Your agency is growing, and you're seeing more and more clients coming through the door. But as your agency expands and brings on more projects, it's important to stay focused on your finances.
While it may seem like a good thing that you're bringing in more projects and revenue, there are actually two things you need to watch out for when it comes to your financials once you start scaling your agency: shrinking profit margins and margin bleed.
In this episode, Chris and I talk about how to be more intentional with your finances when scaling your agency, increasing profit margins, and understanding where you need to get rid of expense bloat or margin bleed. Chris also shares how he started in the agency space and was able to grow Better Way CPA into a distributed firm with an international team.
This Cast Covers:
- Where most agencies struggle in managing their profit margins (03:07)
- Two things to watch out for in your finances once you start scaling your agency: shrinking profit margins and margin bleed
- Is there a common pricing model that Chris likes and common mistakes most agencies make when it comes to pricing (06:24)
- Why not enough people understand the importance of investing in talent (07:43)
- The one thing that might be preventing you from scaling (08:41)
- Reasons why Chris recommends hiring a higher talent who’s more senior than you (09:08)
- How Chris got caught up in the agency space and why he chose to work with marketing agencies specifically (12:27)
- Chris gives the typical net profit margin for agencies he’s seeing today (15:38)
- Why you should be sounding the alarm a.k.a. a bit worried if your net profit margin sinks below 15% (16:25)
- What can agencies start doing to see a big difference in profitability and boost that net profit margin (17:18)
- How to get rid of “expense bloat” (19:44)
- Evaluating projects and clients you bring on can definitely help you fix your top-line revenue number (21:08)
- How Chris grew Better Way CPA through inbound, referrals, and organic means (24:34)
- What’s on the horizon for marketing agencies and how can you prepare for the shift in the agency landscape (25:46)
- The first place to look at when deciding on cutting off expenses (27:53)
- Chris talks about the Data-Driven Marketing Agency e-book (30:23)
- The importance of analyzing both financial and non-financial data in every aspect of the business (30:53)