Challenges of Owning an Agency

Most agency owners I talk to think their biggest problem is simple: “We just need more leads.” They assume more leads mean more deals. But after working with dozens of agencies, I've learned this usually isn’t true. What’s actually happening? 👉 They have a positioning problem. They’re trying to sell to everyone—so no one feels 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗼𝗼𝗱 or 𝗱𝗲𝗲𝗽𝗹𝘆 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝗲𝗱 to their offer. 👉 They have a pricing problem. They charge based on hours and deliverables—not on the value their work creates. So bigger clients dismiss them. 👉 They have an offer problem. Their offers are confusing, complicated, or hard to buy. Clients lose interest and move to someone simpler, clearer, and aligns with what they need. If you pour more leads into an unclear offer, you just waste more opportunities. The fix? 1️⃣ Get brutally clear on who you serve. Pick a high-value niche and show them you deeply understand their problems. 2️⃣ Price according to value. The higher the perceived value of your outcomes, the fewer objections you’ll get. Clients compare you differently at $25K vs. $5K. 3️⃣ Simplify your offer. Clear packages, clear outcomes, clear paths forward. Confusion kills deals. When your offer is dialed in, you won’t chase leads—they’ll come looking for you.

What I've Learned from Reviewing the "Under the Hood" of Over 100 Agencies? As the CEO of Moburst, we are aspiring to acquire 2 agencies every year. As part of this process, I've had the unique opportunity to dive deep into the weeds of over 100 digital agencies over the past year. It's been an eye-opening experience, and I've noticed some critical trends that are shaping the future of the marketing industry. 1)     The Impact of Market Shifts: The last two years have been particularly challenging for digital agencies, especially those with fewer than 50 employees. Many have faced a significant decline in revenues in 2023 and 2024, with most reporting a 20%-30% drop per year. The primary cause? Cutbacks in marketing budgets across the board. It's a stark reminder of how volatile our industry can be and the importance of financial resilience. 2)     The Dilemma of Agency Owners: There's a growing trend among agency owners who are open to the idea of selling their agencies. However, many are hesitant and even feel ashamed to showcase their financials due to the challenges they've faced. It's a tough spot to be in, but it's crucial to remember that every business has its ups and downs. Transparency is key in navigating these conversations. 3)     The Resilience of Remote and Freelance Models: One of the most striking observations is the resilience of companies that have embraced remote work culture and leaned heavily on freelancers. Unlike traditional office-only models, these companies have managed to maintain, and in some cases, even grow their profit margins while their revenues decline. The flexibility and scalability that these models offer are proving to be game-changers in an uncertain market. As we move forward, it's clear that adaptability and transparency are more important than ever. The landscape is changing, and those who can pivot and embrace new ways of working will come out stronger on the other side. Would love to hear your thoughts and experiences - how has your marketing approach changed in these challenging times? #DigitalMarketing #AgencyLife #BusinessResilience #Leadership #Moburst

A recurring experience I hear from a number of different agency founders: They land their first big client that drives tremendous growth & profits. They end up focusing entirely on servicing the big client. This may go on for the better part of a year, or in some cases, multiple years. And then... the big client churns. Perhaps it's new leadership, change in strategy, budget cuts, or the work just wrapping up. The big fat retainer or multi-phase project fees stop coming. And what's worse, the agency has been so busy delivering for their client that they've done very little to build a pipeline of new opportunities. Hardly any marketing, networking, partnerships, etc. They enter a period of pain that includes headcount reduction, cutting back on expenses, and low morale. In other words, hard times. But those that persevere often learn from the experience and are more mindful than ever of client concentration and the need to build an active new business pipeline. Your agency doesn't have to fall into a cycle of hard times >> good times >> hard times. Maintaining a healthy dose of paranoia (e.g. what if our top client disappears tomorrow?) even in good times can go a long way. It can mean investing in marketing initiatives, expanding account growth activities to mitigate client concentration, or revisiting the agency's positioning & services offering to attract new types of clients. Don't let the good times (e.g. big client paying you a lot) let you get complacent. == 🟢 Check out more insights & resources at AgencyHabits, including a weekly newsletter drawn from our experience running Barrel Holdings.

a lot of agencies stall at $1m-$2m in annual revenue. here's why. first, many many agencies start as just 1 person who is really good at the thing that they do. that could be building product, design, marketing, etc. they're so good that demand starts to outstrip their supply, aka their time. when that happens, they have two paths: 1. double / triple their prices or 2. build a team and teach them to do the thing that they do well. there are a few dynamics to consider here. - the person choosing path 1 will make a lot more money take home than the person choosing path 2 for years. probably until the person achieves 4x-5x in revenue scale. that's because path 2 is lower margin. you have to build out the team that does the thing. then you have to build out the ops and overhead that stitches it all together. this can be very discouraging, and it's often much easier to stop building the team and just go back to doing the thing yourself and raising prices on your time. - doing the thing is a vastly different skillset and job than building the team that does the thing. people who are really good at doing the thing, often really like doing the thing. what they don't like is incorporating a biz, building a back office, chasing down invoices, doing 1:1s, hiring, etc etc etc. a lot of people find that building an agency isn't fun and what they learn is that they'd rather do the thing that they like to do. some of these folks take the contractor-subcontractor approach where they then actively do the work and subcontract out some of the boring bits. this can work out very well and ultimately results in a setup akin to the solo contractor approach where you have high margins but your topline is capped by your time. - scaling the biz means developing a repeatable sales & marketing motion. this is where, particularly, e.g., product, design or eng agencies, get stuck because the whole basis for starting an agency came from a surplus of word of mouth biz. ie they got the biz by doing the thing well, and they don't have the skillset for scaling demand beyond that. the way i think about it is that this agency exists because it does great work. word of mouth is a proprietary channel for this agency. how do you scale complimentary proprietary, owned channels based on this agency's 'secret'. i believe that the 'mistake' that folks take when they try to scale is by going after nonproprietary channels, which turns their agency into a commodity biz. sales cycles are longer and more competitive for customers that you have to introduce yourself to. you become a hubspot agency partner and you compete just as 1 of N agencies. ultimately, what's important isn't scaling an agency beyond $X milestone, it's about building the biz you want, doing the work you want, supporting your family and all that good stuff. however, breaking out of this range makes cracking $10M+ in annual revenue a real possibility if that's what you want.

Scope creep kills agency profits. Yet most owners accept it as "part of the business." They're wrong. The most profitable agencies don't manage scope creep. They eliminate it. Here are three ways: 1️⃣ Implement a "Flex Fund.” Include a small budget in all scopes as a bucket for non-scoped requests. When clients request something outside scope, you don't hesitate. You simply say, "Yes. We can use the Flex Fund." Clients feel valued. Your team isn't doing free work. Awkward conversations vanish. Unused budget gets refunded. (This rarely happens because you can make recommendations at the end of the project to use what remains. They've already paid, after all.) Name the Flex Fund whatever you want. 2️⃣ Send Visibility Invoices. Create zero-dollar invoices showing what would have been billed for out-of-scope work. This builds awareness without friction. It also prepares clients for the eventual "we have to charge for that" conversation. And it arms you with a paper trail to show how much you've already done. Note: I'm not saying you should do free work, but sometimes the little things going a long way with keeping a client happy. 3️⃣ Establish Quarterly Strategy Sessions. Define clear strategic priorities with measurable outcomes every 90 days. Yes, I know a quarter isn’t enough time to see the fruits of your marketing labor, but it lines up with QBRs, so leverage it. If you’re doing these strategies, when an out-of-scope request emerges, you have a professional out: "That doesn't directly support our current strategic focus. Let's document it for consideration in our next quarterly planning session." This shows your strategic discipline while showing clients you're tracking their ideas. And sometimes, they have a great idea and you can refer to point 2 in the list. Position these as client benefits, not agency protection. Scope creep isn't inevitable. It's just poor system design. What's your biggest scope creep challenge? I'll suggest a specific solution in the comments. #agency #scopecreep PS - Join other agency leaders in the DynamicAgency(dot)Community where we work through problems like these.

The 80/20 Rule: Why Most Agency Owners Are Working Too Hard for Too Little Most agency owners are burning themselves out focusing on the wrong activities. I've learned this the hard way over years in the business. The 80/20 rule (Pareto Principle) is brutally simple: 80% of your results come from 20% of your actions. Yet when I look around at struggling agencies, I see owners trapped in a cycle of "busy work" that barely moves the needle. Let me share what we discovered at our agency: When we analyzed our business, we found that almost all our growth came from a handful of key activities. The daily outreach to mortgage brokers and realtors. The detailed sales process we implemented. The role-playing training that prepared our agents for every objection. The compensation model that eliminated turnover. Everything else? Just noise. Most agency owners are drowning in administrative tasks, putting out fires, and handling low-impact activities that feel urgent but create minimal return. They're caught in an endless cycle of quotes, service issues, and paperwork – convincing themselves that "this is just the business." But it's not. When we restructured our agency around the 20% of activities that actually drove growth, everything changed. We set up systems where Goosehead handled service, freeing us to focus exclusively on sales. We built a streamlined process where new hires who once took a year to become profitable started contributing in six months. The results speak for themselves: we jumped from 1000 policies a year to 1000+ every month. (On track to 2000 this month) This shift requires brutal honesty about how you're spending your time. It means tracking your activities for a week and having the courage to look at where your hours actually go. It means being willing to delegate, eliminate, or systematize everything that isn't directly contributing to growth. For us, it meant recognizing that metrics are everything. Daily, we tracked lead flow, conversions, bind rates, and policies per account. We moved our average from 1.2 policies per account to 1.85 – a seemingly small change that dramatically increased our bottom line. The hardest part? Letting go of the idea that being busy equals being productive. The most successful agency owners I know aren't working more hours, they're working smarter hours. They've identified their high-leverage activities and ruthlessly eliminated everything else. So I'll leave you with this question: What's the 20% of your work that's creating 80% of your agency's growth? And what would happen if you doubled down on those activities while systematically eliminating the rest? #Insurance #InsuranceOwners #Insurancesales #marketing #scaling #Insurancemarketing #insuranceagency

You only need one skillset to open an agency. That’s a myth that 90% of people willing to open an agency have.  Harsh Reality: You need a skillset but more than that you need a good → execution → leadership → communication skills. I’ve been running OWLED Media for almost 4 years now and I’ve learned these 3 lessons to run an agency business: 1) Hire doers instead of thinkers.  Your business growth cannot solely rely on you when you have more clients and salaries to pay.  Build a team that is capable enough to make decisions and keep things going on days when you are unavailable. 2) Delegate more even if it’s not working initially.  It’ll take your team time to understand your requirements, but you still need to assign as much as possible.  Understand that your team is bound to make mistakes, and you need to give them room to grow the business. 3) Focus on service quality first and lead-gen later.  The gold is in retaining the existing clients along with acquiring new clients.  Build processes, SOPs, and systems so smooth that your client is never disappointed with the service quality. Your freelancing business might be sustained based on your skill set. But your agency business won't. You become an entrepreneur after opening an agency and the phase of freelancing ends. - Read that again. Only this realization will help you grow. 

The marketing agency business is tough and getting tougher. Two factors have aligned to create a major riff. The first is price. Firms pushing packaged tactics are finding it hard to achieve a margin close to that that once existed in, say, web design or SEO. Some of that's due to a glut of providers from all over the world and the willingness of even small businesses to tap into that virtual reservoir, and some of it's due to efficiencies gained by toolsets such as AI. The other factor amplifying the toughness is that marketers got pretty lazy in the last decade, enjoying search traffic generated by just a few rules and social networks willing to sell targeted user data cheaply. Short story: tactics-only approaches worked. Long story: that's going away. Generative AI search has already started to sink search traffic, and third-party data and privacy initiatives have made advertising harder and more expensive for the lazy buyer. Yet demand for companies' work is at an all-time high. Buying journeys may have changed, but buying intent has not gone away. So, let’s cut to the punchline. If an agency today does not lead with developing a marketing strategy before suggesting tactics, they are toast. Memorize these words. "Yep, you cannot pass go until we develop a marketing strategy. I know you think you want your website redesigned because this one doesn't work, you cannot have that until we develop a marketing strategy." If an agency today does not have a repeatable process for offering said strategy, they are toast If an agency or, heck, let's not forget consultants and the burgeoning field of fractional CMOs, do not understand that a marketing strategy must contain business objectives, brand strategy, growth strategy, customer strategy, and team strategy, then, you guessed it they are, wait for it, wait for it . . . grilled bread. Please, your thoughts?

$1M agency owner: 1. “Any client is a good client” 2. “We’ll beat them on prices” 3. “I must be involved in the day-to-day” 4. “New biz is more important than old biz”  5. “A premium positioning is tougher to land clients with” $5M agency owner: 1. “We’re not for everyone” 2. “We’re the premium positioned agency” 3. “I’ll lead the vision and direction of the agency” 4. “Existing clients matter just as much as new ones”  5. “We don’t need to compete on price if we’re unique” The most successful agencies know and follow 5 operating rules: 1️⃣ Selectivity with clients They let go of bad apples quickly, preventing resource drain and scope creep They’re selective and exclusive with who they work with 2️⃣ Price isn’t the competitive factor It’s a sure-shot way to diminish your positioning. Lowering prices is a bottomless pit. Not to mention it kills your credibility, fast. 3️⃣ The day-to-day will just weigh you down Delegate, outsource, refocus.  Run your business, don’t have it run you. 4️⃣ Retention is just as important (if not more) Keep your existing client base happy. It opens the door to referrals, upsells and cross-sells. 5️⃣ A premium positioning will bury the competition A lower price ≠ more ****conversions. It can mean the exact opposite and create distrust. If you’re an agency trying to break through the $1M ceiling… Implement these yesterday. ps. Ask me anything about agency growth in the comments and I’ll answer from my experience granting $100M in agency contracts and building a $5M agency of my own.

𝗦𝘁𝗮𝗿𝘁𝗶𝗻𝗴 𝗮𝗻 𝗮𝗴𝗲𝗻𝗰𝘆 𝘄𝗶𝘁𝗵 𝘇𝗲𝗿𝗼 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 𝗶𝘀 𝗹𝗶𝗸𝗲 𝗷𝘂𝗺𝗽𝗶𝗻𝗴 𝗼𝘂𝘁 𝗼𝗳 𝗮 𝗽𝗹𝗮𝗻𝗲 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗰𝗵𝗲𝗰𝗸𝗶𝗻𝗴 𝗶𝗳 𝘆𝗼𝘂𝗿 𝗽𝗮𝗿𝗮𝗰𝗵𝘂𝘁𝗲 𝘄𝗼𝗿𝗸𝘀. Let me say it straight: It’s 10x easier to start an agency after you’ve worked at one. Why? Because most people jump into the agency game with just one thing: a skill. → They know how to run ads → Write killer copy → Design beautiful websites. But running an agency? That’s a whole different beast. Here’s the stuff you don’t learn from YouTube tutorials or freelancing gigs: 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗮 𝗽𝗶𝗽𝗲𝗹𝗶𝗻𝗲: Where’s your next client coming from? You can’t build a business on hope and referrals. 𝗖𝗹𝗼𝘀𝗶𝗻𝗴 𝗱𝗲𝗮𝗹𝘀: You’ve mastered your craft, but can you handle objections like, “Why should we choose you?” 𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀: Who’s setting up the systems? How do you onboard, deliver, and scale without losing your mind? These are the things that make or break an agency—and if you’ve never seen them in action, you’re flying blind. If you’re thinking about starting an agency, here’s my two-step plan: 1️⃣ 𝗪𝗼𝗿𝗸 𝗳𝗼𝗿 𝗮 𝘁𝗼𝗽-𝘁𝗶𝗲𝗿 𝗮𝗴𝗲𝗻𝗰𝘆 𝗳𝗼𝗿 1-2 𝘆𝗲𝗮𝗿𝘀. Don’t just clock in and out—absorb everything. Ask questions. Study their systems. Treat it like you’re getting a paid MBA in how to run an agency. 2️⃣ 𝗜𝗱𝗲𝗻𝘁𝗶𝗳𝘆 𝘆𝗼𝘂𝗿 𝗲𝗱𝗴𝗲. What are you better at than anyone else? What unique problem can you solve for clients? Use your time in the trenches to figure out where you can dominate. The Shortcut Isn’t Sexy, but It Works I get it—working for someone else might feel like a detour. But if you’re serious about building a successful agency, it’s the fastest path to get there. Learn first. Launch later. CC: Nick Shackelford