, it can be challenging to know, and you'll need to rely heavily on experience and data, something you'll only have if you've been running your operation for multiple years.

A friend of mine was a solopreneur and hired his first member of staff. He needs retainers and projects. The stress and worry of having someone else be responsible for them financially caused a considerable amount of anxiety for him that stretched beyond just business and started to expand into other areas of life.

As referenced above, we ask ourselves this question at The Living House. Our conclusion? No, we're not going to hire yet.

The big challenge with The Living House is projects, not retainers. Therefore, I foresee us being incredibly stressed, just like my friend, and not enjoying the growth and journey we're seeing.

As a result, we're going to tackle this approach in two ways:

• 1) Create a waiting list rather than trying to take all business in one month. Calculate a cap and push the other clients into the next month. The list can help to create scarcity and demand in our service. We can charge premium rates for 'accelerated' packages, and it can also start to facilitate future income.

• 2) Attempt to get a fixed rate of income each month. Can we get a monthly fixed income to cover our fixed costs if we can't charge retainers? The answer is a paid-for community membership.

Further questions would be:

• What is my end goal? see more here: https://theagnc.co.uk/p/performance-vs-lifestyle-agency/

• Will I take a short-term hit financially to benefit the long term?

• Do I enjoy working with people?

• Are you just being pressured into hiring by society, friends, social media, or your internal brain?

Part 2: Quantitative assessment

I use data to inform decision-making across all departments in my agency; hiring is no exception.

Hiring your next employee, whether it's employee number two or employee number two hundred, always comes with a bit of uncertainty around timing.

The agency model lends itself to a balancing act between having capacity in your team and the demand for your services.

Too much capacity for too long means you could have been making more profit. Too little capacity means busy staff, which will no doubt have an impact on the quality of your work.

To decide when to hire, I use a metric called billable capacity.

To calculate, you first need to calculate each individual's bill rate or day rate. The day rate is the rate at which you bill your time to clients relative to their cost rate (their salary). You can do this by role instead of doing it for every individual in your team, e.g. any team member with the senior account manager title is billed at X rate, which will also be reflected in the salary bandings for that role.

To calculate the above, please see this post:

https://theagnc.co.uk/p/super-simple-way-to-calculate-a-bill-rate-in-under-10-minutes/

Billable capacity = (Day rate x days in a month) * Utilisation rate

For the days in a month, I just average this out to 20 days per month; there's no need to calculate this metric each month.

Next, you will want to use this metric to calculate the utilisation rate.

Utilisation takes into account how billable an individual role is. You shouldn't assume that a director has the same billable time as a junior. The further up the hierarchy you move, the more management time you need to factor into individual’s time.

Above, you will see a benchmark for utilisation rates across different seniority levels for an agency above £1m; this is from the WOW agency, which compiles data annually from many different agencies in their benchpress report. I'd recommend checking out their report every year to get the state of play for agency finances; they also have separate data for agencies under £1m.

Use a rate that is achievable per role.

If you don't know what's achievable you need to be leveraging time tracking to know where individuals time is going and how billable they are right now as a benchmark. If you don't have time tracking, I'd recommend starting at the low utilisation level for all roles.

What you can't measure, you can't improve, hence why you need time tracking in place (more on this in other posts!)

For a quick example, we will assume a junior operates at the following:

• Day rate £750

• Days in a month 20

• Billable amount 80%

• Billable capacity = £12,000

This tells us that this staff member should be billing at least £12,000 worth of client work monthly.

This is the starting point for building a forecast for your existing client income, pipeline, and team capacity.

So, in a nutshell, what we've done here is assign a monetary value to your staff's time, which can then be mapped to client income.

I have created a basic financial model for you here (you're welcome!).

In the document, I've outlined the above across multiple tabs; each tab has a description to walk you through what you can and can not change.

I walk you through this document in my course: https://learn.theagnc.co.uk/

Using a simple example from the document, I've added a few scenarios of income and existing clients.

Now, why is this important?

Because it comes back to the original question right at the start of this post, "do I even need to hire?"

Once you've inputted your data, head to the summary tab.

In my example, you can see that June and August are negative capacity. However, when you look at September onwards, it's positive. Therefore, this model shows us that this negative capacity is only short-term, so you will unlikely need to hire as you could cover this period with a freelancer instead.

I describe the above example as the difference between capacity and resource planning. Too many agencies focus on resourcing over capacity—more on this in a future post.

So, to conclude, next time you are looking to hire, ask yourself the question, "Do I even need to hire someone?" and go through the qualitative AND quantitive analysis referenced above.

Once you've done that, you will be more confident that you are making the right decision. Making the wrong decision could significantly impact either:

1. You, as an individual

2. Your business's profitability

3. The quality of your agency's work

All of which are pretty damn important if you ask me!

I've worked in SEO for over ten years.

From my experience working in-house at MADE.com (RIP! the fools), I fell in love with eCommerce SEO & set up NOVOS, an SEO eCommerce specialised agency.

Merging my three unique levels of experience, SEO + eCommerce + Agencies, I've created what (I think anyway) is the best SEO site structure for an agency website, taking inspiration from an eCommerce domain.

Note: These days, in SEO, you need to think user-first, so this structure is also UX-led.

I've screenshotted some of the images from my course below.

The typical agency website structure

So, this is how most agencies would structure their website. I've used the NOVOS service offerings as an example, which is an eCommerce platform. For The Living House, this is done by room (e.g., living room, kids' room, etc.).

As the slides say, there's nothing wrong with this structure.

From an SEO perspective, you'd want to improve the internal linking across the website to create a strong content hierarchy.

I like to take inspiration from an eCommerce website when creating a hierarchy. These websites are often mammoths. I've worked on websites with over 25m pages, so to get all of those products and categories in a structured manner that users and Google understand is a big task.

Thankfully, agency websites are way easier, but you can adopt the same logic and hierarchy. Here's a typical eCommerce site structure for reference:

You can see the hierarchy and how the mass page (in this case, the products) all have a parent and sub-parent structure. For an agency, these 'product' pages should be your blogs. You will likely write hundreds of blogs to acquire SEO traffic and raise awareness of your services; therefore, they need a strong hierarchy like an eCommerce website.

This is what it would look like using the same example above.

And this is how I'd approach it for The Living House: who does interiors.

Essentially, you want to create a solid hierarchy, so you have individual 'hubs' across the website, avoiding the siloed approach of the initial example.

Benefits of this approach:

• The area of the website with the highest quantity of pages (e.g. blogs) all links to the category pages; these should be your commercial service pages. Now you have over 50% of your website internally linking to these highly valuable, commercial pages instead of just to the blog.

• There's no need for the generic blog category pages; you can merge these with your commercial pages. So your 'Shopify landing page' also has a feed of your Shopify blogs.

• Requires tagging of all blogs, which is good practice to get into to manage and audit your content

• Ensures content isn't lost; an evergreen blog you wrote five years ago is much more likely to be resurfaced and re-referenced in this 'hub' approach compared to one massive feed of all the blogs you've ever written.

I hope you found this interesting; SEO is the second-best channel for acquiring consistent inbound leads behind referrals and partners.

If you did find it interesting, I explain it in way more detail in my course, along with many other SEO tactics for an agency to use: https://learn.theagnc.co.uk/

Should agencies give knowledge away for free through content?

About 5 years ago, I'd have said yes without a doubt. These days, less so..

The general thinking is you give away your knowledge for free, and it drives leads to your business, and that’s how you make money on your content (particularly effective for agencies).

However, these days, I'm starting to second guess this way of thinking.

My initial ‘doubts’ came way back when Google introduced the featured snippets which gave direct answers to questions with little need to refer traffic.

While not a deal breaker it was a clear shift in the ‘exchange’ of knowledge for traffic.

AI has made this ‘exchange’ even more challenging. Models learn from the knowledge you give away and give 0 incentive or hook to visit your website or blog.

Publishers are scrambling to get deals with AI firms so they can actually get paid for providing content to help LLMs learn.

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Here’s some personal examples:
1) When NOVOS started, we had huge success by giving away free SEO eCommerce knowledge, which drove traffic, brand awareness and leads.

2) I’m doing the same approach now with The Living House: we give away free interior design tips and advice weekly. Our SEO traffic has over doubled in 6 months, and we’re at an all-time high in terms of leads and revenue.

3) However, for my personal blog, I’m now taking the approach of “freemium”.

What is ‘Freemium”

The model is popular in the Saas world and I believe you can apply the same model to content.

Over the weekend, I migrated from WordPress to Beehiiv, which gives me the option of selecting specific topics that are available through premium membership vs those that are free.

This has already allowed me to go way more in-depth for certain topics because I actually feel like I’m getting something (small at the moment) in return for this knowledge, whereas previously, I’d be holding back "secret sauce" ( 😂 ) for my agency courses and consultancy.

So as you will see the occasional deep dive content I provide will be gated for premium subscribers. A premium subscription costs less than a coffee and allows me to provide you with topic depth that was only available to my coaching clients.

Premium subscribers can also send topics to me which i will answer in future content, just like an advice column.

You can upgrade, support and influence future content here: https://theagnc.co.uk/upgrade

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My thinking is now going towards giving free content if the service you are offering is a specialised implementation channel.

For example, with agency coaching or consultancy, you can take the knowledge and directly implement the work; you don’t pay a coach to run your business; you pay for knowledge and insights (especially in the early stages).

Whereas with SEO and Interior Design, even if you get some insight and knowledge, it’s highly unlikely you’ll be able to implement it (properly) yourself.


What do you think about this as topic? is the ‘exchange’ of free content for traffic still a thing?


( p.s. i'm not talking about the engagement-led, click-baity summary content you see on social media. I mean actual in-depth knowledge sharing.)

Back in 2018, I helped Made.com (an interior design company) add an additional $13.1M in revenue AND nearly 1 million additional users.

All through SEO.

But we didn’t just tweak some links and randomly place keywords. When you do SEO the right way… it’s much more than that.

(And it becomes insanely profitable)

Here’s why SEO is much more than you think.

…

I joined Made.com in 2018 (in-house) to lead their SEO across international markets. The same time they were shining as a pure-play eCommerce growth story.

And even though they were already successful (40% YoY growth for 5 years)…

Their SEO was rapidly declining.

So after my two years working in-house, I helped launch NOVOS and brought Made.com on as one of our first clients.

Then in just 3 years…

We completely transformed their international SEO performance and achieved an incredible $13.1M in non-brand growth.

Today we use the SAME strategies as the foundation for all our eCommerce clients at NOVOS (which we’ve adapted over the years)

Our $13.1M Strategy

Here’s how we did it.

First we focused on onsite cleanup and improvements to site architecture. This helped maximize SEO performance through natural PR (public relations) activity.

Now we had our foundation.

Next for growth.

We then concentrated on activities such as optimizing navigation, categorization, keyword targeting, followed by off-site backlink generation for core SEO categories.

In the following year, we focused on the new React & Headless CMS platform (built from SEO initiatives). This freed us from the limitations of the previous Magento setup.

We also created a dedicated SEO content hub and offsite campaigns scalable across European markets.

And the results were outstanding.

• A non-brand SEO revenue growth of over $13.1M

• Nearly 1 million new users acquired

• Successful migration to a new CMA setup

• Top rankings in key furniture categories

Just check this out:

Remember:

Search engine optimization is a powerful tool for brand and revenue growth.

By learning how to leverage SEO the RIGHT way… you’ll set your agency up for massive growth in 2024 and beyond.

Hope this helps.

Cheers,

Sam

P.S. When you’re ready, here’s how I can help you:

• Discover how to build your agency to $1M and beyond - My three-stage course, Agency Architect, teaches you how to hit your first million dollars. I personally scaled a digital agency to $3.5M in only 3.5 years. Now I’m revealing all my secrets. Whether you’re thinking about starting an agency or have an existing one… go here to set your agency up for a million-dollar future.

• Get 1:1 mentoring to help develop your existing agency - It’s not cheap, but we’ll work together to solve any agency-related challenges you’re facing. I’ll share my proven strategies and insights (tailored to your specific situation) from my own experience in the agency world. You’ll also get access to my actual documents I use day-to-day as a current agency owner. Reply to this email “AGENCY” if interested.

After working in the SEO industry for 10 years, transitioning to the interior design industry may not seem like a natural move. However, that’s what happened to me in June 2023.

From a young age, I’ve always gravitated towards interiors. As a teenager in Wales, we’d shop at the local shopping complex. I always preferred going around the home stores with my mother than the sports shops with my father (even though I’m football-mad).

During the pandemic, we all did new hobbies or courses to keep us busy; mine was an interior design course. That helped to reaffirm that I’m neither an interior designer nor want to be.

Before I set up my agency, I worked in-house for MADE.com; at the time, this was a dream job for me. To do SEO for a well-respected (at the time) brand in the interior niche was what I wanted.

However, the entrepreneurial bug took me and set up NOVOS with my business partner. Fast forward 3.5 years, and we sold that business to the staff in an EOT model.

As part of the sale money, I wanted to use it to get into the interior design niche, but I needed to figure out how or what that would look like.

It wouldn’t be an eCommerce product, so it must be service-based. Yet, service-based typically lends itself to a traditional interior design company. Still, I wasn’t a fan of the perception traditional interior designers gave to the industry of high-end pretentious clientele only.

I had to find the intersection between my skill set, experience, and passion.

This concept or idea had lived in my notion notes for over 3 years; how would I get into the interior niche, and what would that look like?

When selling the business, my priority was to find a new home for my family as we were expecting our first baby.

Once we’d settled into our home, we needed to renovate it to make it our space. I’d sold the business at the time, so I had some cash to invest in an interior designer. Still, I wouldn’t do it for the perceived pretentiousness I mentioned previously. I felt they’d laugh me out the door if I wasn’t spending thousands of pounds on a redesign. This is when I thought there had to be another way and started researching alternatives.

That’s when I discovered virtual interior designers. A service that evolved and grew through the pandemic as the world got more accustomed to consuming services virtually.

I knew straight away this was it. It’s a service-based offering in the interior niche, and I would naturally lean more on Digital Marketing to grow (my background and skillset), so this offering ticked all three boxes for me:

• Service-based offering: I can help with my experience of scaling a 40-person service agency

• Operating in the interior design niche but accessible to everyone, not the pretentious traditional offering, so something that could be marketed to a semi-mass appeal

• Requires Digital Marketing to raise awareness of the service and acquire the leads vs competitors, which I had experienced across my 10-year career

So my approach was to research different firms in this space; any that resonated well with me, I’d use their services to see their different approaches and how passionate they were about their services and niche.

After using a few, The Living House was a clear leader, and I made an offer to invest, take a stake and then contribute time towards helping them grow.

My decision came down to:

• Their passion for the niche, not just the discipline they offered but more the level of service

• This aligns with my values and thoughts on the industry, e.g. pretentious traditional companies who don’t want to offer interior design to the everyday folk.

• How much could I help and support them? They already had naturally decent SEO, so it was a powerful platform to build on and grow; their SEO wasn’t starting from scratch.

• There are 3 founders, which I found appealing as there are more resources to leverage and maximize before looking to hire.

Once my offer was accepted, the legal process was quite painful. While we were eager to move forward and get things started, the lawyers were incredibly slow. They ignored the actual brief we provided and ended up having to redo the work, charging us for it. However, after approximately 6 weeks, we were able to finalize everything.

For those interested in investing in companies with existing income and founders, our approach involved having multiple share classes for each owner. My shares have lower voting rights, specific timeframes for dividend payouts, and a specific amount of ownership compared to the other three founders. This set up is sometimes referred to as ABC shares.

Fast forward to February 2024 and things are flying. Here are some of the key highlights:

• We moved one of the founders (Sophie) to a full-time marketing role to work with me on marketing and growth.

• Launched a YouTube channel with multiple videos over 1k views, one getting past 5k in under 6 months.

• Launched a new website to level up the brand and perception and streamline the user journey.

• Improved website user flow and implemented cleaner tracking.

• I brought AdWords in-house, which I restructured and relaunched, saving a £250 monthly fee for an agency which we can re-invest in media spending.

• Cleaned up the website, reducing the large number of unnecessary pages that Google was crawling.

• Implemented a PR and link-building strategy, acquiring multiple high-tier, relevant publications, including Ideal Home, Home and Garden and Women and Home.

• Refined the proposition and offering towards ICP of families

• implemented content strategy with new SEO-led blogs going live weekly

The results?

• Over 250% increase in new monthly visitors year on year

• Average of over 125% revenue growth year on year for the last 3 months consistently

Below, you can see the trend of SEO growth since June, which has hit new heights in 2024

What’s next?

• Levelling up Pinterest with a consultant and training

• Explore more aggressive advertising now the website is live

• Expand the Adwords account with a consultant now the new website is live

• Continue with what’s working on SEO and YouTube

• Constant testing and iterations to grow YouTube’s reach

Follow along if you want to hear more about our journey

“Who makes the best referrer?” To help you get the best answer here, I like to think of where your service offering sits within the hierarchy of an in-house business (ie a brand or a non-agency) this way it can give you a strategic approach to sourcing partners and having higher value conversations.

To get started with this, visualise where your service sits within the hierarchy of your clients business. 

I would then double and treble the size of your client – do you still sit in the same position or have you shifted? These are important questions to ask and consider so you can position your service offering across the full life cycle of your clients growth. It will also help you to understand if your target persona shifts as your client grows.

Below is an example of what this could look like:

Top-Top-down referrals

The best sources for lead referrals are other agencies or consultants positioned above your service offering in the hierarchy.

For example, with NOVOS, a CMO consultant, fractional CMO, or head of eCommerce role would be ideal as SEO sits under the marketing department.

These consultants or agencies can provide powerful lead referrals because part of their role often involves revamping entire departments. As a result, they seek third-party opinions and expertise. When these consultants are brought in, businesses generally follow their recommendations, as not doing so would defeat the purpose of investing in them.

Another advantage of these roles is that they often report directly to the CEO in small to medium-sized enterprises (SMEs).

In recent years, the popularity of fractional C-level roles has increased. These roles are similar to contractor positions, where individuals are brought in to turn around underperforming departments or improve current operations. Typically, these individuals work with 3-4 clients at a time and stay for 6-12 months before moving on. For agencies, these roles present an excellent source of leads and introductions.

The top-down approach could include broader agencies too; they may have a big client requiring additional resources that their in-house team can not provide. However, be careful with this approach if you position your agency as value-led and a ‘thinker’ for your clients. This set-up won’t get the best out of your business as the broader agency will always want to be the middle-person or be heavily involved in defining the strategy and just want you to fill a resource gap. I talk more about this and the different positioning options for agencies in my course.

Horizontal referrals

These service providers are ranked second on the list in terms of referral lead quality. They perform well, but not as well as those mentioned above. They are part of the same team as you if you work in-house or for a brand.

For instance, NOVOS provides SEO services and would be in the marketing team along with agencies that offer services like Adwords, Paid Social, Affiliates, etc. Typically, these agencies send us one lead per year. If you have multiple referral agreements in place, you can potentially receive a handful of leads each year or even more.

However, these referrals are the ones that work best as actual partnerships because you operate at the same level and can complement each other well, as opposed to the top-down approach, which is often one-way and transactional. These referrals or partnerships are great for content collaborations.

Within this bucket you can also include cross department leads at the same level.

Bottom-up referrals

In my experience, I have found that these roles are not particularly fruitful. In the SEO world, these roles include copywriters, freelance SEO specialists, designers, and even web developers. Since they sometimes report to the SEO team, either directly or indirectly, I have noticed that the leads they bring in are often of lower quality or have lower budgets when taking a bottom-up approach.

Client referrals

Finally, one route agency owners often overlook is utilising their clients. Clients can become advocates for your agency and promote your services within their network. In my experience with different companies, I have successfully established referral agreements with certain clients. This creates a robust scenario where satisfied clients advocate for your services to potential leads or their network. Once you have a happy client who has benefited from your services, once they’ve provided a case study, offer them a referral kickback if they can refer you to their network. I have never had a client turn down this option in the past.

Understanding the hierarchy of your clients’ business is crucial for effective referrals. Top-down referrals from consultants or agencies positioned above your service offering can be powerful, while horizontal referrals from agencies or service providers within the same team can also be beneficial. Bottom-up referrals from roles like copywriters or freelance specialists may not yield high-quality leads. Additionally, leveraging client referrals can be a valuable strategy. By considering these referral sources and positioning your service strategically, you can maximise lead generation.

If you would like to learn more about sourcing, nurturing, and elevating your agency partnerships, please refer to my course available here https://theagnc.co.uk/c/agency-architect-course

Like many others, I began my agency journey as a side hustle while working in-house for a brand. I had a business partner, and the side hustle had reached a point where it was earning slightly over £10k per month. We had 6-7 clients consistently for 3 months.

During this period, I’ll never forget the excitement of taking half a day off from my regular job and meeting my business partner at The Hoxton near Old Street. We would work flat out on our side hustle for the rest of the day, yet there was still so much more to do. At that moment, I realised that our side hustle had transformed into a business that could sustain us working full-time.

At this point, I was ready to quit my job. However, I was finalising a mortgage application and needed the full-time salary if the application and flat fell through. I had already drafted my resignation letter in emails for over 2 months. When I received the keys to my flat, which fit the lock, I hit send on my resignation email.

Then came a painful 3-month “notice period” where my mind was focused on my business, but I had to show up for work every day to complete my notice period and assist in hiring my replacement.

During the Christmas period, my wife and I travelled to Thailand. During this time, I wrote up essential SOPs, our vision, and values on how our agency could compete. The origins of this document are still shared with staff members today when they join us, albeit in a slightly more jazzy presentation deck format now.

This took me to January 4th, 2019, my first day working full-time at my agency. However, I quickly realised that it wasn’t an ‘agency’. It was more like two people working together and freelancing together. After about 4 hours of work, something felt off. The joy I once felt from my days at The Hoxton was no longer there. I began envisioning what the future held for me in the next three days, months, and years. I didn’t like what I saw. Not one bit.

Four days later, I decided that this solo freelancing gig wasn’t for me. We needed to scale it, and we needed to do it quickly.

Fast forward 3.5 years, and we sold the business to the staff in a unique EOT model. This business was now 40 people and closing on £3m revenue.

It was the best decision we’d ever made.

But I can promise you it’s not for everyone.

If I’d stayed as a solo freelancer, I would have probably made more money in the short term, but I knew within the first week freelancing wasn’t for me.

There’s nothing wrong with this, and there’s nothing wrong with the alternative, either.

There’s no right or wrong decision as long as you are happy doing what you are doing daily, and it brings you joy.

Discussions around ‘right or wrong’ are only relevant if you don’t dedicate time to learning and understanding if scaling to an agency model is the right decision for you. If you make the wrong decision, you become miserable and stressed. This then translates to your staff and your culture, resulting in poor work, which makes you sad and stressed in a vicious circle.

In the first stage of my course, I address this scenario by delving into “understanding an agency model”. This allows solo freelancers to better understand what they can expect when it comes to scaling and helps them determine if it’s the right path.

I have also attempted to do a similar scenario based on my thinking from back in 2019, which matches what I know now as an owner of multiple agencies.

The lefthand side outlines ten pain points you will experience as a solopreneur. The righthand side shows how the agency model then solves these pain points.

Limited Capacity for Projects

As a solo freelancer, there’s a cap on how much work one can handle. This limitation can be addressed by an agency model, which allows managing multiple projects simultaneously by delegating tasks to team members.

The way I think about this is that you’re ambitious enough to get to a point where you no longer work for someone else, and you’ve made a living on your own. That alone is impressive.

If you get to a point where you have to turn away work, you are clearly doing well and in demand.

So my question to you would be: Why limit your ambitions? & why leave money on the table? If people want to pay you for your expertise, you must take advantage of that. The above statement reflects an optimistic way of thinking.

However, if fear motivates you, it is essential to recognise that in our fast-moving world, the methods and practices of your discipline may become obsolete within a few years. Therefore, it is necessary to capitalise on your skills and adapt as quickly as possible.

Income Inconsistency

Freelancers often experience fluctuating income due to the project-based nature of their work. An agency can provide a more stable income through a diversified client base and ongoing contracts.

Based on my experience, clients were hesitant to sign long-term contracts when it was just me and my business partner. The majority of our clients opted for monthly rolling contracts.

However, once we hired just two staff members, we had a conversation with all our clients. We explained that we now had fixed costs to cover and needed a level of commitment and stable income. Fortunately, they all understood the situation as they were business owners themselves and agreed to sign a 3- or 2-month rolling contract with us.

Over time, the larger the team gets, the longer the contracts you require need to be. Now, when we discuss leads with clients, we’ll be going in with 12-month options only, and some will negotiate us down to a 6-month.

Another point to consider is you will likely earn more money as a solo freelancer in the short term. As you scale an agency model, you must reinvest your profits into growth. Only after stabilising will you be able to generate a strong income for yourself. Alternatively, you may choose to sell the agency, potentially earning a significant amount more. I discuss these options and scenarios in my course.

Expertise Limitations:

Solo freelancers might be highly skilled in one area but may lack expertise in others. An agency can offer a broader range of services by employing specialists in different fields.

Using my experience as a reference point, a prime example of this in the realm of SEO is link building. SEO, broadly speaking, is divided into three skill sets: Technical, Content, and Links. I excelled in the technical and content aspects, with a particular focus on strategy.

I have overseen a team of SEOs throughout my career, including someone skilled in link building. It is an entirely different skill set compared to traditional SEO.

However, when my business partner and I were freelancing individually, we didn’t have the skillset to build links, so we did not offer it as a service. Fast forward to today, and we now have a 12-person Digital PR link-building team, generating over £1.2m annually.

As I mentioned before, the day-to-day management of SEO had lost its appeal to me. While I still recognised the value of the channel and loved the concept of SEO, I was no longer interested in the daily tasks. Transitioning to an agency model has allowed me to learn and acquire a diverse range of skills and experience in various business areas, including finance, HR, legal, operations, sales, and marketing. This has opened up a new career path for me, involving coaching agencies, investing in them, and focusing on agency work’s non-disciplined aspects.

Work-Life Balance Issues:

The burden of managing all aspects of the business can lead to work-life balance challenges for solo freelancers. In an agency setting, tasks like marketing, client communication, and administrative work can be distributed among team members or outsourced.

This topic is controversial, and only now, after nearly five years and 40 team members, am I in a position to get a solid work-life balance.

You need to build and scale your agency correctly; we 100% did, at the 2-year stage, it was probably in a good place for us to step back. However, this was when COVID hit, so there was way too much uncertainty worldwide for us to take a step back.

As an agency owner, you can only achieve proper work-life balance (if it even exists, which is a topic in itself!) if you consciously build your agency to be a lifestyle business or once it reaches a size of around ten people. At the 10-person stage, there are enough individuals to form a hierarchy, which means you will only need one or two people reporting directly to you.

The main difference is that, with an agency model, there is an option to step away eventually. However, as a solopreneur, you are essentially selling your own time, so there is no easy way out as the agency model provides. The only alternative would be to outsource all tasks to freelancers, which comes with risks.

Client Acquisition and Retention

Solo freelancers might need help with marketing and client retention. An agency typically has more resources and personnel dedicated to marketing and client relationship management.

This is another scenario for freelancers. If you want to maximise your income, it means fully utilising your available time at the highest rate. However, you must be careful not to bill too high, which can put you in the agency bill rates zone. Clients then have the alternative of hiring a team for the same cost as just one freelancer.

By maximising your time, you may have limited time to dedicate to effective marketing. While it’s easy to do a tweet or a social post once a week and check it off your Asana to-do list and get a unicorn shooting across your screen (if they still have that feature?!), doing impactful marketing that stands out and brings in B2B clients requires consistent dedication to a strong strategy across multiple platforms.

In my course, I recommend that agencies hire an in-house marketing role at the start-up stage when their team reaches five people. This will allow the owner to free up enough time to support the full-time marketing hire. Effective marketing requires continuous time and resources.

As a freelancer, it’s common to rely on word-of-mouth referrals heavily. However, if you become fully booked through natural referrals, the referrer may start looking for another freelancer (your direct competitor) and may not come back to you in the future.

Scalability and Growth Limitations:

There needs to be a limit to how much a solo freelancer can grow their business. An agency model allows for scalable growth by adding more staff and resources as the business expands.

I mentioned two points related to this in the previous sections. As a freelancer, you cannot continually raise your day rates, as it would push you into a pricing range where clients may choose to hire in-house or use an agency with a team of 2-5 people.

Therefore, you are limited both in terms of price and time.

The agency model overcomes this limitation. You can hire additional staff members to increase the agency’s output when you reach maximum capacity.

Furthermore, as you consistently deliver good work, you can gradually increase your retainers and negotiate longer-term contracts.

To truly achieve scale in the freelancing and solopreneur world, you should focus on the approach taken by Justin Welsh. This involves diversifying your income through courses, sponsorships, and templates. However, it is worth noting that most successful solopreneurs earn income through consultancy or group course sessions. They often have a large following, allowing them to sell a course to 10,000 people for £50. Unfortunately, this level of success is not easily attainable for most freelancers, especially considering the time constraints mentioned in the previous section. Scaling marketing and social media to such heights requires significant time and resources.

Risk Management:

Freelancers face high risks if they cannot work due to illness or other reasons. An agency has a team that can continue operations, reducing the risk of income loss.

I have experienced this when working with freelancers for The agnc or my agencies. A freelancer often would commit to delivering work on time and meeting expectations, but I’ve had countless experiences of illness or delays due to over-capacity and poor planning.

Illness is an unfortunate reality of life, but in business, having a contingency plan or backup is crucial. However, most freelancers cannot have such measures in place because their business relies solely on them. As a result, their reputation suffers.

Professional Isolation:

Freelancing can sometimes be isolating. Being part of an agency creates a team environment, offering more opportunities for collaboration and professional networking.

There’s nothing better than celebrating the highs with your team. Winning an industry award or delivering a big project to a client you’ve worked on for months.

Freelancer or solopreneur route: once you deliver the work you celebrate internally, you may treat yourself, but you will return to the next project straight back on the hamster wheel. Over time, this can seriously impact your motivation and drive.

Administrative Overload:

Solo freelancers often spend significant time on administrative tasks. An agency can have dedicated administrative support, allowing creative professionals to focus more on their expertise.

It is possible to use a virtual assistant to an extent, but on the agency side, you build an operations team or invest in automation to reduce the admin workload on the founder.

As a freelancer, the time spent on admin could be spent working on client work and earning more income.

Lower quality Clients

Finally, and potentially the most controversial point on the list, is the quality of your clients. As a freelancer, you often work with clients and projects that either agencies don’t want to work with or that the clients themselves can’t afford an agency.

A similar scenario can be applied to agencies; they only serve clients until the clients are ready to bring the services in-house. At that point, it becomes your job to position your services around the in-house team they create. Even if the clients get your services in-house, the in-house team may still require a minor part of your service, typically one-off projects, a strategy review or set deliverables.

When you first start out, whether freelancing or as a small agency, you naturally work with small businesses. These small business owners can be challenging to work with at times, as they often expect a lot while paying very little and can be erratic. However, you can work with larger businesses and brands as you scale your agency and become more successful.

When we started our agency, I always found small business owners challenging to work with. They had a mentality that their hard-earned money was leaving their pocket and going into ours, so they constantly wanted to know what was going on and what they were getting in return and always wanted more. In contrast, larger businesses work with budgets set by a finance department and tend to focus more on hard metrics. They are less personally, emotionally and financially invested compared to a founder.

So, the reality for freelancers is that you are highly likely to work with clients at the bottom of the food chain. Even if you do an excellent job, the client will eventually want more, whether it’s more resources or a larger team you can’t provide. This is where an agency comes into play. Instead of resisting the idea, consider making that agency your own agency.

Building an agency is a challenging task. On a personal level, you will likely take less money out of the business as you reinvest profits into growth. The plan eventually will be to own an asset that far exceeds any freelancer.

Once built, you have two options: you can either turn this asset into a lifestyle business, where you can step back while still earning an income, or you can sell it for a large sum of money.

The way I saw it, as a solopreneur, I already had over 10 impressive case studies that showcased my expertise in my discipline (SEO). The next challenge was to train a group of individuals in my approach to SEO and enable them to develop their own case studies. I was responsible for selling this successful work and building a much larger business. This is the challenge of the agency model. It isn’t easy because you are now transferring your thinking and way of working to others. It requires a broader skillset and mindset than being a solo freelancer, but my god, it’s rewarding when it succeeds!

Negotiating and securing a beneficial partnership agreement requires careful consideration and strategic planning. From my experience, rushing into a referral agreement often leads to consequences later on. While relationships and partnerships are built on trust, it is important to document agreements, especially when it involves business and money. This ensures that both parties are aligned and minimizes potential issues in the future.

• Understand Mutual Needs & Resource: Thoroughly understand the needs and objectives of both parties to align goals and create a mutually beneficial partnership. Start by considering what you hope to achieve from this agreement. Once you have your answer, ask the other party the same question. While it may seem obvious that both parties want leads and new business, in my experience, these two things can be quite different. One party may have expectations of launching joint social and content campaigns, along with a larger event and additional marketing activities. The other party may simply expect to receive warm leads via email. In the end, both parties aim to generate leads that can eventually turn into new business. However, one approach requires a significant amount of resources and commitment, which may not be feasible or desirable for many founders.

• Clear Terms and Expectations: To avoid misunderstandings and conflicts, it is important to clearly define terms, roles, and expectations. It is similar to the point I mentioned earlier, but it is always advisable to document these details for future reference. Agency owners are often busy and can easily forget or confuse conversations. If they send you a lead after 3 months and say “we agreed on 20%”, but you remember it as 10%, it can lead to awkward discussions and potentially damage the relationship for future leads. So even if you have an email you can re-reference that says “we agree 10% for the first 3 months of the agreement” that will help massively with cleaning up conversations like this. From my experience, this always happens, and it’s not due to bad intentions. As I mentioned, it’s simply because people are busy and may have mixed up agreements they had with another partner.

• Flexibility: It is crucial to be open-minded and adaptable in negotiations. Being willing to adjust terms and find compromises can lead to a win-win outcome. When entering into negotiations, it is recommended to start with terms that are slightly more favorable than what you actually want. This allows room for negotiation and the possibility of reaching a mutually beneficial agreement. It is important to be prepared for the possibility of being knocked down in your initial offer, but maintaining flexibility ensures that you can still work towards a favorable outcome.

Ultimately remember you are trying to help each other, relationships are based on trust not a legal contract. All of these points are just to help cover yourself and help you, you may never need to revisit them again. Effective negotiation involves understanding needs, setting clear terms, and being flexible to ensure a mutually beneficial partnership. By employing these strategies, you can maximize the potential of your partnership and achieve desired outcomes.

If you would like to learn more about sourcing, nurturing, and elevating your agency partnerships, please refer to my guide available here. > https://learn.theagnc.co.uk/partnerships

Partnerships in the agency world come with their own set of risks and rewards that need to be carefully considered. By understanding these risks and rewards, individuals and organisations can make more informed decisions when it comes to engaging in agency partnerships.

What are the Risks of an agency partnership?

One of the risks associated with agency partnerships is the potential misalignment of goals between the partners involved. It is essential for both parties to have a clear understanding of their objectives and ensure that they are aligned. If the goals of the partners are not in sync, it can lead to misunderstandings and ultimately the downfall of the partnership. This misalignment can occur due to differences in strategic priorities, target markets, or even cultural values. Therefore, it is crucial to have open and honest communication to ensure that all parties are on the same page and working towards a common goal.

Based on my personal experiences, I had conversations with some early referral partners. One of them was initially very aligned with my goals. We were both niche agencies that complemented each other, and we spent several enjoyable evenings discussing the challenges and successes of our respective agencies over beers. However, within 12 months, he started talking about transitioning into a full-service agency and claiming that niche agencies cannot survive. While this alone may not have been enough to end our relationship, his approach was a major factor. Our discussions became very one-sided and he dominated the conversation, which ultimately made me uncomfortable. Gradually, I decided to distance myself from him, fortunately without having engaged in any content sharing or publicly promoting ourselves as “partner” agencies. This is why I emphasise the importance of prioritising referrals first, which I discuss further in my white-paper below.

Another risk to be aware of when entering into an agency partnership is the possibility of becoming too reliant on the partner. While partnerships are meant to leverage each other’s strengths and resources, relying too heavily on a partner for resources or expertise can put your own business at risk if the partner is unable to deliver or if the partnership ends unexpectedly. It is important to maintain a level of independence and have contingency plans in place to mitigate the potential negative impacts of dependency risks.This situation occurred in my agency during its early stages. We were fortunate to have an amazing partner who provided us with significant support. However, relying solely on this partner for leads posed a significant risk from a purely business standpoint. Therefore, it was necessary to diversify our partners and, more importantly, expand our marketing and sales efforts. As a result, this partner now contributes to only 10% of our leads, compared to the previous 40-50% during a short period of time. I outline in the guide below how to approach this so you don’t burn bridges and allow yourself to build up multiple non-competing partners.

What are the Rewards of an agency partnership?

One of the key rewards of agency partnerships is the opportunity to share resources. By partnering with another agency, you gain access to their pool of resources, which can include anything from equipment and facilities to talent and expertise. This collaboration can help both parties to achieve their goals more effectively and efficiently. For example, a digital marketing agency partnering with a web development agency can combine their resources to offer comprehensive digital solutions to their clients. By sharing resources, they can deliver high-quality services that neither agency could provide individually.

From my experience, this benefit always seems like a dream on paper. However, in practice, it never turns out to be as good as it initially appeared. That being said, I have heard that it works well for output-led agencies such as writers, designers, or developers, in comparison to strategy, performance, and ROI-driven agencies like marketing. In these types of agencies, where every dollar is up for grabs and proving the value of your channel can clash with your partner, this benefit may not be as effective.

Another significant reward of agency partnerships is the ability to broaden your service portfolio. By partnering with another agency, you can leverage their expertise and capabilities to offer a wider range of services to your clients. This not only enhances your value proposition but also allows you to better meet the diverse needs and demands of your clients. For example, a public relations agency partnering with a social media management agency can offer integrated PR and social media campaigns, providing clients with a comprehensive and cohesive marketing strategy.

I have found this to be particularly valuable in the pitching process. On numerous occasions, our referral partners have received requests for proposals (RFPs) that require an agency to provide four different services. While our partner can offer three of these services, they do not specialize in SEO. Rather than pretending to offer SEO services, our partner chooses to be honest and suggests working with NOVOS for this aspect. The client is usually satisfied with this arrangement as they appreciate having a specialist dedicated to their account. This approach also helps to establish trust right from the beginning.

In conclusion, when considering agency partnerships, it is crucial to carefully weigh the risks against the rewards. It is essential to find a balance between the potential benefits and the potential pitfalls. By doing so, you can increase the likelihood of a successful and mutually beneficial partnership that aligns with your strategic objectives.

Partnerships in the agency business can offer numerous advantages, such as resource sharing and enhanced service offerings. However, it is important to be aware of the potential risks, including misaligned goals and dependency risks. By conducting thorough due diligence, establishing clear communication channels, and setting realistic expectations, agencies can navigate these risks and maximize the rewards of partnership. Ultimately, a successful partnership is built on trust, mutual respect, and a shared vision for growth and success.

As the agency landscape continues to evolve, strategic partnerships will play an increasingly vital role in shaping the industry. By leveraging the strengths and expertise of partners, agencies can expand their reach, drive innovation, and strengthen their market position. However, it is important to approach partnerships with caution and carefully evaluate the potential risks and rewards. A balanced view is essential to ensure that the partnership is mutually beneficial and aligned with the long-term goals of all parties involved.

In summary, agency partnerships can be a powerful tool for growth and success, but they require careful consideration and strategic planning. By understanding the risks and rewards, agencies can make informed decisions and forge partnerships that propel them towards their goals. It’s about finding the right balance and ensuring that the partnership is built on a solid foundation of trust, shared values, and a shared vision for the future.

With proper planning, communication, and a commitment to collaboration, agency partnerships can be a game-changer, providing agencies with the resources, expertise, and opportunities they need to thrive in today’s competitive business landscape. So, take the time to evaluate your goals, assess potential partners, and embark on a partnership journey that can transform your agency’s trajectory and position it for long-term success.

Remember, a successful partnership is not just about the rewards; it’s about finding the right balance and strategic alignment to mitigate the risks and maximize the benefits. So, embrace the power of agency partnerships, but proceed with caution and make informed decisions that align with your agency’s unique needs and objectives.

If you want to understand more about partnerships and how to build a successful referral network you should check out my partnership guide available here: https://learn.theagnc.co.uk/partnerships 

Managing finances effectively is critical for the success and sustainability of any agency. A staggering 44% of small businesses fail because they run out of cash, underscoring the vital importance of cash flow management for business survival and growth.

An agency model is naturally cash-rich from the start. Unlike SAAS or eCommerce brands, it doesn’t require upfront investment to generate income. Therefore, by managing your finances wisely, you can accumulate a substantial amount of cash in your bank account. This cash can provide peace of mind when scaling your agency or be reinvested to fuel its growth.

As a general rule, it is recommended to have enough cash in the bank to cover at least 3-4 months’ worth of expenses. This ensures that you are prepared for late payments, bad debt, and unexpected circumstances such as COVID, Brexit, or recessions (I have successfully navigated my agency through all 3 of these!).

Here are five tailored tips for agencies to efficiently manage their finances, ensuring a steady cash flow and long-term financial stability​

1. Prompt Invoicing for Projects: A key financial management strategy for agencies is to invoice as soon as a project begins. It’s common for service-based agencies, especially in B2B, to invoice upon completion of work. However, this can lead to significant delays in payment. For instance, if a project takes 30 days to complete with an additional 30-day payment term, the agency might not receive payment for over 60 days. Invoicing at the project’s commencement ensures an earlier start to the cash inflow process, aiding in maintaining a healthier cash flow.

2. Instalment Payments for Services: Agencies should consider negotiating instalment payments for their services. While not always possible, when suppliers agree, it can be highly beneficial. For example, splitting a large service fee into smaller, monthly payments can ease the financial burden and assist in managing the agency’s cash flow more effectively. If you get an invoice for £3k as the provider if you can pay in 3 instalments of £1k instead.

3. Selecting the Right Bank: For newly established agencies, online-only banks such as Starling, Tide, and Monzo offer quick account setup, typically within a week. This is in contrast to the months it might take with traditional banks. However, as an agency grows, it may encounter limitations with these accounts in terms of third-party integrations and advanced banking needs. Transitioning to a traditional bank account may become necessary to accommodate the agency’s evolving financial requirements.

To provide some examples from my experience, when we initially started NOVOS, we attempted to use Metro.

In 2022, I detailed the evolution of the roles my co-founder and I assumed during our company’s start-up years. I outlined five stages from day 1 of running the business to a 40+ person agency. You can read about it here.

I ended that post with this sentence:

“We’re confident that stage five is the final stage of our role split – but you never know. We’re both excited to see where the business takes us next!”

… Well, I can tell you now….

…it was not the final stage….

Stage 5 was probably the worst iteration of our roles to date, which naturally had a significant impact on the business as a whole.

Below is a short snapshot of what stage 5 involves; for more details, read the original post linked above, then come back here.

• Me as a CSO focusing on strategy

• My business partner (Antonio) as COO focusing on operations

• The above was stage 4, and then we adapted this to stage 5, which was led by Traction or Rocketfuel’s concept of a Visionary and Integrator (also referred to as the Entrepreneurial Operating System or EOS).

• We referred to it as “Strategy + Implementation”, but it follows the same principle.

• This principle is that one person defines the vision, strategy and plan of where the business will go.

• The other person takes this plan and executes getting shit done.

On paper, the concept of visionary and integrator sounds like a dream and complements our skillsets well. I love long-term planning, strategy and ideas. My business partner is much more short-term and focuses on getting stuff done and moving on, which aligns perfectly with the integrator role.

I naturally moved to a more external role focusing on sales, marketing and partnerships. My business partner is more internal.

However, the roles didn’t work in reality. More tasks arise internally on a day-to-day basis than just completing work. There is a significant amount of interpersonal dynamics and problem-solving involved. Initially, Antonio found this enjoyable, but over time, it became less interesting and stimulating enough for him to continue as a full-time job.

I had a similar experience on the sales side. I enjoyed it initially, but it demands a lot of short-term focus. Once again, I found it less stimulating and enjoyable to pursue as a full-time job.

I came down to what we found interesting, enjoyable and stimulating daily.

In short, we were in the wrong roles. We knew it deep down, and it showed around 8/9 months into the year.

We eventually pivoted more towards a new set-up. So, seeing as this is a follow-up from the previous post, we can call this stage 6.

Stage 6: The Maturity stage

I’ve called it this for two main reasons:

1. The business had moved through the rapid growth stage of 40 hires in under three years, meaning we had a more settled team with a strong hierarchy of directors, heads of and managers.

2. As people and business owners, we are way more experienced and aware of what we like and don’t like. More importantly, what we contribute the most value towards (you could argue these are correlated!).

As part of this switch, I took on the Managing Director role, and Antonio took on the Head of Growth role.

We decided to remove the C-level as having a C-level for a small business didn’t feel right. It also meant an additional level of progression from a Director to the C-level, but for a company our size, there was no real difference between them.

As a result, we now had four directors:

• Antonio as Growth Director

• Olivia, as Operations Director

• Me as Managing Director

• Dan, as Delivery Director

We are ticking off the core components of a simplified agency structure (I’ll explain this more in a future post).

Antonio’s day-to-day covers what you’d expect from a typical growth/business development role; a few examples would include:

• Closing inbound leads

• Managing and executing marketing strategy

• Managing marketing investment

• Co-ordinating internal resources around sales and marketing efforts

• Outbound sales efforts / inviting to events

• Networking and events

• Partnerships

In terms of my role, one of the main priorities is to align each of the three components to prevent any breakdowns, such as sales delivering something that the delivery team no longer offers or operations using outdated reporting templates for the delivery team.

The lack of a clear definition surrounding the responsibilities of a managing director prompted me to write this blog, which outlines the three core responsibilities of an agency managing director in considerable depth.

From an individual perspective:

In truth, we knew that these roles outlined in stage 6 were where we belonged. However, we both needed to experience the alternative to realise it wasn’t suitable for us. We needed to scratch that itch and rule it out for the rest of our careers.

What was the impact on the business of this?

The impact on the business would be significant, although intangible. The influence an individual has on the importance of structure and work practices may not be fully realised until a change is made. The overall approach to work can vary depending on the individual and the perspective and industry knowledge of the director or team lead, shaping their work and how their team operates. Therefore, changing roles has a ripple effect on the entire business, introducing uncertainty, disrupting continuity, and bringing about unnecessary changes. Changing founder roles has an impact across the whole industry.

As a result, I’ll be using the same conclusion to this post as I did to the one written in 2022:

“We’re confident that stage five six is the final stage of our role split – but you never know. We’re both excited to see where the business takes us next!”

If you are planning to sell your business or want to increase its value, it is crucial to understand the optimal timing and strategies to maximise your value and how much you will get for the sale. Equally, even if you are not ready to sell, knowing what aspects to focus on to enhance your business’s appeal is equally important. If you are unsure of your route, you should read my other post on lifestyle vs performance agencies.

Navigating the mergers and acquisitions (M&A) landscape can be a complex journey for many agency owners. It requires expertise in finance, legal matters, and business strategy. As an expert in your field, owning your agency, you are not expected to have industry-leading knowledge within the M&A market. However, having a fundamental understanding of the attributes that make an agency attractive to buyers empowers your decision-making and instils confidence as you progress towards a potential business exit.

First, you need to know what EBITDA is, as the end figure you receive for selling your agency is based on a multiplier of your EBITDA.

What is EPITDA & how does it work for agencies?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure used to evaluate a company’s operating performance without considering financing decisions, accounting decisions, or tax environments. Essentially, EBITDA provides a clearer picture of a company’s operational efficiency by focusing on the earnings from its core business activities.

Here’s a simple example of how EBITDA might work for an agency:

Suppose you have a marketing agency. Let’s look at its financials for a particular year:

• Revenue (from client projects, consulting fees, etc.): £2,000,000

• Cost of Services (salaries, freelancers and software for delivery of your service): £1,000,000

• General & Administrative Expenses (rent, utilities, insurance, marketing costs): £200,000

Now, let’s calculate the EBITDA:

1. Start with the agency’s Revenue: £2,000,000

2. Subtract the Cost of Services and General & Administrative Expenses:

   1. Revenue: £2,000,000

   2. Cost of Services: -£1,000,000

   3. G&A Expenses: -£200,000

3. This gives you an Operating Profit (or EBIT, Earnings Before Interest and Taxes) of £800,000

To get EBITDA, you add back Depreciation and Amortization (if there are any). For simplicity, let’s say your agency has an estimated 1% of revenue for depreciation and amortisation expenses, totalling £40k.

So, the EBITDA for your agency would be:

• EBIT (Operating Profit): £800,000

• Add back Depreciation and Amortization: £40,000

• EBITDA: £840,000

In this example, the EBITDA of £840,000 represents the earnings of your agency before any interest, taxes, depreciation, and amortisation. This number helps potential buyers or investors understand how much profit your agency makes from its operational activities, which is a good indicator of its financial health and operational efficiency. EBITDA is typically always larger than net profit, with tax often causing the big divide. The above is just for illustrative purposes; a typical £2m agency would have a much lower profit than the above example.

If you are struggling with this, don’t worry too much. You need to be aware of this metric and ask your accountant to include it in any reports, like your P&L / management accounts. Now we’ve discussed EBITDA, it’s time to talk about multipliers.

Multipliers vary by industry; it’s an attempt to give a numerical figure to the perceived value of your agency. This value is based mainly on how scalable your business is, the risk factors involved, the growth potential and how much the seller fits the overall vision and structure of the buying company. This multiplier can be influenced through higher performance or strategic positioning, as I’ll cover below, but these multipliers will always be limited based on your business model.

For example, technology and SAAS companies often command some of the highest multipliers due to their scalability, potential for rapid growth and high profit-to-head ratios. These ranges vary drastically, and specific cases aren’t given out as public knowledge. Speaking from experience within the agency space, specifically in digital, the multipliers range from 4x up to 8x. Again, these vary so much based on market trends, new technology and perception of the buying company. To give a basic example, the first SEO agency to prove the model works and can scale to multimillions of pounds would have had a larger multiplier than today as new IP knowledge would have had higher demand.

Based on the above information, you do some quick calculations to show how influential the multiplier figure will be on your overall sale value.

• £840k EPITDA 4x multiplier = £3,360,000 sale

• £840k EPITDA 5x multiplier = £4,200,000 sale

• £840k EPITDA 6x multiplier = £5,040,000 sale

For every increase in multiplier, you are adding an extra year’s worth of business performance to your overall sale value.

How can you influence your multiplier?

Here are several crucial factors that typically influence an agency’s sellability, with a focus on what potential buyers seek:

EBITDA  

As mentioned above, the attractiveness of your business in the M&A market is heavily influenced by your EBITDA. EBITDAs from £500k-£1m would be the sweet spot for starting discussions. You will want to prove to the buyer that there’s more to come, so timing is essential to avoid selling right at the peak. This may sound odd as you’d think you’d want to sell right at the peak; however, the most common scenario with an agency buyout is for the money to be paid out over multiple years (the earn-out period), the majority of the money is then paid out over time as an incentive for the founder to continue growth and ensure a smooth transition. Therefore, you need to have the mentality that when you sell, you still need to keep the momentum going for another 3-4 years after the sale.

Market Position and Specialisation 

I preach about niche agencies, which are more valuable in the agency M&A world. Why? Because the buyers are often full-service or broad-serviced agencies. They want to buy niche agencies that will complement their existing services so that they can cross-sell efficiently to existing clients. They want agencies with a depth of knowledge and reputation for a specific service they don’t have. This is where ‘perception’ comes into this process and why finding the right buyer is essential.

• Two agencies are on the market looking to purchase

  • Agency 1 is an eCommerce agency that offers strategy and all paid channels.

  • Agency 2 is a marketing agency that offers SEO, Paid Search and Affiliates.

• Agency 1 will likely give a much higher multiplier (and therefore value) to my eCommerce SEO agency as we are so specialised we can slot right into their overall service offering. Agency 2 may still find it valuable to broaden its eCommerce knowledge in its existing SEO team, but it’s unlikely it would match Agency 1’s multiplier.

Overall Profitability 

The profitability of your business, mainly when it represents a high net profit percentage. If you’ve scaled an agency with over 20/30 staff members and still command net profit margins of over 20%, you’ve proven a successful model that buyers will admire. They will be able to increase the profits by bringing your agency under their group and getting you to operate on their systems, which is already a cost to the group.

In contrast, exceedingly high profits might be scrutinised for potential under-investment in the business. It wouldn’t be a deal breaker but expect more intense questioning about why you didn’t invest more to build and scale the business.

When scaling and investing in growth, your net profit margins can sink as low as 10%, some months lower, as you constantly reinvest in development. Once stabilising, you should aim for the 20-25% levels.

Consistent Revenue Streams 

Though not always expected, having consistent, recurring revenue can significantly enhance your business’s market value, sometimes even pushing the EBITDA multiple to higher-than-average levels.

This is why retainers are so valuable; even if you can ‘package up’ your projects to spread out as retainers, it’s a much easier and more stable picture to show to a buyer instead of erratic spikes every few months. It’s not to say projects aren’t desirable, but retainers offer stability and help minimise the risk referenced previously. Suppose you are a buyer getting an agency with over 70% of their clients on a 12-month contract. In that case, you feel much safer and happier than buying one with no guaranteed income in the next six months, and the only barometer is historical performance.

Office Location 

In the post-COVID era, the location of your business is still up for debate. However, there are factors to consider; these larger businesses have different cultures and may need people in the office to work a certain amount of times a week. Your buyer may be a multinational corporation which originated from a country with different working practices and thinking to your country. Finally, ego always comes into play; some companies will want an office in every major city across the world. If they don’t have a London office, they may just be looking to purchase companies in London.

Client Retention and Contract Length

As mentioned, retainers are naturally more favourable than pure project-based due to guaranteed post-sale income. The length and stability of these contracts can be a crucial selling point. High client turnover might be a red flag for potential buyers. Showcasing your clients’ lifetime value can help offer a different lens for both models. For example, suppose you sign a retainer for six months, and it ends versus a client that returns every January for a new year strategy project and pays a premium for not being on a retainer. In that case, overtime will be more valuable than the six-month retainer. It’s also essential to mitigate against risk; relationships are such a critical component of an agency’s growth, and showcasing to your buyer that the client relationships are not deeply connected to yourself, the founder will help ease any risk on the buyer side.

Intellectual Property

When buying a service-based company, the significant factors a buyer will get are IP, Media or Software.

Agencies often possess unique intellectual property, such as proprietary processes, software tools, creative content, and branding strategies. These assets can significantly increase the value of an agency. They must be showcased in an internal knowledge hub as something tangible the buyer gets as part of the sale. In addition, if you can spin any of your internal tools or software and sell it as a small SAAS on the side, this will also be highly favourable.

Talent Pool and Staff Retention

The quality and stability of the agency’s talent pool are paramount. Agencies are often as good as their staff, so a team with a strong track record, specialised skills, and low turnover rates is highly desirable. The reality is that once the founder leaves, the staff is left to deliver the work.

Scalability of Services

The potential for scaling services without a significant cost increase can make an agency more attractive. This includes expanding to new markets or offering additional services with minimal investment. Agencies, by nature, are very scalable. For example, a Shopify developer can operate across any country, and the buying agency can hire local account managers to cover the service’s client relations and language aspects. In contrast, if you niche too much and only focus on a location or a narrow market, this isn’t scalable. An example would be an agency that does SEO for pharmaceuticals. It’s a lucrative market, but there aren’t many businesses that operate in this market, and you won’t be able to work directly with a client’s competitor, so your overall market is limited.

Over reliance on 1 client 

A diversified client base reduces risk and increases attractiveness. Businesses with a well-balanced client portfolio, where no single client dominates the revenue, are seen as more stable and appealing. I aim for no client representing over 10% of our overall income. Yes, there’s been a period where this has been larger, but when it is, I treat it as additional income and avoid relying on it until things have balanced out again. It’s too risky for you and the buyer. I’ve seen a scenario where an agency sold, and within a few months, the largest client who had been with them for over four years. This client represented nearly 25% of the business. It’s safe to say this agency owner didn’t get anywhere near the overall value of the sale as they missed their earn-out targets considerably.

Brand Recognition and Market Presence

An established brand and a strong market presence can be a significant asset, indicating stability and a proven track record. I address This critical point in my other post on lifestyle vs performance agencies. If the agency’s brand recognition is tied to the agency founder’s brand and not the agency itself, this may cause further questions when selling; again, it’s not a deal breaker, but expect questioning. The buyer may even negotiate to buy your social accounts with the agency if they deem them valuable.

Cultural Fit and Management Style

Agencies often have unique cultures and management styles that must align with potential buyers’ values and operational techniques. This point is something that the buyers have tried to put a much higher emphasis on over the last few years, particularly in my space of digital marketing. Digital marketing agencies often have a strong culture, and there have been many cases in recent years of high staff turnover post-sale due to culture clashes. M&A advisors have also emphasised finding you the ‘right’ buyer, but take this as a pinch of salt and do your due diligence on your buyer.

Client Industries and Market Trends

The industries an agency serves can affect its attractiveness. Agencies serving growing or stable industries may appeal more than those in declining sectors. This is a straightforward one to explain: during the COVID period, many e-commerce agencies sold. eCommerce was exploding, and with it did Shopify and the Shopify ecosystem, so some of the largest eCommerce agencies sold up during this peak period for eCommerce. As did I, but in a different route, favouring employee ownership over traditional M&A.

Innovation and Adaptability

The ability of an agency to innovate and adapt to changing market conditions can make it more attractive, as it shows potential for future growth and relevance. Using case studies and historical references can help here. Also, if you have an in-house data or technical team whose role is to innovate and keep the agency ahead of the trends, this can look favourable, but it depends on the buyer again.

In conclusion, understanding the value of your agency and how to maximise it is crucial whether you are planning to sell or not. EBITDA and multipliers are fundamental concepts that play a significant role in determining the sale value of your business. Knowing how to calculate your EBITDA and how multipliers vary by industry can help you make informed decisions as you navigate the M&A landscape. Furthermore, focusing on the factors that influence your multiplier, such as scalability, growth potential, and risk factors, can help you increase your agency’s sellability and overall value. With a better understanding of these concepts, you can confidently take steps to enhance your business’s appeal and increase its value.