Top 5 things I did to make my small agency very profitable
1. Charged more money. This sounds more complicated than it actually is. Most people perceive their price as the “top end” of what they feel they can charge. The truth is most people are undercharging by 60-300%. That is a scary number to think about. What if you are charging ⅓ of what people would be willing to pay for your work? To solve this you need to think about the outcome that your service provides and find a price point that fits inside that value. You can also add value to the service that doesn’t cost anything (for me that is a reporting dashboard and sending video campaign updates)
2. Narrowed down what I offered and got really good at it. When I first started my company I wanted to be everything to everyone. What a huge mistake. I would find contractors who could execute the work that I did not understand and it cost me a ton (considering I did not know what it was supposed to look like). When I finally committed to strictly running lead generation campaigns for certain types of businesses my stress and costs went way down and my profits went up.
3. Determined my margins ahead of outsourcing. I did not go to business school – nor did I have a good framework for how a business was supposed to work. There are so many costs of operating a company that I never considered (paying for experts, taxes, software, etc). When I first started I was so focused on making money that I ignored these costs and they crept up on me quickly. Every unplanned/ignored cost makes a huge dent in your profitability. So, it is best to work backward from what you want to make – factor in costs and margins and then charge according to your best-case scenario.
4. Made my freelancer's lives easier by creating SOP‘s and customer excellence protocols. Nothing cuts into your time and profit more than going back and forth with your team/freelancers about something that could have been done right the first time (especially if you pay hourly). When I first started my business I thought that everyone else was doing a bad job – I would get a project draft back and it was not close to my vision. As it turns out, it was all my fault. I didn’t have operation procedures and creative briefs that expressed exactly what I was expecting from them. How would they know this information on their own? I was very naive. Once I invested the time into building these protocols the work flowed at an incredible pace and the quality lifted 10x. Ultimately, this invested time created a huge lift in my profits.
5. Limited my expectations while making my requirements known. This is less of a tactical aspect and more about mindset. When you begin to outsource tasks there is a lot of anxiety about the quality and performance of the work. The work will never be EXACTLY what you want – it’s not possible. But, if you put good systems in place and make sure that everyone understands what you want you can be assured that you will have the best-case scenario. Business is never perfect and there are constant compromises that need to be made. The most information you take out of your brain and document into systems, the fewer compromises you will need to make.
Key takeaways Create a system for EVERYTHING Be hyper-aware of your costs Determine what you want to make before pricing your service and choosing outsourced partners