Growing Your Agency Just To Break Even
In today's video I want to share a common mistake among agency owners and service providers that happens often without them even realizing it.
It’s usually the very thing preventing people from hitting their desired goals.
I’ve been guilty of it.
You might too.
If you don’t do something about it, it will eventually take you out of the game…
Unless you give up before that.
Transcript / MP3
I wanted to hop on here and share a quick story. Uh, that came from a conversation I had with a client of ours that dawned on me that the mistake call it for the lack of a better word that she's making is something that catches a lot of agency owners, um, kind of in an unexpected way. And I've been guilty of this. And I see, I see it time and time again with agency owners that are really trying to grow. And they're so focused on growth that they actually lose sight of where they're going and they start playing this game, this dangerous game that leads them in this kind of on a unknowingly, on a path that isn't even going to help them get to where they want to be. And the kind of the title of this talk is what I'm going to call growing just to break even now. ...
I don't know if that resonates with you, but the story goes like this. I'm talking with an agency agency owner, a very successful agency, uh, you know, 20 plus team members. Um, you know, they're doing seven figures in revenue. A lot of their work is building websites, doing marketing plans and strategy. And they have, you know, working with us, launched a training component of their agency, and they really want to evolve into more of a kind of consulting and training training business where they're kind of moving away from the, you know, getting paid for labor and, you know, charging time for money. And the kind of, as we were chatting about this, what came up was the fact that they had a five year plan to transition from kind of done for you services into the coaching and consulting, like from a vision perspective, that's where the management team wanted to go.
And even the employer, many of the employees were bought in on that mission. And just recently, one of those employees called out saying, Hey, look like we're three years into this five year plan. And we're still doing all of the stuff that we said, we're trying to escape, like what's going on. And in kind of talking about it, you know, we went over revenue, we went over kind of the expenses and things like that. And w what it sounded like was that they were chasing specific projects, again, not selling training or consulting, but selling their historical web development services and, you know, done for you marketing plans. And when we really broke it down, when we really peel back the onion, what it felt like was happening was that the targets, they were setting, the revenue goals they had were literally just to pay the bills.
We're literally just to pay the bills. So what that means is every month they're setting a quota, Hey, we need this many clients. We need to get these many projects in at this amount. And all of those numbers were really geared towards just breaking even so you could see, hopefully you could see, and if you were talking to this person, you would feel it, there was a lot of frustration and it didn't really seem like they knew where that frustration and struggle was coming from. And the moral of the story is they're in a game that is now like the rig to lose. They have to make money, a certain amount of money, and it was a good amount of money just to cover overhead. And that led them down the path of chasing projects that they had historically done while keeping their eye off of the revenue streams that they really wanted to focus on.
It was almost as if they were handcuffed by the business that they had built. And for the last handful of years, the game had been, let's go get these types of projects. And these types of deals when these types of RFPs, so that we can cover the overhead and the office and all of these things that we had, which is a dangerous game to play. And we've been trapped there too. And you think that the only solution is to just get more business, but that's not the only path. And it reminded me of a quote, um, from, uh, Robert Highland. And it says in the absence of clearly defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it. In the absence of clearly defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it.
I don't know if that resonates with you, but all of the actions of this person and their team did not align with the goals and the vision of where they want it to go yet. They were confused as to why they weren't getting their three years into a five year plan to make this transformation yet they aren't selling their new training program three years into wanting to make this plan actually finally created the training program and when things get tight and they need to make moves, they go to sell the old, Hey, we're going to go run a Facebook ad campaign to get clients for this website project or for more website projects. So we're going to go build a list of prospects for a service that we don't even want to be offering in 90 days from now. And in our five year vision, we're not even doing at all.
Do you see how that's actually a counter productive use of their time and their money and their effort they're enslaved by it, they're trapped. It's become such a routine to go get clients and submit RFPs to build these websites and do all of the things that they're used to doing over and over and over and over again, because they haven't sat there and said, wait, if our goal is to get X number of clients into our new training and consulting programs, why don't we design a plan and orient our team and our energy and our effort towards actually closing clients for the thing that we want to sell. And what's amazing is when you look at the profitability per, per sale on a website on this, on the website projects, you know, traditional what the, the traditional things that they would sell, they were billing at 150 an hour. But when you look at what they would be making, if they were selling their coaching and consulting, they'd be making a thousand dollars an hour. So why does it make any sense? And sometimes you have to slap some people around to, you have to make some sort of change. Something has to change your actions have to change what you're focused on and where you spend your time and your money. And your effort has to change for you to hit the actual goals that you have.
It's very easy to become trapped by the old way of doing things. And I say the old is just the way that you have been doing them, the way that you have been playing the game, just because you're an agency does not mean that the only way you can make money is by doing done for you services. The only way that you can make money is by selling your capacity, your time. That is not true. We have plenty of clients that have transitioned completely out of done for you, work into training, coaching, workshops, consulting, digital courses, and programs. A combination of those things allow them to actually make more money with less effort without sacrificing client results. But doesn't come with out having to make hard decisions. When we had our agency building out funnels and things like that, we had to let go of people that didn't fit the new model.
Did we like firing people? No. Do we like letting people go? No, that's not what we want to do. We don't want to endanger other people, but guess what? Those people found better roles, things that better aligned with their vision. And sometimes I had done a previous YouTube video on this. Sometimes you have to kill the old in order for the new to be born. Right? You have to stop doing some of the things that you just have done, always just because you've always done them. That doesn't mean they need to keep being done that way. One of my mentors, Brad, I remember he's like our sales targets are literally designed so that we can afford to pay for our lease and all of these employees that we have, and we're not even like happy doing it. So each and every month, we're striving for these goals really just to break even.
And we're not even having a good time. Yeah. The numbers of the number of revenue looks good, but we're all miserable. So you need to ask yourself like, are you just chasing and doing the same things over and over and over again, because that's the way they've always been done. That's probably not going to lead you to where you want to get to. So you got to make sure that you have clear goals. Because again, in the absence of clearly defined goals, we become strangely loyal, blindly loyal to performing the daily trivia, launching Facebook ad campaigns, to get the wrong types of clients. And you get enslaved by those actions and those behaviors.
I'm not saying that it's going to be easy. I'm not saying that it's going to not hurt. In fact, some of the decisions many of you in this group have to make in order to take your business and your life to the next level are going to be very uncomfortable. Letting people go sacrificing short term revenue for longterm gain, working a little bit harder right now to have a better schedule and a better lifestyle in 12 to 20, 24 months from now, there's going to have to be a little bit of sacrifice made most likely. And the longer that you try to balance the two, and because you're afraid of the risk of doing what you know, you need to do to get to where you want to go, you're going to continue to be in the exact same spot. So this is my real talk view.
So I can get real close up and personal with you. And just say, you have to decide to make a change. You have to decide to change. If you look at the origins of the word decide side actually means to kill. You have to stop doing something in order to move forward and take action towards the right things. If you say you want something and your actions do not align with the thing that you say you want, I would tell you, point blank. You do not want those things. You want to want those things. And that makes you feel good right now. But in 12 to 18 months, when you don't have them, or you're not closer, it's likely going to be because you didn't decide to change something. And that probably means for many of you stopping doing something that you've been doing, that's gotten you to where you're at right now and doing something different, doing it a different way, changing your business model, changing your approach, narrowing down, who you serve, going from selling all of the things to the one thing. Will it be uncomfortable? Yes, but nothing that is worth doing is going to be comfortable. So I'll just message finds you. Well today guys, happy Thursday. And depending upon when you're watching this happy, whatever day you're watching this, and you just drop a little real talk on you today, but hopefully you found this useful and helpful depending upon where you're at right now in your business. Nothing but love for you guys. Let me know how I can tell [inaudible].