114: How to Scale from $200K to $1M With An Agency
Have you ever wondered what it takes to grow an agency from $200K to $1M? You may be wondering: what do I need to do when it comes to marketing, sales and operations? What should I prioritize first?
While there isn’t a one-size fits all approach to every business, this episode breaks down the 5 Operational Components that you need to have in place to get your agency to $1M+. It also goes in depth with what’s needed specifically at different revenue tiers: $100K – $300K, $300K – $600K and $600K – $1M.
If you want an overview of how to scale an agency and specific guidance based on where your agency is at right now, you won’t want to miss this episode!
What’s in this episode:
- The 5 Operational components you need to scale to $1M
- What you need to implement at different Revenue Markers
- How your Marketing changes as you grow your agency
Links:
Free Training: 3 Reasons Why You’re An Agency Owner Who’s Still Doing Client Work
$1M+ Agency looking for support? Email us: hi@nicolejacksonmiller.com
Watch Episode 114:
EPISODE 114 TRANSCRIPT:
Hey everyone. Nicole here and welcome back to the show. I am really looking forward to this conversation about how to scale from $200K per year to $1M per year with an agency model. So this is something that we haven’t really talked about in depth on the podcast in this way, and I want to start with a disclaimer that there isn’t a one size fits all approach to this, and different agencies are going to have different needs at different times.
So for the purposes of this conversation, I’m going to be generalizing a bit, but I really want to emphasize the importance of getting the support that you need based on your agency in your industry with your very specific values and the way that you operate so that you can take this advice and be able to customize it to your business.
This is what I do with my clients inside of my AGENCY program and other programs that I have. It’s taking these frameworks and applying them. And so there’s a difference between learning and application. And so it is important that you do customize these based on your business.
Okay. Now that that’s out of the way, I wanna talk about the scope of this conversation.
So I support agency owners with their operations primarily, and I don’t go too far in depth into market strategy and sales strategy. I’m very much on the operational side of the business, operational strategy and implementation.
However, if you are growing an agency from $200K to $1M dollars, you will definitely need to have at certain points a marketing strategy and sales strategy in place. So it may come up during this conversation and just know that my primary focus is on that operational side.
So let’s talk about the five main components of being able to grow from $200K to $1M dollars. So we’re gonna talk about these five components, and then we’re going to actually break down based on revenue, what you may need to focus on at different times.
Now, I say may need to focus on, because like I mentioned before, this does differ based on different businesses and the strengths and preferences of the business leader or leaders and the implementation team and the different offerings or the way that you offer your services. So I’ll just say that one more time in case you didn’t catch it the first time. This definitely needs to be customized based on your business.
So the five operational components to be able to scale your operations from $200K to $1M are the following.
The first are your Foundations, the second is your Team, the third is your Management, the fourth is your Leadership, and the fifth is your Growth and Growth Strategies.
So let’s dive into each of these before we move on to what you may need to be focusing on at different revenue levels inside of your business.
So Foundations I talk a lot about on this podcast.
I’m not going to dive too much into this because this is like a little bit more of an advanced conversation. If you need more information on Agency Foundations, we’re going to link in the show notes the links to different episodes where I talk about your Foundations more in detail. So your Foundations are really everything that your agency is built upon.
And if your Foundations aren’t updated regularly, then you are going to experience different symptoms that come up at different times. And if you’re not really looking for that root cause, which is often the Foundations, you may be fixing a symptom and finding that it keeps showing up time and time.
So your Foundations are making sure that you are serving ideal clients for your agency. No, I said for your agency, not for you as the solo service provider that maybe you once were, but for your agency and that that ideal client has evolved as you have grown. Whether that be from $200K to $500K or $500K to $1M, that ideal client needs to evolve as your agency delivers to more and more clients, gets more experience, and really narrows in on who your agency best serves.
If you are expanding your ideal client base, then it’s also important for you to add to your client base and make sure that the rest of your Foundations are set up to serve that ideal client.
So what are the rest of the Foundations?
We have your Scalable Offers, so making sure that your offerings, your agency offerings are serving your ideal clients. Your regularly audited ideal.
Making sure that your Delivery Process is updated based on team experience and your client experience.
And then making sure your Numbers, your Financials are updated based on where you are inside of your business. Your Financials are going to look different if you are going from $100K to $200K.
If you’re going from $200K to $500K. If you’re going from $600K to $1M+. Your Financials and the way that you really budget and plan for how you’re spending your money and where you’re spending your money, it’s going to shift. So you wanna make sure that those all of those Foundations are shifting with your business as it grows.
The next one is Team. So when it comes to your team taking a look at: are the team members that you have already delegated client work to actually owning their work, and what else needs to either come off of your plate or maybe if you’re at a position in your business where you have different different teams or departments and you have different managers of those departments, perhaps there is somebody on your team that has become the bottleneck and there needs to be a shift in what they’re doing and what they’re responsible for and potentially bringing somebody else in to support them. And really looking at this holistically.
So the Team portion of this involves who is doing what on your team? Are they owning the role on your team? And how is everyone’s capacity? What does that look like? And making sure that your team is taking full ownership over their roles.
So then we go into Management. Management and Team go very much hand in hand as you can probably imagine. So Management is really taking a look at your organizational chart, who is on your team and what needs to shift for you to get to the next level based on where you are between $200K and $1M or beyond, your org chart is going to shift. Because if you are making more revenue, you’re serving more clients, and that’s going to require different team configurations. So making sure that your team configurations are up to date, not just where you are in this very moment, but thinking ahead maybe six months a year, depending on where you are. Sometimes it’s three months to make sure that your team configuration is set up to not just serve and support the clients you have right now, but if you have projections of growing over the next few months that you’re actually implementing those Team growth strategies and Management strategies now, so that you’re prepared in three months to be able to take on that additional business.
Then we have Leadership. So Leadership is typically when an agency starts to add in a leadership layer into the business. So you have different departments within the business and you have different leaders or managers within those departments. And so all of these changes really require you as a business owner to be able to shift your identity as well as you are shifting from managing implementers, let’s say, when you’re first starting to delegate client work, to then leading and managing your managers to then leading and managing a leadership team. So this is a huge change in not just your company configuration, but also how you are leading within the organization.
And then we have Growth Strategies. So once you get to a point where you have more time, a lot of business owners feel like their strengths are being able to come up with ideas and see new opportunities. And sometimes they’re like when can I implement this? I wanna implement this now. And while yes, there is definitely a benefit in moving forward and experimenting and see what, seeing what sticks and what doesn’t, it’s important for you to be able to get to a certain capacity level within your business to be able to actually focus on experimenting with some of these new ideas. And so I always usually recommend to clients that they get their current offers into a place that’s scalable, that’s set up where it’s really running without them, so that they have the capacity to be able to focus on new business ideas.
Now, that doesn’t mean that everything has to be perfect before you introduce something new because nothing will ever be perfect, but it’s making sure that the right operations are in place to support it, and that when challenges do come up, there’s a process and somebody responsible for owning those challenges and figuring out those solutions. That’s not always you, right? Because in order to give new growth opportunities really just the time and attention that they need to be able to thrive, it’s going to need your time and attention. So we wanna make sure that you’ve set up the rest of your business to be able to give those ideas the attention that they deserve.
Okay, so that’s a very high level overview of the five components. We can get much more granular into each of these areas, but hopefully that has provided you with just like an overall idea of what’s needed to be able to scale. We talked about foundations, we talked about team, management, leadership, and growth.
Now let’s take a look at from a revenue perspective, what I’ve typically seen agency owners do when it comes to the needs of the business. Now, again, super generalizations. For each of these I can think of, well, but this client actually Was doing really well and they did things a little bit different. So I could do that for forever and ever and ever, but again, for the purposes of this conversation, we are just going to generalize.
So let’s start from the very beginning. When you were first starting your business and going from, let’s say, $0K, no money, to $100K in annual revenue, you could really do this without a team or marketing or operations.
You can. Not all companies do, but usually, the companies that I work with have done this. Before joining my program, I really want to see that people are at least at the $100K to $200K mark inside of their agency. And it’s not that their agency won’t ever see a dip from that because there is definitely ebbs and flows, but the reason why, revenue is not everything for sure, but there is a a it is an indicator, I’ll call it an indicator.
So, what does it mean if you’re able to go from, from no money to having $100K in your business without a team, or really a lot of marketing or operations in place? It means that you have a service that’s in demand that people want. And I think you can definitely do this past a hundred thousand dollars as well, but $100K is really a good marker and you really need to have that in order to be able to continue to grow that agency model. So for companies that I have seen who start agencies before they’ve hit the $100K per year mark, they typically have other funding or investors.
So depending on where you’re at, like some, most of the companies I work with don’t have investors and maybe they have some funds and savings which is fine. But most are relying on that reccurring revenue to be able to continue to grow. So I really like to see people at that $100K mark. And, you can do this without a team. You can do this without like really solid operations in place. And you can do this without marketing too. I’m not saying that you should, but you totally can.
Typically when people are, at this point, they’re 100% involved in client work, right? Because they’re doing it without a team. They’re relying mostly on referrals, which is great. And some people feel bad about this, but I don’t think you should, because if people are constantly coming to you and you don’t have a problem bringing new leads into the business, then why would you focus on that? You should be focusing on delivering your services.
And operational systems are helpful, but they’re set up for one on one versus a team. Okay. So like having a project plan and having tasks and having a project management system is all very helpful when you are doing it yourself, but that doesn’t mean that those operational systems will work with a team, typically, they need to be revamped. Okay.
So the next phase going from a $100K to about $300K. So at this point, based on the services that you’re offering, you typically need to have an implementation team in place. Maybe they are doing part of the work and you’re doing part of the work.
That could look like you taking on part of the delivery process. So let’s say like strategy calls and client calls and check-ins and having your team do, and depending on your agency, do whatever your agency actually implements.
So if it’s public relations, it’s, the person who is going out and maybe pitching different forms of media. This is where it’s also typically when you get to that $200K – $300K mark, you’ll be introducing a manager into the business to help manage clients and the team. But it’s usually likely that the business owner is still involved in things like reviews and approvals to make sure the standards of the company are being met and that clients are receiving that high quality work. And this is where I really recommend you shift your operations from being 1:1 to one to many. So like one client to multiple team members.
Another thing is that you, like I’ve seen some people again, still do this without having a firm marketing strategy in place. And I’ve seen others that do have a marketing strategy in place, but mostly I found that people are relying on renewals and referrals., and if they’re doing marketing, it’s like adding to their presence, but it’s not necessarily their main source of leads.
And at this point, like I said before, when it comes to your involvement as a business owner, maybe you’re involved in like 40 to 60% of client work. That can definitely range. And you’ve started implementing those operational systems, but maybe they’re not like really great.
And then from $300K to $600K, you definitely need an implementation team. You need a manager to be managing the team and clients, and then really having those operational tools and systems in place.
So putting in your organizational map, making sure that you’re hiring the right people at the right time in advance of those new clients coming in. That you have team expectation and metrics in place so that the team is really clear on what’s expected of them and you’re clear on what’s expected of them too. Starting to do more team check-ins and reviews and really implementing that marketing strategy.
So maybe at this point you’re involved in maybe 20 to 30% of client work. The business owners that I’ve seen still be involved in client work at this level are either maybe working with one or two specific clients that they want to be working with or it’s more they’re still involved in client work when it comes to the management piece of it.
So if team has questions about the client work, they’re answering it. If there’s a question from the client that the team can’t answer, they’re being pulled back in.
This is a point in terms of your operational systems, hopefully your manager is now fully stepping into management as you step out and managing those operational systems.
And in terms of marketing, this may also be where if you are able to remove yourself enough from client work and management, you may now be focusing on marketing, typically like inbound marketing. You may have your own podcast or your social media channels or maybe you have a newsletter. And really seeing the importance of being able to connect with the leads that are coming into your world that maybe haven’t converted to clients yet, and really creating and establishing those relationships so that when those people are ready to need your services, they already feel like they have that relationship established, and it’s a lot easier to be able to have that sales conversation with them and know that it’s a good fit.
This is also, we’re gonna go back to operations for a second, so we talked about org chart. We talked about reviews and check-ins. This is where it’s really important to get clear and revamp your roles and responsibilities. So as your org chart changes and it might change frequently depending on like how your business is growing. If it’s growing pretty quickly, the roles and responsibilities will likely shift pretty quickly too, and this is where it’s really important to document and communicate with their team, what their current role and responsibilities are, even if it’s changed from, let’s say, three months ago and making sure it’s clear and written down.
I think this is where sometimes if you’re moving so fast, there can be a lack of communication because you’re just trying to get the work done and focus on the big ticket items. But, I would highly recommend that your manager also documents those roles and how they’re shifting so that your team knows, okay, as my role has shifted, this is where my responsibilities start and this is where it ends. This is also where it’s really important to make sure that you as the CEO, have a role and responsibilities list as well.
This is usually the thing that’s excluded from the roles and responsibilities documents when I talk to my clients and it’s, it, I completely understand why it’s nothing to judge, it’s just the truth because oftentimes we’re thinking about team and you’re thinking about job posts and hiring, but as you grow, your role has to change at your business. You have to be doing less in order to grow. And so really understanding like where your role starts and stops and where somebody else’s starts and stops, especially when you have a leadership team that’s handling things like marketing and sales and things that you might still be involved in when it comes to the strategy, but you’re not involved in the whole piece of it. It’s helpful to know, okay, where is your role in this and where is somebody else’s role in this too.
Okay, now let’s talk about from $600K to $1M.
So now you’re involved in maybe a maximum of 20% of client work and management, and it’s mostly the management piece. It’s mostly when there’s a question or a challenge or something that needs to be changed.
You have a manager. And you may be hiring additional managers or considering hiring in more of a leadership role. So instead of having a manager that’s managing the day to day of your clients and your team, you may be bringing in more of a director of operations and because you will find in the space that you need to update your operations regularly. So it really requires somebody else to be there in this position to do that and to oversee the people, all of the people that are involved in this portion.
And depending on your agency, you may have other departments. So for example, if you have an accounting agency and you do bookkeeping, accounting and tax.
You might have a department lead for bookkeeping, you might have a department lead for accounting, you might have a department lead for tax.
If you have a marketing agency and you, let’s say you’re responsible for copy design and like tech, then you may have a lead for copy. You may have a lead for design, and you may have a lead for tech. So again, it just depends on the type of agency that you have and who on the team is involved in delivering those services and what their different expertises are.
So at this point, you may have already started some outbound marketing which is like reaching out to people inside of your network, getting booked on podcasts, getting booked on other people’s podcasts getting booked to be a guest expert in other people’s groups that are aligned with what your company offers.
It may be you, it may be somebody else on your team that’s representing the company, but really starting to be proactive in that outreach. I think obviously having marketing in place that shows your expertise and there may be some strategies on different social media platforms that allow new eyeballs to see your content, but that outbound marketing is such a great way to be able to really leverage other people’s audiences to be able to send them to your agency. So that’s something to think about too.
Once you’re at $1M+, you are really focusing in on Leadership and Growth. So you have to be fully out of client work. This will not work if you are still in client work, and so that’s a goal, if you’re still in client work and you’re at the $1M mark, that would be something I would really want to dive into as to why. Why are you in client work? What needs to shift and change?
You have a leadership team that’s running your operations. You have marketing and sales in place, at this point, you probably can’t be doing all of your own sales calls.
And I know a lot of agency owners once they’re at like the $600K to $1M mark in that range, they’ve delegated sales.
I will say this is one of those places where I’ve also worked with someone who, was probably around $300K a year, and she had delegated out sales calls and it worked really well for her. She created a hybrid role between sales and account management because she found someone and that worked really well. And using that example as that particular agency would grow, eventually that role would likely need to be split up where she then would have a dedicated salesperson and a dedicated account manager. But for the, for where she was in her business, that worked out really well. So again, this is where it really varies depending on the business that you have and who you find and and all of that. Okay.
You have marketing and sales in place. You have both inbound and outbounding marketing. And these are some of those next level challenges is: really making sure that your operations is evolving with where your business is growing.
And so your operations includes everything that I mentioned before, Foundations, Team, Management, Leadership, Growth strategies.
Making sure that those operations are continuing to grow with you, that you have the right people on your team. That you’re hiring people who may be better than you at at, different areas.
I think that that’s always a good idea is to hire in someone who has that level of expertise. It’s not necessarily true at every single marker inside of your agency, but definitely once you get up to being over half a million to over a million dollars, it’s like really bringing in those strategic thinkers.
And thinking about continued growth strategies. So how are we continuing to grow? And some businesses may not want to grow anymore. They’re like, I’ve hit $1M, I’m good. And the biggest mistake that I see companies make when they get to this point, And it doesn’t even have to be the $1 million mark.
It could be the half a million dollar mark when they’re like, we’re good. They stop marketing and they stop sales. But what happens if you’re working on a retainer model and some of your clients leave? It’s like now you’ve dipped down and now you have to bring people back up. So the more that you can keep these funnels running the better. Because even if you do wanna stay where you’re at, it’s going to involve you still bringing on new clients, especially if you have some current clients that are leaving, like your business and agency it’s a living and breathing thing. And so we wanna make sure that you are continuing to have the growth mindset, even if you are good with what your current revenue marker is.
And for some of you, you may wanna keep going, you may wanna get to a multimillion dollar agency, a billion dollar agency. And so in that, it’s like really taking a look at continued growth strategies to make that happen.
It could be expanding your services. It could be serving a new type of industry. It could be serving a new type of customer, right? Branching out and thinking about different ways you can serve different groups. And this also as you grow, we haven’t talked a whole lot about how your financials change, even though you know financials is part of the Foundations which needs to evolve as your business evolves. But as you are at these different points, there’s going to be times where the money that you are spending, Is going from being more of a direct cost to an overhead expense. And so there’s different strategies to put in place around your financials as well to make sure that you have an idea based on your projections where your money’s going to be going.
Okay, that’s the overview.
We talked about the five operational components of growing and scaling from $200K to $1M+.
We talked about some of the different revenue markers and what you may need to have in place knowing that it changes depending on so many things, depending on your price point, the number of clients you serve, how many team members are involved in servicing one client. Depending on your strengths and when to hire, what types of roles within the business.
Rate yourself. Where are you now when it comes to those five operational components? How’s your foundations? How’s your team? How’s your management? How’s your leadership? How’s your growth strategy?
Where are you when it comes to your revenue and what, what aha moments or what are you taking away from this conversation? And then I wanna recommend two ways that you can get support.
One is a free training that I have, and it’s called: 3 Reasons Why You’re an Agency Owner That’s Still Doing Client Work.
You can check that out at nicolejacksonmiller.com/uplevel. And what this training does is really show you the components of running an agency. It’ll help you assess where you’re at right now and share with you some potential next steps. If you’re ready to get support with this, you can also apply to my program AGENCY.
You get a free assessment when you apply for a call. It really gives people a lot of clarity so that they know what they need to do next, and then the program actually helps you with that implementation because there’s a difference between learning and having clarity and implementing.
And the feedback that I get from participants inside of my AGENCY program is that they love that there’s a framework involved, but they also love that it’s customized based on their particular business. And the program is set up to do that because like I said, there’s not a one size fits all, and you may get into the implementation program where you’re changing up your foundations or you’re changing up your team and a question comes up or a challenge comes up. And you kind of feel like you’re guessing or winging it. And so to be able to have the support of a program that caters specifically to agency owners is so helpful.
And if you’re an agency owner that’s at the $1M mark or above, what I recommend that you do if you feel like you need support with operations is to reach out to us at hi@nicolejacksonmiller.com, because we do have a few different ways we can help you and would love to be able to have a conversation.
All right everyone. That’s it: how to grow from $200K to $1M with an agency model. I hope you enjoyed this conversation. I know I have, and I am excited to see you next week.
