I've got the workshop deck open in front of me, a half-finished coffee that's gone cold, and I'm running through my notes one final time before tomorrow.

I’m covering things like:

• How we increased team’s capacity even when they say they’re “max’d out”

• How we found agency bottlenecks and figured out what’s going wrong

• How we chose clients to upsell, fire & grow to maxmize profit

• How we operated based on data and not on gut feels

Which meant:

• Increased take home profit

• Stopped working 12 hour days

• Improved agency sale potential

That's the 90 minutes.

You’ll also leave the workshop with three filled-in templates you can hand to your ops lead on Monday morning. Hard numbers, your numbers, ready to act on.

Plus: a separate, 30 minute 1-on-1, diagnostic call.

Doors open at 2:30pm ET.

If you haven't grabbed a seat yet, this is the last clean moment before I close registration.

Click here to get all the details and secure your spot.

See you tomorrow.

Nick

Instead of telling you why you should attend my upcoming workshop, I'm going to tell you why you shouldn't.

Don't come if your agency is doing under $50K/month. The math we're running doesn't apply cleanly at that revenue. The workshop is built for $100K to $1M/month operators. Below that, there's different work to do, and what I'm covering won't move the needle for you.

Don't come if you're looking for a lead-gen playbook. Wrong workshop. There are at least forty other guys on LinkedIn running that one. This one is about what happens after the lead's already in the door.

Don't come if your team is genuinely maxed out and you've verified it with real utilization data -billable hours over available hours, tracked weekly, by team. If you've done that work and your number is honestly above 80%, you don't need lever one. (For the rest of you - the team is almost certainly not as maxed as they say. We'll cover why.)

Don't come if you know exactly which of your clients are profitable and which are bleeding you on a per-account basis. If you can pull that number up right now without opening a spreadsheet, lever two is already handled. Skip it.

Don't come if you can't show up live for the Q&A. A solid portion of the value of the 90 minutes is the live diagnostic - attendees throw their numbers at me and I react in real time. The recording's good. The live is better.

Don't come if you've fully replaced yourself in delivery, sales, and ops, and you're spending five hours a week on the business max. You're past this. Forward this email to a friend who isn't.

If none of those describe you, what's left is pretty simple.

• You're running a $100K to $1M/month agency

• Your team says they're maxed and you're not totally sure they are

• You’re growing, but your margins are getting worse instead of better

• You want strategies you can execute next week

That's exactly who Thursday's prepped for.

May 14th, 2:30pm ET. 90 minutes.

There are less than 20 seats left and the price increases to $197 in 10 hours.

Click here to get all the details and secure your spot.

Nick

Going to run some math out loud.

$97.

That's the workshop fee (increases in less than 1 day).

Lower than dinner for two in most cities.

Now - let's say you're running a $300K/month agency, which is right in the middle of the band we're built for. This is what one move from the workshop is worth inside your specific P&L.

Lift your profit margin by one percentage point - one - that's $36,000 a year of additional take-home. The workshop covers 14 distinct ways to move that number. The odds you'd find more than one are high.

If your team is at 52% utilization (which is the average across the agencies we audit, even when they swear it's 80) and we get to 65%, that's roughly the equivalent of two to three full-time hires of capacity you don't have to make. At $80K average loaded cost, that's $160K to $240K of cost you avoid. In one move.

If your monthly churn is 6% and we cut it to 3%, on a $300K base, that's $108K of additional retained revenue over 12 months. Compounding the year after that.

Stack any two of those and the workshop has paid for itself roughly 500 times over before lunch.

Thursday May 14th, 2:30pm ET.

Click here to get all the details and secure your spot.

If the math makes sense to you, I'd grab a seat sooner than later.

Nick

Read each of these slowly.

Answer in your head: yes or no.

If you went off-grid for 3 weeks starting tomorrow…

• Would your team know which clients to prioritize without messaging you?

• Would a client crisis get resolved without anyone forwarding it to your inbox?

• Would a new lead get qualified, pitched, and closed without your involvement?

• Would payroll run, contractors get paid, invoices get sent - without you signing off?

• Would your managers handle a difficult internal conversation on their own?

• Would a missed delivery deadline trigger a fix without you stepping in?

• Would your team make a hiring decision (or a firing decision) without you in the room?

• Would you come back to numbers that improved, or numbers that degraded?

If you got more than two or three "no"s on that list, this is what I'd say to you, with care:

Right now, you don't own an agency.

You own a job that pays you better than your last job, and that you can't quit without the whole thing falling apart.

Don’t take that as a criticism.

It's the natural shape of a business that grew past one person before the systems caught up. The work expanded faster than the infrastructure could absorb it, and you became the human glue holding the whole thing together. Which works - until it doesn't, until you want a real holiday or a real exit or just one weekend where Slack isn't the first app you open.

I had a client tell me a couple of years into our work, it was a throwaway line in the middle of a different conversation, he said: "I took three weeks off this summer. First time in thirteen years."

Thirteen years.

What changed for him was four specific pieces of infrastructure that had to exist underneath the agency for it to run without him.

I'm telling you this in the run-up to the May 14th workshop because three of those four pieces are exactly what we're covering.

I don’t think that everyone reading this wants to take three weeks off tomorrow.

But the ability to take the time off - even if you choose not to - is the cleanest single test I know of for whether you've built something with enterprise value, or whether you've just built a very expensive job for yourself.

If you've ever wondered which one you're sitting on, the workshop is built to answer it.

https://www.agencyacquisitions.io/90min-workshop-may-7-2026/

Nick

I've helped 11 agencies get past $3M ARR at 37% average profit in 2025.

The path to those numbers is almost always 12 to 15 small moves stacked on top of each other, each one worth a few points of margin.

Tried to fit them all in a LinkedIn post the other day and couldn't. So I'm dropping 14 of them here, organized into the four categories - pricing, retention, capacity, and cost structure.

Most of these you can implement inside a week.

Pricing

The first move I'd run, before anything else, is what I call the 30/30 diagnostic. Two checks. If your sales close rate is above 30%, you're priced too low - buyers should be pushing back on price more than they currently are. And if your direct delivery cost is above 30% of revenue, you can't scale without losing margin. Both of those numbers tell you something specific about where the leak is.

Second move - take the 20 accounts paying you the lowest effective hourly rate and raise their prices. Either match the scope to the new price, or trim scope to match the old price. Either works. Doing nothing doesn't.

Third - productize wherever you can. Charge for the output, not the hour. Hourly billing puts you in a race to deliver less, which clients eventually figure out.

Fourth - different teams need different revenue-to-salary ratios because they don't behave the same way. General delivery should hit 3.33x. Ad buying or SEO, 4 to 5x. Creative, 2.5 to 3x. Video, 2.5x. If you're benchmarking every team against one number, you're either underpaying yourself in some teams or overpaying in others.

Retention

Run a 100-day onboarding plan with every new client. Three pillars - expectations, education, and an experience worth staying for.

Then audit your churn by account manager. This is the one most agencies have never done, and it's almost always the cleanest way to find money. One AM running 2% monthly churn and another running 18% inside the same agency is more common than you'd think. Coach the bottom or replace them. Either fix is fine. Pretending the average is the truth is what kills you.

Quarterly Business Reviews with every client every 90 days. Indefinitely. Every account, no exceptions.

Capacity

Calculate Direct Labor Efficiency Ratio for each delivery team. Formula's simple: revenue that team manages, divided by the billable salaries inside it. Target is 3.33. Below that, the team is losing money for you, full stop. You won't see it on the P&L because it's hidden inside aggregate gross margin and non payroll costs, but it's bleeding.

Track team utilization weekly - billable hours divided by available hours. Teams feel maxed out at around 50%. They genuinely feel that way. The only way to know the real number is to count the hours. A lot of agencies we audit are sitting at ~50% even when the team swears they're at 80.

Which leads to the next one - before you approve any new hire, restructure how the existing team's work is distributed. Most "we need another body" conversations are "we need to redistribute the bodies we already have" conversations. New hire is the most expensive answer to that problem.

And productize repeated work so junior staff can deliver it instead of senior staff.

Cost structure

Audit your contractor spend line by line. I've personally cut $120K out of a single P&L without losing any output.

Replace yourself in this order: admin first, then delivery, then marketing, then sales, then leadership last. The reason sales goes second to last and not first - founders close deals at higher rates than basically any salesperson they hire. You give that lever up too early and it costs you more than the salary you saved.

And the structural one. Cap non-billable team costs at 15% of revenue. Cap SG&A - software, rent, marketing, overhead - at 20 to 25%. That's how you protect a 30%+ profit margin structurally rather than fighting for it line by line every quarter.

That's 14.

There are probably another dozen I could talk about.

The full set, in the order I'd deploy them inside a real agency, is what I'm walking through on the 14th.

Workshop is Thursday May 14th, 2:30pm ET for 90 minutes live.

Capped at 30 seats.

Workshop + 1-on-1 diagnostic + completed profit audit + recording + live Q&A.

https://www.agencyacquisitions.io/90min-workshop-may-7-2026/

Nick

P.S.

10 signs your agency is about to hit a ceiling:

1. You're the only one who can close deals

2. Your team asks you before making any decision

3. Your best people are starting to look elsewhere

4. Every new client feels harder to service than the last one

5. Your margins are shrinking but your headcount keeps growing

6. Your onboarding is different every time depending on who's running it

7. You say "we need more leads" every month but your churn is above 5%

8. You keep adding services instead of getting better at what you already do

9. You're saying yes to projects outside your niche just to make payroll

10. You're working harder than you were at half the revenue

I've bought and sold 7 agencies, I'll sell more.

I can tell you flat out that selling one for a fair multiple in 2026 is going to be significantly harder than it was two years ago.

There are no shortcuts to this, there never were. But the market has changed in specific ways, and if an exit is anywhere on your horizon - even five years out - you need to know about them.

The first one is churn.

Two or three years ago, 8% monthly churn was a yellow flag in a deal. Now it's a walk-away.

Buyers run the math - 8% monthly means your entire client book turns over in 12 months - and they don't want to underwrite that. If retention fundamentals aren't solid, they're not touching the deal. Full stop.

The second is founder-led sales.

Unless you're part of a rollup where you're staying on, buyers don't want founder-dependent sales engines anymore. The reasoning's obvious - if the thing they're buying stops working the second you walk away, what exactly did they just pay for? If you're still the rainmaker, the deal gets structured punitively, or it doesn't happen at all.

Related to that but distinct: owners in smaller markets are flaking post-sale. Sellers are bailing on their 2-year retention contracts after the initial payout, even when they're contractually locked in. Buyers have caught on and they've adjusted - less upfront cash, longer earn-outs. Which means unless your fundamentals are bulletproof, you're getting paid out over time. You'll spend years chasing earn-out milestones while someone else runs the business, and if those milestones slip, you're the one who eats it.

Then there's the macro piece. It's just harder to sell today than it was a year ago. Every agency owner is looking at what AI might do to their business and deciding they'd rather exit now.

Buyers see the exact same thing.

So unless you have a strategic angle or rock-solid fundamentals, they're passing or low-balling - because they know you're motivated by fear, and fear is leverage against you.

The one that surprises me the most is the fact that sellers forget their agency is a product.

Agency owners obsess over product-market fit, pricing, and client experience for their services. Then they try to sell the agency and forget the agency itself is a product too. It has a buyer, a price, a value proposition, and competitors sitting on the shelf right next to it. Same rules apply. Most sellers never do the work to position the agency as a product to the buyer - and the valuation reflects it.

And the last one is post-sale story.

Strategic buyers aren't acquiring you to keep the business flat. They need to understand how it grows without you. If you can't articulate why the business performs post-sale - who runs it, how new clients come in, what the next chapter looks like - you're getting a distress multiple. Not a fair one.

So if you want to exit for a fair EBITDA multiple in 2026 to 2028, the list is short.

• Get churn below 3%

• Remove yourself from sales and delivery

• Build systems that make the buyer confident the business runs without you

• Create the story of what this business does for them after they write the check

That's the whole list.

The spread between prepared founders and unprepared ones over the next three years is going to be brutal. I'm not being dramatic - I've been on enough sides of enough of these deals to see it coming clearly.

Which is honestly a big part of why I'm running Thursday's workshop. Three of the four items on the "prepared founder" list - getting churn down, freeing yourself from day-to-day delivery, and building systems so the agency runs on data instead of your gut - are exactly what we're covering on the 7th.

Whether your exit is in 18 months or five years, the preparation starts with the same moves.

Thursday May 14th, 2:30pm ET. 30 seats. $197.

Workshop + 1-on-1 diagnostic + profit audit + recording + live Q&A.

https://www.agencyacquisitions.io/90min-workshop-may-7-2026/

Nick

Following up on Monday's email about the May 7th workshop, I wanted to tell you about an agency I ran.

We scaled it from $1.8M to $11.5M in 42 months on 5 to 10 leads a month. The whole way.

Normally when I tell people that, the first question back is "okay, so what was the lead gen strategy?" - and that's exactly why I'm writing this. There wasn't one. Lead volume was roughly flat the entire time.

What changed was everything that happened after the lead came in, and everything that happened to the clients already in the door.

3 levers. Let me walk you through them:

Lever 1: Sales process, before anything else

When I came in, the agency was at $150K/month. I'd just come out of a company with 30 salespeople, so I already knew how to structure a discovery call, how to write a proposal that didn't get ghosted, and how to close at high rate on low volume. That was the first thing I rebuilt.

Too many agencies are running sales processes that got built ad hoc by the founder in year one and never updated. They're leaking deals at every single stage and they can't see it, because they've never measured close rates by stage.

The lesson I took from that first year, and I still believe it: a good sales process on 5 leads a month will outrun a bad one on 50.

Lever 2: M&A, for the step changes

Over those 42 months, we acquired three agencies into the business. One of those deals brought in $200K MRR in a single transaction - roughly a year of organic growth, done in one move.

Our rule was narrow: we only bought agencies running at sub-10% margins. Reason being, if you can take a 7% profit agency and lift it to 20% using the same operational playbook you're already running internally, you effectively pay the seller back with their own money. The multiple collapses in your favor.

This isn't a secret, by the way - every halfway-serious buyer does this. But most agency owners never consider being on the buy side because they assume M&A is for someone else, or for later, or for when they're "bigger." None of that's true.

The lesson: buy an agency at 7%, improve it to 20%, the deal pays for itself. Full stop.

Lever 3: Client retention

This is the one I'd argue matters most. It's also the one that connects directly to what we're covering on May 7th.

On 5 to 10 leads a month, you cannot afford to lose clients. A single churned account on that lead volume costs more than a new one coming in - and I mean that literally, once you run the lifetime value math. So we stopped treating retention as a service-team problem and started treating it as the growth engine. Because on that lead volume, that's exactly what it was.

The lesson here is one I'd want any agency owner to sit with for a minute: when your pipeline is small, keeping clients is your fastest path to compounding revenue. Every month a client stays, the revenue compounds. Every month they leave, you reset to zero on that account and pay CAC all over again.

By month 42, we were at $11.5M. Still on the same 5 to 10 leads a month.

This is why when an agency owner asks me "how do I scale?" and their first instinct is to double the ad spend or hire a new BDR, I push back. The unlock is almost never more leads. It's almost always one of those three levers - or some combination - and nine times out of ten it's retention plus sales process, because those are the two you can move in a matter of weeks.

Which is most of what we're covering on May 7th. Team capacity, which clients to upsell and which to fire, and how to run the whole operation off data instead of instinct. Same operational spine that took that agency from $1.8M to $11.5M.

30 seats.

$197 $97 Early Bird Price.

Thursday May 7th at 2:30pm ET.

Grab a seat here:

https://www.agencyacquisitions.io/90min-workshop-may-7-2026/

Nick

P.S.

How to give an agency owner a cortisol spike in 5 seconds or less:

"Hey, do you have a minute to talk?"

I sat down and told myself I wasn't going to run this workshop again.

Too much prep, too hands-on, too many hours off my calendar.

Turns out I'm running it again. Thursday, May 7th 🤷‍♂️

The reason I caved is…

Across the 50+ agencies I've run this system with, we've lifted profit by an average of 39%.

That's not a projection, it’s literally what showed up in their P&Ls.

And the feedback from the last group was fantastic.

If you want the unfiltered version of what this process feels like from the inside, Austin from Grow My Ads recorded a 2-minute video about it. His agency was running at break-even when we started. Took about 3 months to get the profit side back on track. He talks honestly about what that was like - worth your time before you decide:

This is what we’ll be covering on the 7th:

1. How to grow team capacity even when they swear they're "maxed out"

2. How to choose which clients to upsell, fire, and grow to maximize profit.

3. How to run your agency on data, not gut feel, in 10 minutes a week.

Come if you're nodding at this:

• You're running a $150K-$1M/mo agency

• Your team says they're maxed, but revenue doesn't show it

• You're tracking 15+ numbers and still can't answer "are we winning?"

• Growth is happening, but margin is getting worse

• You want moves you can make next week

Skip it if you're pre-revenue, if you're after a lead-gen playbook (this isn't that), or if you can't show up live for the Q&A.

Here's what a few owners from the last group said afterward:

Details:

Workshop + 1-on-1 diagnostic call + completed profit audit + full recording + live Q&A

• Thursday, May 7th, 2:30pm ET / 11:30am PT

• 90 minutes live

• 30 seats total

• $197 per seat

Grab your seat here:

https://www.agencyacquisitions.io/90min-workshop-may-7-2026/

I wouldn't be surprised if this sells out before the week's out.

Nick

I want to walk you through a specific system that I've used to triple profitability in two separate agencies - and that I've replicated across many more since.

It's not complicated or expensive to implement.

It just requires a level of obsessiveness about client feedback.

I have two examples I'll reference:

One agency went from 13% profit to 36% to 50% over the course of about five months. The other sat at 14% for three months straight, we got the system running with enough iterations, and now they're averaging above 40% profit per month. The first agency is doing mid-$200Ks in monthly revenue. The second is around $170K.

So this isn't small money - at 40-50% margins on that kind of topline, the take-home is significant.

Let me show you how it works.

There's a mindset problem I need to address first because it's the thing that determines whether this system gains traction or falls flat. Most, when they think about client retention, are aiming at retention. That's the target. Keep the client and don't ever lose them.

But if your target is retention, you'll hit it sometimes and miss it sometimes. Some clients will land above that line and stick around. Some will fall below it and leave. You'll always have some level of churn because you're aiming at the bare minimum of what it takes to keep someone.

Now imagine you aim at referrals instead. Referrals require a client to be ecstatic with you. Not just satisfied - genuinely thrilled. If your whole team is oriented around making clients so happy that they proactively refer other businesses to you, an interesting phenomenon happens when you miss. Because you will miss sometimes. But a miss from the referral target still lands you in the testimonial zone, or the upsell zone, or at absolute worst, the retention zone.

You're missing high instead of missing low.

It sounds theoretical but it's extremely tangible because it changes every conversation your team has about clients. Instead of "are they going to cancel?" the question becomes "are they happy enough to refer someone?" Completely different orientation and completely different outcomes.

Now - the system itself has four steps, and the order matters. If you skip a step or rearrange them, it doesn't work. I've seen it enough times to be definitive about this.

Step one is Net Promoter Score. You send every client a survey asking how likely they are to refer you, scored out of 10. Nines and tens are your promoters - these people love you. Sevens and eights are neutral, and in my experience seven is closer to the danger zone than people think. A seven means they'll stay for now, but they're not enthusiastic and if something better comes along, they'll look. Six and below is active danger. You are at risk of losing this client.

You send this monthly. Not quarterly, not when you feel like it. Monthly. And your response rate should be between 60 and 75% every time. If your NPS response rate is below that, you have a different problem - your clients don't feel engaged enough with you to even fill out a survey, which tells you something important all on its own.

Step two is the feedback call. After the NPS scores come in, you call every single client one-on-one. I don't care if they scored you a 1 or a 10 - you're calling them. And you're asking specific questions. Why did you give us that score? What could we do better? What did you like most about the service this month? What are the business initiatives you're focused on over the next 3-6 months?

This isn't a check-in call. It's an intelligence gathering operation. You're trying to extract as much actionable feedback as possible so you can improve, and so the client feels like you genuinely care about their experience - which, by the way, you should.

If they scored you a 9 or 10, this is where you ask for the referral, the testimonial, or the upsell. Directly. In the call. Not in a follow-up email three weeks later. In the moment, while they're telling you how happy they are.

Step three is communication. Everything you learned on those calls needs to get synthesized and communicated back to the full team. Account managers, strategists, creative people, whoever touches client work. The feedback doesn't live in a notes app on your phone. It gets shared in a structured way so that every person involved in delivery understands what clients are saying, what's working, and what needs to change.

Step four closes the loop. Based on the feedback, your team amends the process or service to make it better. Not vaguely, not "let's try harder." Specifically - this client said our response times are too slow, so we're implementing a 4-hour response window. This client said they don't understand their results, so we're adding context to the weekly report. This client said they feel like we're not being proactive enough, so we're scheduling monthly strategy calls instead of quarterly ones.

Each iteration makes the service slightly better. And when you're running this across 30 or 40 clients every single month, those iterations compound fast. One percent better, 200 times, is a 730% improvement. The improvement is dramatic and it's permanent because each change is baked into how you operate going forward.

There's a second layer to this that most people miss, and it's equally important. You need a client results dashboard that tracks every client's performance against their targets on a weekly basis, not monthly. Why weekly? Because if you catch a miss in week one, you have three weeks to fix it before the month closes out. If you're waiting until the month-end report to find out a client is underperforming, you've already lost the opportunity to intervene.

The dashboard should show every client, their target, what type of metric you're tracking, where they are against that target this week, and what the next step is. On target? Launch a new test, stay aggressive. Slightly below? Self-audit -have the account manager review what's happening. Significantly below? Escalate. Manager audit, peer audit, team lead audit, whatever the appropriate level is for the severity of the miss.

What makes this powerful: You review this dashboard in a team meeting where everyone who contributes to client results is in the room. The agenda is simple. What did we do to exceed targets and what can the team learn from it? Why did we miss targets and what are the top three ways to fix it? Then the rest of the team acts as consultants - "have you tried this? I did this on another account and it worked." You're creating a learning environment where the best ideas surface naturally and everyone gets better together.

The last piece is using all of this data - the NPS scores, the feedback calls, the results dashboard - to identify your top and bottom performers and create a training flywheel. The person whose clients consistently score 9s and 10s on NPS? They should be training the rest of the team on how they manage client relationships. The person who's consistently exceeding results targets? They should be training others on their tactical approach. Sometimes it's the same person. Often it's not - someone might be incredible at client interactions but average at generating results, while another person is a results machine but not great at the relationship side. Both can train. Both should.

This is how you build a team that gets better every single month without you being the one doing all the coaching. The system identifies who's great at what and puts them in a position to elevate everyone else.

The delay on this system is real and I want to be honest about it. It took about three to three and a half months of iteration before the results became tangible in both of the examples I showed you. You're not going to see a profit jump in month one. You're building a flywheel, and flywheels take energy to get spinning. But once they're spinning, the momentum is self-sustaining.

If you want help implementing this in your agency book a call here.

We'll walk through where your current retention systems have gaps and build the plan to close them.

Nick

You may be closing too many deals.

That sounds like a weird thing for an agency consultant to say. Bear with me.

I had a client come to me recently who was closing at over 60%.

Sixty percent of every proposal they put out came back signed. And they were proud of it, obviously I understand why - that's a number most agency owners would kill for.

But it was unfortunately the core of their profitability problem.

If you're closing way more than 30% of your proposals, the market is telling you that you're charging too low. People are saying yes too easily. There's no friction, no one's pushing back on price and no one's saying "let me think about it." They're just signing, which means you haven't found the ceiling yet.

This is why I created what I call the 30/30 rule.

There are so many factors - what your competitors charge, your sales process, your target market's ability to pay, your brand, how good your case studies are, how rare or unique your service is. I could go on forever. The 30/30 rule cuts through all of it and gives you two numbers to check.

Number one: can you deliver your service for 30% or less of total direct cost? Direct cost meaning all the people involved and the tools required to deliver the work. If your delivery cost is 30%, your delivery margin is 70%. That's the target.

Number two: is your close rate at or around 30%? The sweet spot is somewhere between 28% and 35%. High enough that your pipeline converts consistently. Low enough that the market is telling you the price is right at the edge of what buyers will pay.

How to use these two numbers together:

If your close rate is above 30% - and especially if it's at 40%, 50%, 60% or higher - you raise your prices. Full stop. It doesn't matter what your cost structure looks like. The market is telling you it can support more. You increase price on new clients until the close rate drops back into that 28-35% range.

This client I mentioned? We took them from $125 an hour to $150, then $175, then $200. At $200 per hour, they're still closing above 50%. Which means we could probably go even higher. For them, the difference between $125 and $200 an hour - applied across their entire client base as they gradually transition older clients to new pricing - is the difference between 5-10% profit and 35-40% profit.

If your close rate is below 30% and your delivery cost is under 30% - this is rare, but it happens. You're efficient at delivery but you're priced too high for what the market will bear right now. The fix is straightforward: lower your price until your delivery cost hits 30-35%. This alone might push your close rate back above 30% because you've become genuinely competitive.

If your close rate is below 30% and your delivery cost is above 30% - this is the hard one, and it's where most agencies that are struggling sit. You can't close enough deals to grow, and the ones you do close aren't profitable enough to sustain you. You're caught in a squeeze.

The fix here is proof.

You need to be able to demonstrate the value of what you deliver so convincingly that people will pay what you need to charge. And the way you build that proof is through internal case studies - not the marketing version you put on your website, but a deeper version where you reverse engineer exactly how you got the results for your best clients. What did you do, what did the client already have going for them that contributed to the outcome and what variables were in your control versus theirs.

When you build these internally first, two things happen. One, your delivery team learns how to replicate the result because they now understand every variable that contributed to it, not just the ones they were directly responsible for. Two, your sales team can speak to the full value equation in a way that positions you as a strategic partner instead of a vendor. They can walk a prospect through exactly what it takes to get great results - both what you'll do and what the client needs to bring to the table - and that creates a qualification process that naturally increases both close rate and client quality.

The 30/30 rule matters so much at the macro level.

If your delivery cost is above 30%, you don't have room to scale. Period. Because at full scale, an agency's cost structure looks roughly like this: 30% direct delivery, 15% non-billable staff and management, 20-25% SG&A. That leaves 30%+ profit. But if your delivery cost is sitting at 45% or 50% right now, the moment you start adding the management layers and operational infrastructure that growth requires, your margin disappears. There's nowhere for it to go. This is why so many agencies between $1M and $3M feel like they're working harder than ever and making less than they used to. Revenue went up. So did costs. And the pricing never got fixed.

Run your two numbers this week. It takes about twenty minutes. Look at your close rate over the last six months and calculate your direct delivery cost as a percentage of revenue. If either number is off, you now know exactly what to do about it.

If you want help figuring out what your 30/30 looks like - or if you run the numbers and don't love what you see - book a call here.

Nick

A few updates from the trenches for you.

I want to share what I'm seeing across the 30+ agencies I'm currently working with, because the patterns are pretty consistent right now and they might match what you're experiencing in your own business.

Sales pipelines have been slow.

Q1 was rough for a lot of agencies, but the interesting thing is that it wasn't slow in the way most people are framing it. The volume of leads coming in didn't drop dramatically. What changed is the time it took to close them. Agencies that were typically closing deals in 15 to 30 days were suddenly looking at 45 to 60. Agencies that were used to 60-day sales cycles were dragging out to 90 or 120. The deals were still happening - they were just taking significantly longer to come together, which had the same effect on cash flow as losing pipeline volume.

The good news is that I'm starting to see things pick back up. As of the first week of April, I've had multiple clients tell me their pipelines are warming up again and deals are moving. So if Q1 felt brutal, you're not alone, and the data I'm seeing suggests Q2 is going to look meaningfully better. Hold the line.

Now let me talk about AI…

Right now, there's a tendency to overindex on AI in a way that's not generating returns.

This is my theory: Coming out of COVID, a lot of agency owners became disillusioned with managing people. Remote work made it harder, the labor market got weird and hiring became unpredictable. Most owners I talk to love their people, but they hate dealing with their people.

The friction of management became something they wanted to escape from.

And then AI showed up and offered what looks like an escape hatch. Reduce headcount and just let the software do the things you used to need humans for. It's seductive. I get it.

But that's not the right reason to use AI, and it's not even the right framing for what AI is good at right now. The point of using AI in your agency is to render a better product in the marketplace.

To do work that was previously impossible at the level of quality and speed you can now hit. To widen the gap between what your agency delivers and what your competitors can match.

Headcount reduction might be a side effect down the road, but it shouldn't be the goal driving your decisions today.

(I know I mentioned this in my last email but it’s worth repeating)

I had this conversation with an agency owner just yesterday. I asked him how much time he'd personally spent on AI in the previous week - building skills, training models, generating outputs, whatever he was working on. He said he'd probably spent 20 to 30 hours. So I asked him the obvious follow-up: what do you have to show for those 30 hours? Tangible outcomes. A campaign that's performing. Hours saved across the team. A new capability that's making you money. Something measurable.

The honest answer was nothing. He'd been playing with it. Treating it like a toy. Tinkering, experimenting, watching tutorials, reading posts on LinkedIn about prompts that other people had used to get cool results. None of it tied to a specific outcome he was trying to produce in his business.

This is the problem. AI is not a toy. But it absolutely becomes one if you sit down behind it without a clear purpose for what you're trying to get it to do. You'll burn 20 hours a week on it for months and end up with a folder full of half-finished experiments and zero impact on your P&L.

Before you spend any meaningful time on AI in your business, you need to do the unsexy work of building a plan. What outcome are you trying to produce? What does success look like? What's the metric you're going to measure against? Then you execute against that plan. The random meandering - "I saw this post and it can do this thing, let me try it" - does not produce returns. It produces hours you can never get back.

The other thing I want to remind you of is something that's true of every gold rush in history. The people making money from talking about AI aren’t mining for gold, they are selling shovels. Right now in AI, the people making serious money are mostly the platforms, the tooling companies, and the consultants selling courses about prompts. They're not the agency owners trying to retrofit their entire business around the technology overnight.

I'll give you one specific example:

People keep telling me AI can write a 10-email sequence in 20 minutes. And technically, that's true. The AI will produce 10 emails in 20 minutes. But every time I look at the sequence that has not been edited by a human, it's completely unusable. Zero out of ten. Generic, voiceless, hollow. The kind of thing that would actively damage your brand if you sent it. And when I get the owner to read what the AI produced, even they admit it's terrible. But they'd been about to launch it because the speed felt impressive enough that they didn't stop to look at the quality.

Speed without quality is not a productivity gain.

Use AI. Absolutely use AI. But use it the way you'd use any other major investment in your business - with a clear purpose, measurable outcomes, and a willingness to throw out the experiments that aren't working.

Don't use it as an escape from the parts of your business that are hard. Use it as a multiplier for the parts that are already working.

Book a call here so we can figure out where AI might fit inside your operation (what to automate, what to leave alone, where the highest-leverage opportunities are hiding).

Nick

P.S.

The biggest lie agency owners tell themselves?

I'll go first:

"We just need more leads."

P.P.S.

A few months back, I joined AJ Cassata (Founder of Revenue Boost), for a 50 minute chat about how I scaled my agency to $10M ARR in 3 years.

Catch it below if you’re interested 👇️ 

One of my clients today me he was thinking about pivoting his agency into more of a SaaS model. They'd vibe-coded something internally, they were already selling a small version of it, and he was excited about turning his team into a "fast delivery" operation built around the software instead of around services.

The vision was that the SaaS would scale infinitely, the team would shrink, and the business would suddenly look more like a tech company than an agency.

I asked him to tell me more about it, because I've been having this exact conversation with a lot of agency owners over the last few months. And the funny thing is, while all of these agency owners are looking at SaaS and dreaming about pivoting into it, almost every actual SaaS founder I know is doing the opposite. They're moving away from SaaS. Some of them are actively looking to acquire service-based firms because they want to get into the agency game.

So…

…the people who are already in SaaS - who built the businesses you're trying to turn yours into - are leaving. And the people in services are trying to climb into the burning building they just walked out of.

There's a reason this is happening, and AI is the reason.

AI is, in a lot of ways, the end of traditional SaaS. Or at least the end of the version of SaaS that minted everyone's heroes over the last decade.

Because AI democratizes coding. It collapses the moat that most SaaS businesses were built around. The thing you used to be able to charge $200 a month for as a SaaS subscription -there's a very real chance someone can now build a comparable version in an afternoon with Claude or Cursor or whatever they're using. The barrier to entry has collapsed and the economic value of being a SaaS company has come down with it.

Meanwhile, services - actual human expertise applied to specific problems - has gotten more valuable, not less. Because AI can produce a generic answer. It cannot replace the strategic thinking, the relationship management, the judgment calls, or the accountability that good service work involves. The moat is moving from code to expertise. And expertise is exactly what agencies are built on.

So when an agency owner tells me they want to pivot into SaaS, my honest reaction is: why are you trying to climb into a model that the people already in it are abandoning?

Let me be clear about what I'm not saying: I'm not encouraging you to ignore AI. I'm saying the opposite.

I want you to go all in on AI in a very specific way.

By using AI to find operational efficiencies and delivery efficiencies inside the agency model you already have.

Instead of trying to productize your service into a piece of software you can sell standalone, you should be asking how AI can let your team deliver work that was previously impossible to do at scale. Instead of building a SaaS, you should be building Claude skills and MCP workflows and proper internal tooling that makes your existing service offering 2-3x more efficient. Instead of pivoting your whole company, you should be assigning your senior people the job of figuring out how to use AI to do what currently looks impossible - and getting your frontline team comfortable using it on a daily basis as a baseline expectation.

That's the actual play. SaaS-enhanced agency, not full SaaS pivot. Use the technology to widen the gap between what your agency can deliver and what your competitors can deliver. The leverage is enormous. The risk is minimal. And you don't have to abandon the business model that already works for you to do it.

The SaaS dream is appealing because it sounds like an escape hatch from the parts of agency life that are hard. The fantasy is that you build a piece of software, the software runs itself, and you collect MRR while you sleep. I get it. I've had that fantasy too.

But that's not how it works for 99% of people who try it.

Don't pivot into the building they're leaving. Stay in your lane. Use AI as a multiplier for the work you already do well. And focus your senior leadership on building the internal AI infrastructure that makes your agency genuinely impossible to compete with.

If you want help figuring out where AI fits into your specific operation - what to automate, what to leave alone, where the highest-leverage efficiencies are hiding - book a call here.

Nick

P.S.

10 signs your agency is healthy:

1. you can fire a bad-fit client tomorrow and your PNL doesn't flinch

2. when someone asks what keeps you up at night, you genuinely don't have an answer

3. you're not working past 5pm putting out fires

4. your agency funds the life you actually want (not just a bigger agency)

5. you love getting off on Friday, but you're not dreading Monday either

6. you spend your days building with people you trust, not babysitting people you don't

7. you're growing because you want to, not because you need to cover payroll

8. you stopped comparing your MRR to every other agency owner on LinkedIn

9. your family actually sees you at dinner, not just on weekends

10. you could disappear for 2 weeks and nothing breaks

...what did I miss?

I made a mistake that cost me 30% of a team in three months.

A few years back, we acquired an agency with 20 employees and the first thing I did during due diligence was what I always do - I sat down and interviewed every single employee we were inheriting. One-on-one. Just conversations to understand who I was about to work with and where the cracks were.

Within those interviews, three people raised every single red flag I know how to spot. They were optimizing entirely for themselves while using all the right team-first language. They were skilled at sounding collaborative while telling me, in subtle ways, that they didn't really answer to anyone. The previous owner had let them operate with zero accountability for years. They could say "I don't have time for that" and nobody ever pushed back. They'd built an entire identity around being too important to be questioned.

I went back to the team after those interviews and said, very directly, that these three people could not make the cut. That if we were going to run this business properly post-acquisition, they had to go before we closed. I was overruled. The argument was that we needed continuity, that they had relationships, that disrupting things this early would create chaos.

That was red flag number one, and I should have listened to my own gut harder than I did.

I let it slide.

Weeks three and four - the first two weeks after we officially took over - we started introducing basic accountability. Nothing extreme. Time cards so we could see what people were working on. Utilization tracking. A capacity forecast so we could stop guessing about who had room and who didn't. Just the foundational data layer that any healthy agency needs to operate.

The three people I'd flagged immediately started pushing back. They framed every measurement system as an insult, every accountability conversation as micromanagement, every basic operational request as some kind of corporate overreach. That was red flag number two, and again, I should have moved on it then. I didn't.

By month two we were assigning work based on capacity instead of just taking people at their word about how busy they were. The three of them completely lost it. "You think we're robots." "You don't understand how we work." "This isn't who we are as a team." They pointed fingers in every direction except at themselves. None of them - not one - was willing to look at the data and admit that they'd been coasting for years under a system that never asked them to perform.

By month three, all three were gone. But not before they convinced three more people to leave with them on the way out. So in 90 days, we lost six people from a 20-person team. A 30% exodus, immediately after an acquisition, in front of clients who were already nervous about the transition.

It hurt. It cost us money. It cost us momentum. And honestly, it cost us some clients in the short term because the chaos was visible from the outside.

But it taught me something I'll never forget, and I want you to internalize it before you ever find yourself in a similar situation - whether that's an acquisition, a leadership transition, or just the moment you finally try to bring real accountability to a team that's been operating without it.

Three lessons.

First: trust the due diligence. If someone raises red flags in early conversations, that's data. Real data. Don't override it because the seller wants a clean handoff or because you're worried about disruption. The disruption from keeping the wrong people is always worse than the disruption from removing them upfront. Always.

Second: cut before you close. If you're acquiring an agency, make it contingent. Specific people don't pass the bar, they don't come over. Period. It's a much harder conversation to have after the deal closes than before, and the cost of doing it later is exponentially higher. The seller will push back. Push back harder.

Third: expect the blame. When you introduce accountability to a team that's never had it, the people who've been coasting will never self-reflect. Not once. They will call you the villain. They will tell their colleagues you're a tyrant. They will frame basic operational expectations as some kind of personal attack. That is the cost of fixing a broken culture, and you have to be willing to absorb it without flinching, because the alternative is letting the broken culture continue to drag everyone else down with it.

Most agency owners I work with have at least one or two people on their team right now who are exactly what those three were. Skilled at sounding collaborative, allergic to measurement and utterly convinced they're indispensable.

The longer you let them operate without accountability, the harder the eventual reckoning becomes. And there is always a reckoning. You either choose it on your terms or you wait until the business forces it on you.

If you want help building the accountability infrastructure that surfaces who's performing and who's just been coasting - without losing your good people in the process - book a call here.

Nick

This is the final email in the poll results series.

We've covered capacity forecasting, churn tracking by account manager, and why growth plateau is almost always a symptom rather than the disease.

Today I want to share the rest of the data, and then say something honest about what it means.

On consultant history: 53% of you have never worked with an agency consultant or coach before. About 29% have and found it helpful. And 18% tried it and felt like it was a waste of money.

Nearly 1 in 5 of you paid someone for help and walked away feeling burned. If that's you, I understand the scepticism. It's earned. And it's part of why I lead my discovery calls with a free audit and the found money guarantee - because you should be able to see the value before you ever commit to anything.

On what you want from me: 55% of you want tactical frameworks - things you can implement this week. 27% want behind-the-scenes looks at how I run my own agencies. 18% want case studies. Message received. Everything I send from here is going to skew heavily toward the tactical end. Less theory, more "here's exactly how to do this specific thing."

On intent: 11% of you said you're actively looking for help right now. 39% said interested but not ready. And 50% said just here for the content.

I want to talk about this split because I think it reveals something that goes beyond this poll.

The agencies I've worked with that go from plateaued to 30%+ profit margins, from stuck at $1.5M to scaling past $3M - they don't get there by consuming more content. They get there by making a decision to stop learning about the problem and start solving it.

I'm not saying this to guilt anyone. I'm saying it because I've watched the pattern play out over and over. The 11% who said "actively looking" aren't smarter than the 50% who said "content only." They're not more successful. They're not better agency owners. They've just crossed a threshold where they've decided that knowing what to do and actually doing it are different things, and they want help with the doing.

The 53% who've never worked with a consultant have been trying to figure this out alone. Some of them for years. And that's fine - a lot of agency owners are self-taught operators who've built impressive businesses through sheer willpower. But there's a ceiling on what willpower alone can produce, and most of you know exactly where that ceiling is because you're sitting under it right now.

The 18% who got burned tried to get help and got the wrong kind. That's not a reason to stop looking. It's a reason to be more discerning about who you work with and what they're promising.

What I'd say to all three groups is:

If you're in the 50% who are here for content - great. The content is about to get significantly more relevant to your specific situation based on everything you've told me this week. Keep reading.

If you're in the 39% who are building toward something - same thing, and I'll be here when the timing is right.

If you're in the 11% who are ready now - the audit call is here. I'll find at least $100K hiding in your business and map out the most efficient path to $1M a year in profit.

All in all, thanks for engaging with this series.

It genuinely shapes what I build for you from here.

Nick

I've been building toward this email for a reason.

Two emails ago we covered capacity forecasting.

Last email, churn tracking by account manager.

Both of those were the building blocks. This is where it all connects.

38.5% of you said your biggest problem was growth plateau.

"We've plateaued and I can't figure out why."

I'm going to respectfully push back on this.

You are plateaued. I believe you. But growth plateau is almost never the problem. It's the symptom of one or more of the other three problems underneath it.

What I mean:

If your churn is above 2.5% per month and you don't know it - or you know it but you're not tracking it by account manager so you can't see where it's coming from - then new revenue is just replacing lost revenue. You're closing deals but the base isn't growing because clients are leaving as fast as they're arriving. From the outside, it looks like a plateau. From the inside, it feels like you need more pipeline. But more pipeline doesn't fix a leaky bucket. It just makes you pour faster.

If your team is running at low utilization but telling you they're full - and you don't have a capacity forecast or DLER to verify it - then you're carrying cost you don't need to carry. Your margins are thinner than they should be, which means you don't have the cash to invest in growth even if you wanted to. From the outside, it looks like a plateau. From the inside, it feels like you need to hire before you can grow. But you don't need to hire. You need to deploy the people you already have more effectively.

If your managers aren't managing against clear objectives and metrics - if they don't have defined accountability for retention, results, and productivity - then the business only performs when you're paying attention to it. You step away to focus on growth and delivery slips. You step in to fix delivery and growth stalls. You're the bottleneck, and the business can't scale past your personal capacity. From the outside, it looks like a plateau. From the inside, it feels like you just need to work harder. But working harder is what got you here, and it won't get you to the next level.

This is what I mean when I say growth plateau is a symptom. The root cause is almost always hiding in one of three places: retention, operational efficiency, or management accountability.

And usually it's a combination.

The way I think about fixing this is through what I call the Management Accountability Method.

The short version: every role in your agency needs clear objectives - specific measurable ones.

Every objective needs a metric that tracks it and a KPI that predicts it.

Every manager needs to know not just what their team owes the business, but what they as a manager owe their team - training, tools, support, feedback cadence. And there needs to be a clear system for distinguishing between "this is an employee performance problem" and "this is a management problem because we didn't give this person what they needed to succeed."

When this infrastructure is in place, the data from your capacity forecast and your churn dashboards stops being numbers on a screen and starts driving behavior change.

You can see that pod 3 is underperforming on DLER. You can see that one account manager's churn is 3x the team average. You can see that a department is at 55% utilization while claiming they're full. And your managers = because they have clear objectives and accountability - can do something about it without you being in every conversation.

The data feeds the management system. The management system drives behavior change. The behavior change improves the data. And the loop compounds.

This is the behavioral feedback loop I talk about constantly. It's not sexy. It's not a new lead source or a fancy funnel. It's operational infrastructure. But once it's running, your growth stops being dependent on you personally grinding harder and starts being a function of the system operating correctly.

Now - 55% of you told me that tactical frameworks are what you want most. Something you can implement this week.

So here's the diagnostic checklist.

If you can't answer three or more of these questions, you've found your growth bottleneck:

Can you tell me your exact monthly churn rate by account manager right now, without looking anything up?

Do you have a DLER or capacity forecast that shows you exactly how full each pod or department is this month?

Can every person in your agency name their top three objectives and the metrics they're being measured against?

Do your managers have a defined, standardized method for how they manage their direct reports?

When was the last time you did a client profitability ranking and took action on the bottom 20%?

If you answered no to three or more of those, the plateau isn't an infrastructure problem.

And infrastructure problems are extremely fixable.

They're just not fixable by closing more deals.

If you picked "growth plateau" in the poll and this email is making you realize the problem might be deeper than you thought - book a call here.

I'll walk you through exactly which of these three areas is the primary bottleneck for your specific agency, and what to do about it first.

Nick

Last email I went deep on capacity forecasting.

Today we're getting into the churn data (this one's a bit more uncomfortable).

The split was almost perfectly even. 43% of you are tracking churn by individual account manager. 43% are not. And 14% aren't tracking churn at all.

I want to talk to all three groups because the advice is different depending on where you're at.

For the 14% not tracking churn at all: I'm going to be direct with you. You are flying blind on the single most important metric in your business. You need to start tracking two things immediately. First, churn by number of clients - how many clients are you losing per month? Second, churn by revenue - how much revenue is walking out the door per month? These are different numbers and they tell you different things. Losing five $1K clients is a very different problem than losing one $15K client. You need both.

The ideal target is 2.5% monthly churn or less. That translates to roughly 30% annual churn. If you're thinking "30% sounds high" - it means you're keeping clients for an average of about three and a half years, which is excellent. The biggest and most profitable agencies I work with are at 2.5% or below. If you're above that, and especially if you don't even know your number right now, this is probably the single highest-leverage thing you could work on.

For the 43% tracking company-wide but not by account manager: You have the foundation but you're missing the insight that makes it actionable. Company-wide churn is an average, and averages hide everything.

I keep coming back to this example because it's real and it's common: I've worked with agencies where the blended churn was 6-7%. Totally acceptable on paper. But when we broke it out by account manager, one person was at 2% and another was at 20%. That's a 10x difference in client lifetime value between two people doing the same job at the same company.

Once you can see it by person, the fix isn't necessarily firing anyone. It's figuring out what the 2% person is doing differently - their communication cadence, their proactivity, how they handle problems, how they set expectations — and training everyone else to do the same thing. The 2% person is your best training asset and you probably don't even know who they are yet.

For the 43% already tracking by AM: Great. You're ahead of most. Two follow-up questions. First - are you managing against it? Do your account managers know their individual churn rate? Is it part of their objectives? Is there accountability if someone's consistently above target? Having the data and using the data are different things.

Second - are you also tracking churn by originating sales rep? This is the one most people miss. If one sales rep's clients churn at 15% in the first 90 days and another's churn at 3%, the problem didn't start in delivery. It started in the sales conversation. That rep is either overpromising on outcomes, attracting the wrong type of client, or framing the purchase in a way that sets the relationship up to fail from day one. It looks like a delivery problem. It's a sales quality problem, and it's invisible unless you connect the churn data back to who closed the deal.

Knowing your churn numbers - even by account manager, even by sales rep - doesn't fix your churn. It tells you what's happening. It doesn't tell you how to change the behaviors that are causing it.

For that, you need the management infrastructure to actually drive accountability and behavior change across your team.

More likely than not, you know what your employees are responsible for. You know what they "owe" the business. But do you have clear, structured expectations for what your managers owe the employees? And what the managers owe the business in terms of managing those employees against targets?

If you have managers in place but your team is still coming to you for every decision, you're missing what I call the "missing middle" - the management accountability layer that connects your strategy at the top to your delivery at the bottom.

That's the next email. I'm going to tie everything we've covered - capacity, churn, all of it -together into an actionable framework you can start implementing this week. Which, by the way, is exactly what 55% of you told me you wanted.

In the meantime - if you want to figure out whether churn is the thing holding you back, or if you should just be focused on doubling your top-line sales, book a call here.

I have a specific process for diagnosing which one it is.

Nick

The poll results are in!

The data is very interesting. Some of it confirmed what I expected and some of it surprised me.

I'm going to share the findings over the next few emails rather than dump everything at once, because each category deserves its own conversation. There's real insight hiding in these numbers and I want to do it justice.

Quick overview before we go deep on the first one:

Almost 40% of you are doing over $1M a year in revenue, which means the majority of the problems on this list are scaling problems. You've figured out how to get clients. You haven't figured out how to make the economics work as the business gets bigger.

The number one pain point, at 38.5%, was growth plateau. Nearly 4 in 10 of you feel stuck and can't figure out why. I have thoughts on this that I'll share in a later email - because I think most of you who picked "growth plateau" have a different problem underneath that you haven't identified yet. More on that soon.

57% of you are not tracking churn by individual account manager. 55% want tactical frameworks over everything else. And 53% have never worked with an agency consultant before.

Those are the headlines. Now let's get into the first deep dive.

Capacity forecasting:

47% of you have a capacity forecast that's updated regularly. 27% have something rough or outdated. And 27% have nothing at all.

So about half the list is in a decent spot and the other half is making resourcing decisions based on whatever their team tells them, which - and I say this with love - is almost always wrong.

There's research showing that people don't self-recognize available capacity until they drop below 40% busyness. Meaning someone working at 55% utilization will genuinely tell you they're slammed. They just can't feel the gap. And if you don't have a capacity forecast to check against, you take them at their word, you hire someone you don't need, and your profit margin drops for a problem that didn't exist.

So here's how to think about this depending on where you are.

If you're not tracking capacity at all and you're not time tracking either, the fastest way to get visibility is through DLER - Direct Labor Efficiency Ratio. Take the revenue that a department, pod, or the company as a whole manages. Divide it by the total salary cost of the billable staff in that group. That gives you a ratio. Your target is 3.33x or greater if your team is based in the US, UK, or Australia. If you're outsourcing to lower-cost regions, your target should be 4x to 5x or higher, because the labor costs are lower so the leverage ratio needs to be higher to maintain the same margin.

If your DLER is below 3.33, you almost certainly have a capacity problem, an efficiency problem, or both - and you definitely should not be hiring until you figure out which one it is.

If you are time tracking, here are the benchmarks I use across every agency I work with. Frontline billable staff should be at 80-90% billable utilization. The difference between 80% and 90% comes down to how structured their days are and how much project management support they have. If a project manager is assigning specific work blocks - four hours on this, four hours on that — people can hit 90%. If they're self-managing their time with less structure, 80% is more realistic.

Managers are different. If they're managing 3-4 people, 65% billable is reasonable. If they're managing 5-8 people, you're looking at mid-40s to 50%. Managing people takes real time. If your managers are at 80% billable, they're not managing - they're doing the work themselves and the management isn't happening.

Directors should be between 0% and 35% billable depending on the scope of their role. Account directors tend to be higher on that scale because client interaction counts as billable time and they're doing a lot of it.

If your frontline billable staff is consistently under 80%, something is wrong. Either the work isn't structured well enough, the team doesn't have clear enough direction, or there's a skills gap that's causing things to take longer than they should. Any of those is fixable. But you can't fix what you can't see.

If you're in the 47% already tracking capacity regularly, the question I'd ask you is: are you using it to make decisions? Because having a capacity forecast and managing against a capacity forecast are very different things. The forecast should be what settles the "we need to hire" conversation once and for all. If the DLER says there's room and the utilization data confirms it, the answer is no, we don't need to hire. We need to fill the capacity we already have.

Capacity forecasting on its own only tells you half the story.

You can have perfect capacity data and still bleed profit if you don't know which account managers are retaining clients and which ones are losing them. It doesn't matter how efficiently you deploy your team if the clients they're deployed against are walking out the door.

That's the next email. We're going to get into churn tracking by account manager - who's doing it, who's not, and why the agencies that aren't are almost certainly leaving six figures on the table without knowing it.

If you want to run this for your own agency right now, I built a capacity calculator you can use. Just make a copy, plug in your numbers, and it'll show you exactly where you stand.

Here's the link →

Nick

So I just realised the other day that I haven't really sat down to tell you what Agency Acquisitions is, or why I built it.

So let me do that now.

The mission is simple: help 100 agencies scale to $10M+ or reach $1M in profit per year.

I use those numbers interchangeably because they represent the same thing - an agency that's working properly.

The vision is that every agency runs off what I call the Agency Economics operational model.

It's a way of thinking about and running an agency that I've developed over 15+ years of building, scaling, and acquiring them.

Dashboards, people management, client retention, capacity planning. culture & high performance - all of it interconnected, all of it designed to maximize profit while minimizing the chaos that makes most agency owners miserable.

The purpose of Agency Acquisitions is two things, held together:

First: To help agency owners get the most from their hard work.

I've seen too many founders pour years of their life into a business and end up with nothing to show for it. Working 60-hour weeks, stressed about payroll, taking home less than they'd make at a job. That's not entrepreneurship. That's self-imposed suffering.

Second: To create work environments for agency employees where they get what they deserve.

This one is personal for me.

I've been the employee who worked hard and got nothing on the back end. I know what it feels like to deliver results and watch someone else take the credit, or worse, watch the company squander the gains through poor management. I hate office politics. I believe deeply that if you put in the work and you get results, you should be rewarded for it.

When agencies become more profitable, they can pay their people more. The employees who do the work get compensated fairly. The vendors get paid on time. Everyone wins.

But that can only happen if the agency is making money. You can't pay people what they deserve if there's nothing left after the bills.

So these two purposes aren't separate - they're the same thing. Profitable agencies create environments where people thrive. Struggling agencies create environments where everyone suffers, owner and employee alike.

I'm not interested in helping someone build a $10M agency that makes the owner miserable and underpays the team.

I'm interested in building agencies where everyone involved - owner, leadership, employees, clients - is getting a fair deal.

That requires profit.

And profit requires doing the hard operational work that most people avoid.

We operate on a principle I call 51/49. It means we always try to give more than we receive.

In practice, that means I'm not trying to extract maximum value from every interaction. I'd rather over-deliver and build something that lasts than squeeze every dollar and burn the relationship.

It also means I'll tell you the hard thing, even if it's uncomfortable. If your agency isn't ready to work with us, I'll say so. If your problem isn't something I can help with, I'll point you elsewhere. Radical truth and transparency - that's the only way this works.

One more reason I do this, despite running (and having sold) multiple agencies, is the simple fact that I just love this stuff.

I love figuring out puzzles, specifically, the agency's puzzle of people and systems.

And when we can help an agency make more money (like Wallop, who came to us at -10% profit and went to a peak of 46.7%. They've had months where they cleared over $300K in profit): the owners can pay their people more and help their people live better lives, it makes me feel good.

That’s all it’s about really.

Nick

P.S.

Agency owner working 65 hours a week for 3 years straight after quitting his 40 hours a week corporate job:

P.P.S.

In case you missed it, I wanted to link my latest YouTube video below 👇️ 

Just a reminder that the aggregate data from last weeks polls is coming tomorrow. You'll be able to see exactly where you stack up against everyone else on this list!

Every 3 to 5 years, the agency game fundamentally changes. And every time it changes, the agencies that stay attached to the old model die out while the ones who understand the shift early grow at a pace that looks unfair from the outside.

We're in one of those shifts right now. And this one's moving faster than any of the previous ones.

Let me walk you through the evolution these things are cyclical, and understanding where we've been is the only way to understand where we're going.

In the early 2000s, agencies were built on relationships and strategy. Customer acquisition was almost entirely in-person. Field sales, events, networking. Strategy was the product because it was genuinely hard to pivot tactics quickly in a pre-digital world. You couldn't just spin up a new campaign overnight. So the value was in the thinking, and the delivery was almost secondary to the relationship.

Around 2005, the full-service model emerged. Agencies started bolting digital onto their existing capabilities, but most of them were still heavily focused on creative and offline advertising because that's what worked. Strategy still mattered, but the emphasis started shifting toward tactics as digital channels opened up and execution became more measurable.

That model stayed remarkably stable for a very long time.

Then 2020 happened and everything accelerated.

By 2022, we'd fully entered the niche agency retainer model. Digital-first, location-independent, hyper-specialized. Before this period, only about 20% of agencies were niched into a specialty.

Today that number is closer to 80%. It completely flipped. And the reason is simple - clients became willing to work with people who weren't sitting across from them once a month. Geography stopped mattering, which meant expertise could matter more.

The interesting thing about this era is if you knew your niche inside and out, the strategic layer was already embedded in how you delivered. You didn't need to reinvent it for every client. This is what gave rise to real productization. Not the fake version where you package your services and accidentally make less money. The real version where you deliver a standardized result more efficiently than custom work and capture the margin upside.

2023 brought the digital product agency model. Content creators as the primary acquisition channel. Community-driven. Value-based pricing instead of hourly billing. The key measure became dollars per hour - not how many hours you could sell, but how much value you could create per hour spent.

2024 was when hybrid agencies started emerging in a serious way. Done-for-you agency services combined with done-with-you coaching and consulting. And this is where things get interesting because most people saw this as agencies going downmarket. It was actually the opposite. The consulting side often commanded $500 to $1,000+ per hour for access to senior expertise, while the done-for-you side handled the execution.

The hybrid model expanded the total addressable market. When you only offer done-for-you services, you're immediately cutting out every company whose CFO won't approve outsourcing, every marketing director who wants to keep capabilities in-house, every business that would rather build than buy. That's 20 to 50% of your potential market, gone. Add a consulting offer and suddenly you can serve all of them - the ones who want you to do it, and the ones who want you to teach their team how to do it. Same expertise, dramatically larger pool of buyers.

Which brings us to 2026 and this is where it gets wild.

The agencies that will dominate from here forward are going to look different from anything we've seen before. Content creation is going to remain the primary acquisition channel, but it's going to become the only moat.

Because if AI can do something, that thing is no longer worth anything to the general market. If a client can type a prompt into Claude or ChatGPT and get the answer, they're not paying you for that answer. Full stop. The only thing that holds economic value from here is what you can do on top of what AI already knows how to do. Your proprietary insights. Your niche-specific knowledge. The strategic patterns you've identified from working with hundreds of clients that no general language model has access to.

This is why I think the smartest agencies right now are building their own data warehouses. I mean recording everything. Client meetings, internal strategy sessions, what the inputs looked like, what the outputs looked like, what worked, what didn't, why. Just folders of institutional knowledge that currently lives in people's heads and nowhere else.

Because as AI continues to get better, the agencies that have captured their proprietary knowledge in a structured way will be able to train their own small language models - private models trained on their specific niche expertise. Models that can do the kind of work they do, at the quality level they do it, in a way that general AI simply cannot replicate because it doesn't have the data.

If Claude or ChatGPT can do it, it's not worth anything anymore. So the question becomes: what can your agency do that they can't? And how are you capturing that knowledge right now so you can leverage it as the technology matures?

The agencies that figure this out first are going to have 40%+ margins while their competitors struggle at 15%. They'll be small, fast, systemized operations that outperform big, slow, legacy agencies because the leverage has finally shifted to the operators who understand what's happening.

Your personal brand is your acquisition machine. Your knowledge is your differentiation. Your systems are your moat. And the data capture built into those systems is what funds the AI multiplier that's coming whether you're ready for it or not.

This is the moment to build. Not next year. Now.

Speaking of which…

I'm speaking at the 8 Figure Agency Summit on the 31st March.

It’s a free 3-day virtual event, about 20 agency founders and operators sharing the playbooks behind scaling past the ceilings most agencies never break through.

Starts Tuesday and runs until Thursday.

Grab a ticket here: https://go.sparksummits.com/8-figure-agency-summit-2026

Nick