Have you ever taken a step back to look at the bigger picture and ask yourself “what outcomes am I responsible for as an agency owner?”
There are a lot of things that you are responsible for, but in this post, I'm going to explore the top three outcomes that you need to focus on the most to be able to work less and earn more.
I am also going to explain the approach that you should use to get there, that I like to call – minimum viable effort.
Let’s dive straight in.
The Outcomes That an Agency Owner Is Responsible For
1. To Not Run Out of Money
As a business owner, your number one responsibility is to stay liquid. Because if you run out of money, you can't pay your staff or your bills which means that you're out of business. So sales needs to be your top priority.
2. To Stay Profitable
I’ve said it before, I'll say it again… you owe it to yourself to stay profitable.
As a business owner, you are taking an enormous risk by starting and growing your own business. And I know this is confronting for some people to hear… but you have the right to make an obscene amount of profit from your business.
The more profit you make, the more you can look after your family, your team and yourself, and the more you can give to those in need.
We have people in Maverick's Club who buy expensive cars and people who put money into building orphanages. What you do with that profit is entirely up to you but there is no need to feel guilty about making a lot of money from your agency.
At some point in my late thirties, I realised that worrying about how much things cost was getting in the way of living the life that I wanted and experiencing the things I desired.
I used to say things like “I want a house” or “I want to travel more” which made me focus on how much money I didn’t have.
So I made a decision to stop putting my energy into how much things cost. And instead made a list of the things and experiences I wanted and then focused my energy on how to pay for everything.
I never say I can't afford it, instead, I say “My resources are allocated elsewhere. So let's put that on the ‘next’ list.”
This is a much more abundant mindset. As long as you think you can't afford it, you won’t be able to afford it because your subconscious will hear that message and will then go into overdrive to make sure that you can't afford it.
The subconscious is a pretty stupid computer that takes everything you say literally. So language is really important. The things that you think and the words that you say, give yourself your subconscious instructions on how to behave.
3. To Empower Your Team to Make Decisions
At some point in the future, you are not going to want to run your agency anymore because… well… you'll just be tired. So your options are:
- Sell your agency: An agency is a very tricky business model to sell, but it can be done.
- Retire from your agency: Continue to run the business and extract as much profit from it as you possibly can and use that profit to build your wealth through financial investments. Then when you’re ready to retire you can close the business.
- Hire someone to run it for you so you can step back and be a shareholder: If this is your end game, then you need to start to elevate your team to be able to run your business without you. This way you can still make a profit from your agency without being on the tools.
Any of these options are going to require that the business be able to generate revenue, deliver value and create a profit without you actually being involved in the day to day of things.
So your third priority as a business owner is to build a great culture for your team to flourish in and empower them to go forth and conquer without you. And the success criteria is that you are checking the revenue and seeing profit without being involved.
What Is the Minimum Viable Effort to Get There?
Do you ever find that the best ideas always come to you when you’re doing something relaxing like taking a shower or waking up from a great sleep?
It’s because you’re away from the computer and your mind is relaxed.
Many agency owners believe that “If I can just achieve ‘X’, then I'm going to take every Friday off.”
So what we do is we flog ourselves in front of the computer to get the business to this magical “X”. But my observation is that it's not going to happen because you'll never get to ‘X’ – you’ll be burnt out and slowing down the business.
You will do your best work with a rested brain. So my challenge for you is this – block time in your calendar where you are not allowed to work. Take three hours to rest or do something that you enjoy and do this a minimum of one day a week.
Here's where the middle and viable effort thing comes into play…
The more time you book out of your calendar where you're not allowed to work, the less opportunity you give yourself to procrastinate while you are working.
It's Parkinson's law – work expands to fill the time allocated for its completion. You will get it done!
Too Swamped To Think About Running Your Business?
If you are too swamped with client work to think about being a business owner, it's time to hire someone so that you can spend more time focusing on the three important outcomes that I outlined above.
Here's a recap:
- Sales activities to bring on more clients so you don’t run out of money
- Making an obscene amount of profit
- Building your team and elevating them to run your agency without you
You may be wondering how you can afford to pay someone if you are not working billable hours, but let me tell you what I know to be true…
If you don't put dedicated time into sales, your business won't grow.
The more time you put into sales and marketing, the more clients you will close. If you have a good sales process in place and an irresistible offer – you WILL get results.
So if you hire someone, even part-time initially, to take over 40% of the client work that you are doing then you've then just freed up two days a week to concentrate on sales and marketing.
Always be marketing, always be selling, always be recruiting. It's the only way to get off the awful treadmill cycle of trading time for money.
Because as coach Pete Perry always says:
“Never trade time for money because there isn't enough time to make enough money”
It’s a Margins Game
A lot of people start out by just hiring for other freelancers, which is a low-risk way of doing it. So for example, if you are a web designer and a freelancer charges you $1,200 for a website build, then you need to sell that website to your clients for at least $3,600.
Whatever they are charging you – multiply it by three.
It’s the same principle when you bring on your own staff – if you hire a developer that costs you $50k per year, that developer needs to be producing $150,000 a year worth of work in revenue.
So whatever it costs you to build something, you need to charge at least three times to the client in order for there to be enough margin to make a decent profit and pay for the business overheads such as insurance, rent and software.
The most important thing I want you to take away from this post is that sales really is your number one priority.
There are so many reasons why business owners don't focus on sales. Some people believe that it is sleazy. Or some just don’t know what to do.
But sales can be easy and it can be fun! Yes, it can… I promise!
If you want to learn how to create your own sales process (without being a sleaze bag) then jump on a call with one of our team members and let’s make a plan for your business growth.