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Do you wish your agency was actually profitable but don't know where to start?
We get it, agencies face many challenges and it can be hard to look past the numbers and instead focus on the smaller steps you can take to help your agency become more profitable.
Agency owners know that they must continue to grow and improve because even if you were profitable last year, that doesn't guarantee the same for the future. Things can change quickly, client relationships can go bottoms up, profit margins can shrink, and many other factors can disrupt your cash flow.
We’ve put together a list of some of the challenges agencies face and how you can overcome them to become a more profitable agency, check it out!
Poor communication
Strong communication sits at the heart of a successful and profitable agency. It provides employees with the information they need to carry out their work effectively and helps to build strong working relationships. You might be thinking, “How important can communication really be when it comes to profitability?” Well, having poor communication at your agency will affect efficiency, productivity, employee turnover, and many other areas that impact your bottom line.
If you want to become a profitable agency, you’ve got to focus on the foundations—the components that hold everything together and keep you running like a well-oiled machine.
During Teamwork’s recent virtual event, Bandwidth, Brooke B. Sellas, CEO and Founder of the award-winning digital marketing agency, B Squared Media, spoke about how your agency can prioritize communication, here’s what she had to say:
“You should work communication into your core values, that way, right from the outset you are telling all of the people joining your team to work with you, how important communication is and you're setting a precedent”
If you want communication to be a top priority at your agency, you’ve got to have buy-in at the top. When you show your team how important it is, you can be sure to see the same reflected from your employees and throughout your agency.
Wave goodbye to poor communication at your agency with these tips
Conduct weekly or by-weekly level 10 meetings: EOS’s Level 10 meetings were created to facilitate more focused and productive meetings. If you find that your team is overrun with long and sometimes unnecessary meetings, holding weekly or by-weekly level 10 meetings might help your agency to have more productive meetings and save time. Learn more about EOS Level 10 meetings here.
Hold quarterly client check-ins: Happy clients make for a happy agency. By holding quarterly check-ins with your clients, you are showing them that you care about their experience and you are open to hearing their feedback. You’ll also gain great insights into your client's needs and how you can continue to keep them happy.
Check-in and encourage your employees: Checking in with your team each day and sharing words of encouragement can go a long way. Sometimes this can be as little as sending chat messages or responding to a task that you’ve seen. A little can go a long way with positive feedback and encouragement, boosting your team's morale, and letting them know that they are appreciated and seen.
You don’t have software for the organization of resources
Agency life requires a lot of moving parts, especially when it comes to the different software systems used on a day-to-day basis. Things can become a hot mess all of a sudden if you’re not managing them correctly.
Your resources are your most valuable asset as an agency, they hold everything together and without them, you won’t be able to succeed. When resource shortages kick in, bottlenecks can happen and deadlines can be missed, but these situations can be avoided with the right amount of planning. That's why investing in good resource management software is essential and a key contributor to making your agency more profitable.
It’s time to invest in resource management software, here’s why
Allows you to allocate the right resources: With resource management, you can filter through resources based on different factors such as capacity and skill set and see who is the right person to assign a task to.
Helps to prevent burnout: By using resource management software, you have the ability to see at a glance who's working on what. You can evenly distribute work, ensure that your employees' workloads are attainable, and avoid overloading and burning your team.
Predict problems early on: Resource management allows you to stay ahead of the game and catch any potential issues before they become a real problem. If a team member needs to take time off or you need more hands-on desk with a project, you'll be able to see who's available.
With Teamwork’s resource management software you can do all of the above and more!
By making this investment into your agency you will be sure to see it pay off when you have greater transparency and visibility across your team, making it easier than ever to manage your resources. Learn more about how Teamwork’s resource management software can help your agency to optimize your resources.
Leaving billable hours on the table
The more hours that your employee's bill, the more money your agency makes. Sounds like a simple formula, right? Unfortunately, it’s harder than it sounds when your employees are juggling billable and non-billable tasks—it can be difficult to stay on top of tracking all of your time.
The world revolves around time when you work at an agency so it's no surprise that time tracking should be your best friend. If employees fail to track time correctly, it can damage your revenue. Employees can sometimes feel like their work is being questioned and could be valued less when asked to track time, and fear that once their manager sees how efficient they are, they may end up being micromanaged.
There are many time tracking software solutions out there that can help you keep track and ensure that you’re not leaving any billable hours on the table.
Time Tracking can make your agency more profitable
With Teamwork’s time tracking features, you can track time spent on a project across multiple tasks and team members, giving you deeper visibility into time spent across your team.
Measure your project profitability: Get a better sense of each project's overall profitability by tracking billable hours. Our Time Tracking features allow you to prioritize your most valuable client work and forecast your availability for taking on new clients.
Make better estimates: You can log all of your billable and non-billable time, giving you further insights into how long work actually takes. When you track the resources needed for each project in a resource management tool, you'll gain greater insights into requirements and timelines, allowing you to make better project estimates and add more resources to a project if necessary.
Keep track of your team: Your profitability is intrinsically linked to how well you utilize and track your resources. If your team is spending too much time on certain tasks and projects that are less profitable than others, your overall profitability will be affected. As an agency, being able to see how and where your time is being spent is critical for managing your work, projects, and billable hours.
Learn more about how Teamwork’s Time Tracking Software can help your agency.
No systemizing of processes or automation
Agencies usually have so much to do in such a short amount of time which is why systemizing and automating your processes can save you a lot of time, and energy, and help you to become more efficient.
Creating systems and putting them in place can transform the way your agency works, making you a whole lot more organized and profitable.
It’s important to take a step back and review your tasks and see which ones could benefit from developing a system. Once you've identified these tasks, take a look at the benefit you will see from implementing a system. It might save you and your team lots of time and stress, or it may help increase your revenue.
Processes that you should systemize: Repetitive tasks are the perfect task to systemize, for example billing clients or scheduling social media content. Systemizing can be beneficial to nearly all aspects of your agency, it’s entirely up to you to decide what areas could be improved by creating systems.
Automation: Once you have decided which tasks you’d like to systemize and you have developed these systems, the next step is automation. This means using software to automatically complete your systemized tasks. By automating various processes and tasks, you will be saving your agency a lot of manual labor.
Teamwork allows you to automate your repetitive tasks and improve your team's productivity by eliminating tedious manual work. You can choose from a selection of automation templates to optimize your repetitive and manual work. Teamwork Automations also allows you to create your own workflows. Learn more here.
Not being selective about the clients you choose to work with
Sometimes it can be hard to say no, especially if your agency is only starting off. You might be thinking, “Any business is better than no business!” and of course, you need to start somewhere. But, it can be super damaging to take on the wrong clients. That's why it's important to be selective about the clients you choose to work with.
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Ask yourself the following questions before taking on a new client
Does the client respect your team's expertise? Before you take on a client you will have proved your expertise to them, whether that's through case studies, samples, or previous work that you have created. Once you have taken on a client you shouldn't need to prove the value and expertise that you are bringing to the client. Respect needs to go both ways, if your client doesn't respect you or your team, it might be a sign that they are a wrong fit for you.
Is the client engaged in the work? It’s important to check that the client will be engaged in the work before taking them on. Sometimes clients may be happy to hand it over to you and that's OK, but be sure to outline your contracts and be clear about what it is you are delivering, this way you are leaving no room for extra requests and avoid going over the agreed hours for the project.
Does the client have the budget for the request? If you want to become a more profitable agency, budget is the most important factor to consider when you decide whether or not to take on a client.
One of the tips that Brooke shared with us during Bandwidth was to use intake forms to understand where the client's budget is. This way you are starting the communication early about the budget to understand if they are the right fit for your agency. Find out more about Teamwork’s Intake forms here.
Become a more profitable agency with Teamwork
There are a ton of things you could be doing to improve your profitability, but sometimes the best thing you can do is to take a look at your agency and see what's working and what could benefit from some changes. Maybe it’s as simple as talking to your team and getting their perspective. Starting small by improving your communication, and processes and choosing the right software can set your team up for success and help you to become more profitable.
Have you been struggling to be more profitable at your agency? Let us know what challenges you’ve been facing.
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