Common Agency Pitfalls You Might Be Facing (And Why Your Goals Can Save Your Business)


The road to success is full of obstacles. Adjusting your agency’s goals and strategies can help you overcome them.


A Los Angeles-based marketing agency hit a brick wall in its operations. Their sales were declining while costs were skyrocketing. These negative trends practically crippled the agency, resulting in negative cash flow and diminished morale.

The management couldn’t think of a way out of this situation and was utterly desperate. They couldn’t grapple with these predicaments and were on the brink of shutting down their agency.

Fortunately, they weren't ready to give up just yet. They realized the need for experienced financial leadership, which is why they turned to Creative Agency Success.

And they never looked back.

We took immediate action to bail out the agency by completing a time study and streamlining their processes. Also, we restructured their debt and performed proper budgeting. All of which led to refined marketing operations that delivered an extraordinary gross revenue increase. On top of that, we helped them solve their cash flow issues, declining sales, and process inefficiencies.

The focus shifted to profitability enhancement. Through savvy budgeting optimization and project costing, the agency raised its profits by a staggering 36%.

The overall effect was incredible – a 20x increase in ROI and a 613% rise in net profit. And all it took to overcome the challenges was my financial knowledge and guidance.

This isn’t the only agency that encountered these issues. Many businesses face them at every stage, and this article will present a prevention strategy.


97% of Agencies Don’t Break the $1 Million Per Year Mark


Most agencies follow a common path after launch.

When the owner first starts their agency, they’re thrilled about the journey. They’re eager to learn what the next stage involves and how it can help them grow their operations.

The agency owner is energized, motivated, and believes nothing can get in their way.

But as they advance on their road trip to success, they feel they’ve been in the driver’s seat for too long. Soon enough, their energy changes, discomfort sets in, and they’re anxious to get out of the car. They begin to think about making pit stops – doing other things rather than just running their agency.

Huge setbacks arise at this point because the owner stops moving forward. Their enthusiasm fades away, which is one of the key reasons why 97% of agencies don’t pass the $1 million mark. They never break through this glass ceiling, killing their motivation.


                                 Plateauing Is Cyclical


As mentioned, most agencies never hit the million-dollar mark. However, the ones that make it past this point are reinvigorated. The owner rediscovers their motivation, and they start smooth sailing again.

Still, this doesn’t mean the road trip is free from obstacles from this point. Plateauing is cyclical after all, and the next plateau usually takes place at the $3-$5 million mark.

At that point, the owner needs to analyze their service offerings and reimagine their delivery. They may even want to add additional service lines, verticals or expand on their agency’s specialization. Another option is to recruit people with extra financial resources.

The solution helps them figure out their immediate needs and advance their strategies. Then, they can push forward until they hit another plateau, which is generally just before they reach $10 million.

From there, the numbers grow from $20 to $30 million, and may even double moving forward. That’s how agencies normally function and understanding this is paramount to making headway.


The Power of Goals


What’s the one thing all agencies who make it past the $1 million mark have in common?

They establish clear goals and know the next step.

These are crucial to succeeding as an agency owner. You need to map out your goals to allow you to determine what your business life will look like in the upcoming period.

Your roadmap should help you envisage how to accomplish your agency’s goals and build them into quantitative figures. This way, you can determine whether you’ve achieved them or not, enabling you to adjust your strategies further.

Breaking down your goals is another critical aspect. You need to have tiny, bite-sized chunks of what you plan to accomplish. This knowledge lets you identify vital short-term activities and allocate your agency’s resources appropriately.

Several tools can help you in setting and visualizing your goals. Many agencies opt for Gantt and dependency charts, as they can tell them what they need to do next. These tools help clarify their agency’s roadmap, allowing them to designate the role of each team member and whether they need to recruit new employees.

In addition, successful agency owners avoid one gigantic mistake – relying on social media for advice to meet their goals. It contains so much information, and it’s easy to take the wrong direction if you follow their advice blindly.

Instead of listening to online gurus, you need to focus on your agency only. Social media activists often provide generic advice that doesn’t offer any value. It doesn’t consider the specifics of your agency, such as time and financial limitations.

Analyzing your agency’s specific needs and setting your goals is much more effective. It tells you what you need to do next to realize your plans.

This is also the biggest difference between successful and unsuccessful agencies.

The owners who know what comes next will always have their north star. They understand their roadmap, making them more likely to attain their goals and break through their plateaus.


Follow the Tried-and-True Formula for Success


Running an agency isn’t easy, especially in today’s competitive market. Your initial struggles may discourage you from carrying on, the costs may be too high, and you may not immediately find a way to turn things around.

But as our experience with the Los Angeles-based agency proves, it’s never too late to make a comeback.

You first need to understand that a vast majority of agencies struggle to remain profitable and that business growth is cyclical. The next step is to set goals, break them down, and strive toward them with efficient strategies.

If you want to learn more about improving your operations, contact us to schedule a profitability accelerator call.


Apply Today to our Accelerator Program!