Smart Agency Masterclass with Jason Swenk: Podcast for Digital Marketing Agencies

Would you like the confidence to raise prices and triple your agency’s growth? Are you ready to empower your team and transition to a true Agency CEO? That's exactly what today’s guest has been able to do over the past couple of years. She is on the show talking about overcoming her two biggest challenges: removing herself from sales and the fear of raising prices. What she realizes now is that she was standing in her own way and letting go has actually led to amazing agency growth. Taking a leap of faith and reinventing her role was what her agency needed to reach its full potential. Audra Brehm is the founder of Brehm Media, a social media agency that focuses on the fashion and beauty world. As she grew her agency, she doubted whether clients would see their value and agree to pay once she raised her prices. As CEO, she realizes the right client will see the agency’s value even when you don’t. In this episode, we’ll discuss: Raising prices to affirm your agency's value. Determining which clients are a good fit for your agency. Empowering your agency team and removing yourself from agency sales. Sponsors and Resources E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Why Raising Prices Affirms Your Agency’s Value Audra was looking for a new job in Denver when an interviewer asked her why she hadn't opened her own agency. She really couldn’t come up with a reason and thought "why not?" That company ended up being her first client and, as she’s embarrassed to admit, she started charging $800 a month for social media and marketing services. She was just excited to be starting her own business. Entrepreneurs commonly become a "yes man" in their early stages and figure they’ll eventually get other clients and raise their prices. Audra admits she hasn’t always had a good idea of her agency’s value, but listening to their clients talk about the agency was an excellent way to understand their worth. If the client could see her agency as its marketing arm and an extended family, then she knows they are positioning themselves as a valuable partner. As someone who loves to learn, she strives to always be ahead of the curve. If they can do that as an agency, then she knows they are providing value. So then, why wouldn’t people pay what they charge? The thought of raising her agency's prices used to be terrifying. Every time they increased, Audra worried she would lose clients. If she could go back, she would tell herself not to be so afraid. It’s ok if clients decide to leave after you raise your prices. The ones who stay are the right clients. In retrospect, Audra thought the agency would be ruined with a reputation of being too expensive. Now she realizes her agency’s value and knows the importance of raising prices. The reputation isn't about being too expensive, it's about being receiving the elite value Brehm Media provides. Transitioning Out of Agency Sales and Empowering the Team As the agency has grown, Audra had a really hard time taking a step back from sales. She doesn’t like to feel out of control, however, empowering the sales team meant putting control in other people’s hands. Getting out of day-to-day operations was the first time that she actually questioned what she was doing in the agency. In time, she found a new way to continue participating in the sales cycle by handling the final sales calls with new clients. She found that relationship-building before taking on a client is actually her favorite part of the sales process. So instead of taking herself completely out of sales, she gets to engage and learn more about clients while still letting go of some control and empowering her team. Plus, she feels clients appreciate the fact that the entire agency has their back, including the owner. It can be hard for many digital agency owners to transition out of day-to-day operations, but finding ways to still be part of your agency will help you with that transition. Later on, you may even find that you don’t need that small role anymore. Audra has embraced her role as CEO and realizes the team won’t need her as much. Now she can really live the work-life balance agency owners strive for. Last year was the first time she went on a family vacation and didn’t take any business calls or check emails for two weeks. She had confidence that her team could handle anything that came up. Finding Ideal Clients That Are The Right Fit For The Agency It’s good to be self-aware enough to recognize when your agency can't deliver the results clients expect. For instance, if a client expects a 10x return in a month and you know you can’t deliver, then tell them. Are there agencies out there that could get them there? Yes, but it’s better not to promise a deliverable you know you probably can’t reach. For Audra, this is the first step of avoiding the wrong clients that are not a good fit for her agency. Other common red flags a prospect won’t make a good client include asking to split monthly payments into multiple charges. This clearly shows they cannot afford you. They have a cash flow issue and are banking on your agency's results in order to pay moving forward. Another issue is clients who think that they know more than the agency does. This fosters a very toxic environment where the client does not treat the agency as a partner but expects more of an order taker. To qualify a prospect, Audra's team asks what a prospect's monthly revenue is just to be sure that they can afford her agency. They also want to see what else they're spending on other marketing efforts. This helps the Brehm team learn whether the client is diversifying their marketing budget on other vehicles. Audra says to run the other way if you encounter a company that cannot explain who they are and its future vision. If they can’t answer where they hope to be in 6 months, 1 year, and 10 years, it's a massive warning sign. Getting Through the Rough Patches in Your Agency Journey Audra feels a lot of people don’t believe in what’s possible for themselves and only see the obstacles. You need to have clear goals for your business. That’s something you should look for in clients and that you should have for your agency. Having an agency is a rollercoaster but the highs should outweigh the lows. And if they don’t, then maybe you should reconsider if this is what you want to be doing. In the end, you should be proud of what you built, the business, the lifestyle, and your team. Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.   Check out Audra's previous interview:  https://jasonswenk.com/digital-agency-ceo/

Are you trying to improve your client retention rate? How often do you communicate with your clients? Building a good relationship with your clients starts immediately after they sign on to work with your agency. Today’s guest takes us through his process of creating a level of trust with clients that make them want to stay. With clear goals set from the start and constant communication, they’ve only lost one client in ten years! Jeff Barnes is Chairman of Barnes Health, the strategic healthcare marketing, and public relations agency be started in 2003. He began his career in the healthcare marketing and public relations space on the client side 34 years ago. Being able to look at things from the client’s perspective has been a plus for him as he has really focused on building good relationships with them. He sets clear goals and always makes them feel like they are the priority. In this episode, we’ll discuss: Keeping client churn rates at a minimum. Why constant communication and a clear process are the key. Why you should strive to find clients that really fit with your agency. Sponsors and Resources E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Jumping From the Client-Side to Agency-Side Jeff had been working in healthcare marketing and public relations for 15 years before joining “the dark side” of the agency world. Basically, he wanted the freedom and more flexible hours of being an agency owner. Back then, there weren’t many marketing firms in the healthcare niche, so he saw a good opportunity. Barnes Health started with one client and the agency has grown significantly since. He still has that first client and, actually, a total of four legacy clients that have worked with the agency for 20 years. Jeff has always preferred to work with a retainer pricing model. Some agencies may feel clients take advantage of working under a retainer expecting too many services under the retainer umbrella. However, the most important advantage for Jeff is having a guaranteed revenue, which helps him sleep at night. Nowadays, retainer clients account for about 95% of the agency’s revenue. How to Keep Agency Client Turnover Rate At a Minimum The average agency turnover is 25% for a variety of reasons. With these statistics, Jeff usually gets bewildered looks when he says he’s only lost 1 client in 10 years. What’s his secret? Well, he’s learned from speaking with his clients most agencies are exceptionally good at the front end. They sell their services with a dynamic attitude and promise that gets clients excited for working with them. However, client success is an important KPI and many agencies fail when it comes to customer service. There are two components to an agency 1) client acquisition and 2) client service. It is a lot easier to retain an existing client than to get a new one, so Jeff focuses on providing great customer service to keep the turnover rate at a minimum. He has trained his team to communicate with clients on a regular basis and have a quick response time for any questions they may have. Each client, big or small, should feel like they’re the #1 most important client. Remember if you neglect clients, they’ll probably start wondering why they’re working with you and start looking for other opportunities. Answer the unasked questions -- and if you don't communicate it, they don't know it happened. Setting Clear Goals to Get Clients On Board With Your Strategy The moment a client agrees to work with your agency, you should quit promoting yourself and immediately transition to learning as much as you can about that client. Focus especially on their goals, objectives, and the criteria under which your work will be measured for success. The more educated and informed you are about every aspect of their operations, the more valuable you can be to your clients. Jeff’s team typically gets clients to sign off on the strategic plan that they build together. They list the goals and objectives with clarity on who is responsible, the timeframe, and how success is to be measured. The overall strategy is documented and everyone on the team and the client is familiar with each step. It may be revised from time to time, but the client should always have access to the documents. Maintaining A Good Relationship With Clients Jeff favors constant communication with clients on a regular basis, even daily at times. In his opinion, this shows the agency is a very valuable resource for them. If there is no communication for three or four days, his team reaches out to make sure everything is in order - follow up on an email or run an idea by them. He also emphasizes how important it is to do this with both smaller and bigger clients. The amount of attention should not vary based on size or a client's portion to topline revenue. Moreover, this way of working helps you be more selective with your clients. If you don’t feel like communicating constantly with your clients, then there’s probably an issue there. Don’t take in clients that you don’t want to communicate with. You’ll start resenting them and feel burnt out. Adapting Your Agency To a Changing Market The one constant in life changes, and in the agency world, you better be ready to adapt to a changing market. Jeff has had a long career and in those years he has learned to adapt to the internet, websites, and social media. New things are coming now with novelties like the Metaverse and NFTs which he says he will leave to his team to understand and educate him. To adapt to changing times, he likes to hire young professionals who understand and are using the newest technologies. It’s so important to stay ahead of  new trends because a lot of the work marketing firms do has to do with consultation. Staying on top of emerging technology, educating and informing clients about new tools is the best way to present new ideas to your clients. However, Jeff says he is careful to not portray his team as being good at everything. It’s better to actually be great at one thing than to pretend to be good at everything. As a client, he always asked agencies what they were great at. If they answered everything, he knew they weren't a good fit. Your Goals Should Reflect the People You Want to Work With It's important to have clear goals of what you want to accomplish in your agency. Your goals should go beyond a revenue level. Go deeper with your goals and really create a future vision. What type of lifestyle and freedom do you hope to have? What do you need in order to really love your work and your business? Do you know what sort of people you want to work with? For his part, Jeff credits his love for the business a being selective with which clients his agency takes on. In 20 years, he has been fortunate to never have felt like quitting. Regular communication with clients does not frustrate him because he actually likes the people he's working with and doesn't have any “nightmare clients.” Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.

Are you planning to sell your agency at some point in the future? How are you preparing to make the process easier for yourself and your team? Our guest for this episode created a lifestyle business that allowed her to lead the life she wanted. When she decided to sell, she realized the business was already set up to work without her, which made for a pretty seamless selling process when the time for an acquisition came along Jodie Cook is an entrepreneur, writer, and athlete who started as a freelance social media manager. She created and successfully ran her social media agency, JC Social Media, for ten years -- even growing it during the pandemic. She's sharing the story of how she grew her agency and sold it, without an earnout, in 2021. In this episode, we’ll discuss: Why she decided to sell her lifestyle business. How she prepared for the selling process. Why you should hire a broker. Sponsors and Resources E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions. E2M is a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Building and Growing Her Agency As often happens with agency owners, Jodie started as a freelancer and went on to create her agency once she had too much work to handle on her own. To promote services, she went to networking events telling people she was a social media manager until she got a few clients. After a while, she got to a point where she had a full-time job worth of work for herself and could choose between continuing as a freelancer or building a team. As for hiring, Jodie says she stuck to hiring other social media managers. It was a role she knew and could evaluate and train for and as a result, she developed a successful training process. However, she also sees her agency could only ever grow as far as her own knowledge would allow. And in hindsight, it would've made sense to scale by hiring for roles that are not her strength. Setting Up a Lifestyle Business Agency owners get into the business for various reasons but at some point, we can all expect to have some degree of freedom. Jodie found herself as the owner of a big agency where everything relied on her and didn’t feel happy. This is when she did something that would change her life and her agency. She created a document with four columns where each column represented a step for how the business would start to change to a lifestyle business that could run without her. This was a very important exercise that would later allow her to be better prepared for a sale later on. The four columns contained: Every single process that happened at the agency Who was in charge of every task (at that moment, it was pretty much all her) Who would be in charge in the future (either by getting promoted or looking for a new hire) Her plan (actions she needed to take and even dates) Growing the Agency Through the Pandemic and Beyond Back in March 2020, just as the world changed with the pandemic, Jodie had been running her agency as a lifestyle business. She usually traveled for a couple of months of the year and the business ran very well. She was no longer needed there all the time for things to work correctly. This all came crashing down with the start of the pandemic. Clients in the hospitality and travel sectors were suddenly out of business and the agency shrunk by about 25% in one week. The shift meant Jodie got back to being very much involved in the business. Initially, she tried to figure out how to make a shift in the changing economy. This included a decision on whether or not to lay off part of her 16-member team. After a team meeting, they decided to carry on, secure the clients they still had, and work to look for new clients. The agency offered online webinars, replacing all their in-person events, and started to build the business back up. They not only managed to get back to where the business was before March 2020, they actually grew past it. Preparing to Sell a Social Media Agency With the agency back on track, Jodie asked herself what was next. She could easily go back to having a lifestyle business, but she really didn’t want to be pulled back by another emergency like this one. So she made the decision to sell in August 2020. Once she got intentional about an acquisition, Jodie started to reach out to people that knew more about the subject and could point her in the right direction. The key is not discussing an agency sale with your team and just having a small group of trusted people who can help you navigate the process. Keeping it quiet until you have signed agreements saves you from hearsay and speculation by your clients and team. She eventually started working with a broker who clarified how to prepare for the sale process. Basically, it entailed setting up processes, a second tear management team, and documentation. Jodie was relieved to see most of this was already in place because of how she set up the agency to begin with. This gave her the opportunity to sell faster and be comfortable meeting with potential acquirers. She wasn’t selling in a desperate moment, loved her team, and actually raved about them so it was genuinely easy to convince buyers how great her agency was. Furthermore, this helped her feel more like she was interviewing the buyers instead of them interviewing her. Successful Interviews with Potential Buyers When discussing either a sale like this or even interviewing prospective clients, you want to feel in control. The person who is more eager to speak and prove themselves has lost control of the meeting. A possible buyer might even think you have something to hide if you seem too anxious. As Jason advises, you want them to speak first because whoever speaks last is now in control of the meeting. Also, this way you can listen to them talk about their agencies and their plans for the future. Jodie listened to potential buyers first and then offered relevant information about the agency. If she had spoken first, she would probably go on tangents that didn’t really matter to them, which could ruin the meeting entirely. Letting the potential acquirer speak first also gives you time to evaluate them to see if their agency is a good fit with yours. Remember, culture fit is one of the most important aspects of a successful acquisition. Selling Your Agency Without an Earnout All in all, the purchase process took six months, which is pretty quick for this type of transaction. There were two months of meetings with potential buyers. This was followed by two months of heads of terms with three of them, and then two more months of due diligence. Initially, the three offers they got included an earnout and tied the purchase of the business to Jodie's role in earnout period. Basically, they wanted her to take care of the team and sales which would get her more involved in the business rather than stepping away, which was the goal. Ultimately, she was able to convince the buyers against the earnout. Clients tend to grow attached to agency owners in the sales process and they only want to deal with them. They agreed to have no earnout and the handover process took two weeks. It takes a lot of confidence to get the deal you feel is best for you. Don’t be scared into accepting the first offer-- have a number in mind before negotiations begin and be prepared to wait for it. Is it Important to Get an M&A Broker? Jodie did consider handling the sale by herself. If you commit to learning everything you need to learn for this process, it may be the best course for you and your agency. However, looking at the hours she would have to invest into this each day (at least 10 or 12) she decided labor would be best put into continuing to grow her agency. She opted to look for and hire a broker. If you’re working with a broker, remember they are incentivized to get you a sale but not necessarily to get you the best possible deal. Sometimes brokers won’t educate you on whether you could be making a better deal, so remember to learn as much as you can about the process. Have the confidence to say no and wait for a better offer. It will save you a lot of regrets. When looking to hire a broker, Jodie discovered many don't charge based on the completion of the sale. They charge a monthly fee and hence they may not necessarily be as invested in selling your agency. Because of this, she made sure to ask for completion rates and chose someone with a very high completion rate. Jason also recommends using a broker that charges an upfront fee, another fee once you get to the LOI, and a percentage of the exit. No recurring fee. This means they have more skin in the game are more invested in selling your agency. Life After Selling Your Agency Life after your agency’s sale could be more difficult to adapt to than you imagine. A lot of agency owners feel depressed and purposeless after selling their life’s work, and it’s understandable. Your "why" for selling should be very clear from the beginning. Additionally, you should start planning for your post-sale life and have other projects in mind so you can find your new purpose. Jodie visualized the sale and had in mind the exact amount she wanted from the sale. She also had plans to travel and start a new stage of her life. It looked slightly different than she had planned, as it was still the middle of the COVID restriction. However, she took the time to figure things out and even wrote a book, Ten Year Career. Niching Down to Be a  Successful Social Media Agency When she first started her agency in 2011 she says it was still possible to be a general social media agency. That is something she would change if starting an agency today. “I don’t believe you can be a general social media agency. I believe you have to have a niche,” she says. She would choose a vertical and horizontal niche. Then her agency would be experts in a specific space like Instagram for restaurants or TikTok for dentists. Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.

Does your agency's branding stand out from the competition? Is your offering and positioning unique? Does it establish your agency's authority in your niche? Today’s guest explains how he turned his speaking career into a thriving agency thanks to smart branding. Travis Brown is the founder and CEO of Mojo Up Marketing+Media, an agency focused on building unstoppable personal and company brands. Travis has been building his brand since long before stepping into the agency world. Now, with his diverse and talented marketers, he helps others figure out and grow their brands. In this episode, we’ll discuss: Getting started with public speaking Leveraging speaking engagements to grow the agency What works with branding. Sponsors and Resources E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Taking the First Steps in the Public Speaking Space Before ever thinking about starting his agency, Travis began a successful career as a motivational speaker. One of the most valuable lessons he learned was that the hardest part wasn't the speaking itself, it was getting people to pay him to get on their stage and speak. He hired a coach early on who taught him to invest time in figuring out his brand and unique positioning. Once he learned to do that for himself, it led to more than 2,500 paid talks over 10 years. Travis started out speaking about leadership, management conflict, and corporate training and eventually turned to youth speaking. Later on, he got a creative position as America’s anti-bullying coach, where he could use his experience while also having a big impact. This new role was an opportunity to get to another level as he toured the country and had interviews on national TV. In hindsight, this taught Travis the power of creating unique positioning in the market where, instead of competing with anybody else, he was complimenting them. After many years in that industry and working as VP of marketing in a bank, he decided to start his own agency to help other people build their brands. How Can You Start a Speaking Career? It is a powerful feeling to get up on a stage. It’s the sort of experience which changes how people see you. In fact, Travis now rejects invitations to tradeshows without a speaking engagement. He recognizes the moment you step on a stage people will look at you as an expert, which is a game-changer for elevating your brand. Try to link speaking engagements to your area of expertise and your core beliefs so you really come off as an expert. Travis always takes the topic he’s asked to develop and links it back to his branding, which is his specialty. How can you start? He recommends starting local. If you have a niche, look for an opportunity to do a breakout session. For example, if you specialize in marketing for dentists, reach out to the local dentist association. Once you do find an opportunity, build the presentation thinking like a marketer: Have video and engaging content. Offer valuable nuggets of info. Have a free offer to get them into the funnel. Following that, focus on leveraging the first speaking engagement into another and then another. Before you know it, you’ll be on a big stage with an audience filled with your ideal customer avatar. Being on stage will put you in the position of being the expert who can help them. They’ll get in line to hire you and your agency. Turning Speaking Career Into a Thriving Agency Travis says he has done it both the right and the wrong way. When he started his agency, he had accumulated a lot of experience in elevating himself and his brand. However, he didn’t know how to grow an agency. He got out there and got a lot of business for the agency with his brand. He soon learned it couldn’t be all about him. It had to be about the team and the focus really needed to shift to showcase their abilities. His first attempt to do this didn’t go as well as expected. It was done too quickly and it didn’t make sense to remove him so fast when his personal brand was driving all the revenue. He had to start over and get to a point where he transfers the knowledge and credibility over to the agency.         A perfect example of how to do this right is Gary Vaynerchuck and Vayner Media. Gary is the brand, but clients never expect to work directly with Gary himself. Travis has started to introduce his audience to his team, instead of just making it the Gary show. This is how Travis is rethinking his model. Building your personal brand can be the fastest way to bring in revenue for the agency. You just need to know how to do it correctly so the agency can shine as well. What Has Worked for His Agency’s Branding Right now Travis and his team are leaning into the “diverse and talented” core of the agency. They realized they have a very diverse team, which is not common at all. The team of 15 people includes black men and women, Asian women, and Hispanic and white women. That diversity led to opportunities with companies that are looking to: Work with a diverse agency, and Trying to figure out how to get a similarly diverse team. Now they are focusing on helping clients tell a story and develop an impactful brand through the lens of diversity. This way, they can help tell diversity stories by actually being one. They recognize that the diversity within the team helps them be that much better at telling diversity stories. A lot of agencies may say they are diverse but can’t actually back it up. Credibility is so important nowadays and people are able to tell if you’re claiming you can do something but not actually doing it yourself. For his agency, diversity has become an important part of who they are and it also works as a unique identifier, which all agencies need. What Are Your Agency’s Unique Identifiers? Travis believes your agency should have its own “three uniques,” which are three things that identify and differentiate your agency. Some other agencies maybe have one or even two similar differentiators, but no other company should have those exact three since they are true to your specific DNA. These identifiers will help you create your own unique persona as an agency. Those are your core values and how you will get very different types of people in your team to all work towards one single goal. Moreover, being clear about your brand and core values will help you find like-minded individuals to join your team. For Travis, diversity is part of the agency’s culture and what he is building. He is passionate about building a brand and telling a story to help his client make the most impact and he wants a team that is equally passionate about that. 2 Tips on Hiring and Client Success Travis likes to make sure that whoever his hiring is really passionate about doing the thing they’re hired to do. A lot of times in an agency you’re trying to fill some roles quickly. You end up hiring someone who is good but is not necessarily passionate about their role. In hindsight, he would really slow down and make sure people convince him that they want to be in their position within his company. He also wishes he had spent more time understanding how to create a better client experience. His agency's end product is always good, but the process was sometimes a bumpy ride for clients. Now he really wants to focus on making the entire experience exceptional from start to finish. Improving Customer Experience Remember that you may be celebrating every time to make a sale, but the client is probably thinking “did I make the right decision?” A good way to ease their anxiety is to immediately communicate with them after the sale. Jason likes to send quick personalized videos where he welcomes the new client and offers a few pointers. People are usually surprised to learn his videos are not automated. This is why it’s worth it to think about ways to make each client feel appreciated. That extra effort will definitely separate you from everyone else. Travis has learned there’s a difference between having a talented team and having a successful process. A successful process leads to a great experience. You need to map out every single instance within the client journey where you can impact and connect with them. As the lead strategist in his agency, he has also learned once clients get to a stage where they’ll be communicating directly with the team, they feel abandoned by him. He empowers his team and lets them do what they do best. However, he is working on finding a way this in a way clients still feel taken care of. As an agency owner, you need to position yourself as a thought leader and make it clear at some point clients will be working with the team.  Build up the team and make sure they know they will get better results than if you took care of every single aspect. Also, map out the process so they’ll know who they can turn to at each stage of the process. Should We Look for Mentors in The Agency World? After years of building his business from scratch, Travis admits he would’ve liked having someone to turn to. Nothing like that existed when he or Jason were building their agencies, but it is the entire reason behind the mastermind. Jason's goal is to be the resource he wished he had when he was starting out. Think about how many times you’ve given advice to your team or partners. You probably can’t seem to do that with yourself and it’s because you are too attached to your business and your way of doing things to see other possible ways to approach a solution to your problems. If you learn to ditch the competition mindset and look at it more as a community that understands and supports your most difficult challenges, then you won’t need a mentor. Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.

Is it time to pick another niche for your digital agency? There are tons of benefits of niching down. However, there are a lot of concerns about making big changes and focusing on a specific industry. The good news is there are ways to test out a new niche instead of going all-in. Alano Vasquez is the founder and CEO of Cyberwhyze, an agency that helps cyber security companies become brands that scale. Although he found success and even more room for opportunity in this space, he has had other failed attempts at niching down and understands it can be scary to choose a new market and fail. However remember, failures are just lessons to help you move closer to success! In this episode, we’ll discuss: Failures that become lessons learned when niching down. Testing out a new niche, rather than going all-in right away. Having the right team in place to give your freedom in your agency. Sponsors and Resources Wix: Today's episode is sponsored by the Wix Partner Program. Being a Wix Partner is ideal for freelancers and digital agencies that design and develop websites for their clients. Check out Wix.com/Partners to learn more and become a member of the community for free. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM First Steps and Lessons Learned When Niching Down Alano was working in sales at a tech startup right out of college. He was laid off, unfortunately, but when another startup hired him, he soon realized they had no marketing. He decided to use what he had learned and focused on becoming a full-staff marketer. After learning the tech industry and creating his own agency, Alano started working by with any client in the B2B space. He worked with education, healthcare, and fintech companies trying to offer as many services as he could. Within 3 or 4 years, the agency hit a ceiling of about $1.5 million in revenue. In trying to work out a solution, Alano noticed a lot of density with the agency’s cyber security clients. However, at the time he actually decided they would focus on the tradeshow space. It seemed like the right choice at that moment. Unfortunately, this happened right before the 2020 pandemic and the end of all in-person events for quite a while. They had spent time and resources on experiential and interactive marketing when everything went virtual because of Covid. How to Identify a New Niche for Your Agency After his first failed attempt, Alano and his team went back to the basics and turned to the opportunity in the security space he had noticed before. They focused on branding and content creation for cyber security companies. Before you pick a niche you pretty much start working with everyone so you can start to see what you like and do really well. You can see where you have success and start weeding out the things that you don’t like or do well. To his surprise, Alano quickly realized this new market presented a big runway of opportunities and was dealing. His agency Cyberwhyze started working with big brands sooner than he thought. He has rushed to create the capabilities in order to keep up with what the clients wanted from his agency. Now sees a possibility to double down on this niche. You Can Test Out a New Niche Instead of Going All In In hindsight, his agency would have niched down much sooner had he followed the advice he now gives to his clients. Some of his clients have a few verticals and try to put out a lot of broad-stroke marketing, trying to make it a one-size-fits-all. He finds clients tend to do this to avoid going through the process of creating an entire website for each vertical. Instead, Alano suggests creating a funnel with positioning that speaks to each specific persona. Agencies can also apply this same principle. There’s no need to build an entire website for a new niche, just build a funnel, test it out on LinkedIn and run some Google ads. It serves as insurance to make sure you’re not going down the wrong path and it might help you feel more at ease when you eventually decide to go all-in. The Value of The Cheat Sheet as a Lead Magnet Coming from sales, Alano and his partner knew very early on they did not want to give away strategy for free. They found a way to productize strategy and sell it as a core component of their work. A good way to attract new clients to your strategy is a cheat sheet. CMOs love them and even bigger brands use them. Cheat sheets come in many forms and you can use them as an opportunity to offer something really valuable while capturing data to continue marketing to your prospects. Cyberwhyze offers a cheat sheet paired with a video webinar that explains how companies can use it to their advantage. This has helped them build trust and led many people to their website. Even some big brands have contacted him based on their cheat sheet, so the agency didn’t have to jump through hoops to get their attention. It’s all about realizing there’s really no reason to offer strategy for free and later feeling remorse for it. Having The Right Team to Provide You Freedom in Your Agency Agency growth is also about continuing to refine strategy and making sure the right people are in the right seats. Agency owners are normally the think tank of the business and the ones coming up with all the client strategies. This could be because it is expensive to replace yourself in that role early on. In fact, most agencies don’t seek to do this until they hit the $5 million mark. For Alano, you have two options when it comes to replacing yourself in the strategy role: Do it anyway and maybe offer a profit share if you feel you can’t quite afford it yet. Keep trying to do all the strategy but become a bottleneck for your own business. For Alano, it made sense to do this early on, even before hitting $1 million. It was the best decision for his agency. His clients have come to really like the person he hired for this role. The benefit for Alano is peace of mind and freedom. He is able  to take a vacation and only work until 5 PM knowing the agency is taken care of by his head of strategy. The idea of replacing yourself might be uncomfortable. However, the sooner you can replace yourself as the head of strategy the better if you’re going after bigger projects. Remember, you probably started this business to eventually have more freedom. This resistance could also stem from the fact that they don’t know the steps they need to take to make sure that this new hire will work. Agency owners are usually visionaries and many struggle with execution or hiring for execution. You need clarity of where you’re going and who you’re going after from the beginning. This way, your team will feel empowered to make decisions without you. Once you have this, you can hire the right person to replace you. Staying True to Your Why as Your Agency Grows Alano had to figure out his agency’s growth before getting to this point. He went back to the basics to figure out his individual why and his agency’s why. But don’t forget, figuring out your why should be followed by communicating it to your team and revisiting it from time to time to keep everything cohesive. In this new stage, he is thinking beyond bootstrapping. He will now look at acquisitions, as he continues to explore his niche market. Want the Support of Amazing Digital Agency Owners? If you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency, go to the Digital Agency Elite to learn all about our exclusive mastermind.

Are you measuring your client retention rates? Do you trust your team will build good relationships with your clients? A lot of agency owners focus on making the sale but neglect customer service. Today’s guest will talk about why you may be losing clients and why it's important to have someone dedicated to client success. Khushbu Doshi is a customer service specialist with a passion for strategizing, making realistic actions plans, and following up on their implementation to get real results for agencies. She leads the customer service and sales division at E2M Solutions, a full-service white label partner that helps agencies scale their business. In this episode, we’ll discuss: What works when it comes to improving your retention rates. Effective agency-client communication. How you should structure your customer service. Closing the Gap Between Sales Promises And Customer Service Reality Agency owners commonly focus on signing the deal and ringing the bell when they finally get that client. As important that is, you definitely don’t want to drop the ball when it comes to following through in customer service. If you do, you’ll end up losing clients and wondering why you have a high turnover rate. Why is this so common? As a customer service specialist, Khushbu believes many agencies rely too much on the newest tools and miss the human-oriented approach. In a world of modernization, we all lean on technology to do things for us. This can be great for freeing up more time to focus on the things you do best. However, when it comes to customer service, it can lead to paying less attention to new customers and turning your attention to getting new sales. It’s common to see a discrepancy between the possibilities that agencies present to customers during the sales process and what actually ends up happening. To begin bridging the gap, we should focus on the fact that the values you show on that first call with the client should be consistent in their journey with your agency. This is the only way to really earn their trust. Managing Client Expectations After the Sale is Made We’re not saying you shouldn’t try to improve sales or use new technological tools available to improve operations. However, once the deal is closed and you have a new client, make sure all the promises made during the sale are actually met. If you promise the client they’ll have tons of communication and feedback calls and then you don’t really do that, you’re already starting on the wrong foot. Clients may be very skeptical at the start of the relationship and may even start to question the decision to work together. They need to feel reassured that you're a trusted partner who looks out for them and their interests. Think of it this way, if you don't communicate it -- as far as the client is concerned, it didn't happen. Take immediate action whenever is required and immediately act once the client expresses concern or raises a red flag. Make sure that their journey with your team is seamless. Structure the different stages of your agency sales process. Once a client gets to a new stage, introduce them to the team members they are going to be working with, rather than just having a salesperson just disappear. That same salesperson can be the one to explain from now on, they will be working and communicating with a different team. Also, as part of the onboarding process, define the process and roles within the agency. Let clients know who on the team is responsible for each part of the process so they know who to turn to when they have a question. How Often Should We Communicate With Clients? This will obviously change depending on the stage of the client’s process with your agency. In the beginning, clients need more frequent communication until they trust your methods and see results. Khushbu says her clients start with weekly meetings with the customer service team to ensure a seamless journey. This allows her team to meet clients’ expectations and learn about their concerns as they move through the first stages. Apart from the weekly calls, she underscores the importance of letting clients know exactly what the team is doing. They should know the research they are doing, the number of team members working on it, something new added to the pipeline, and the time dedicated to these details. Additionally, try to personalize communication with each client by offering alternatives and asking what they prefer (email, Slack, etc.). Remember sometimes a phone call is the best way to let your client know you are invested in the work you do for them. Nothing replaces a personal touch. Communicating to Clients in a Monthly Newsletter Khushbu suggests creating a monthly newsletter for clients detailing what the team has been working on that month. Rather than being skeptical about your work, they will start to trust that you know what you are doing and will be glad to have all details about the next moves. In fact, many agency owners who started to use the monthly newsletter come back to Khushbu to tell her it has helped increase retention rates. It’s all about attention to detail and customized communication with clients. Instead of spamming their inbox, prepare something that speaks to the specific plan and the results the team has been getting from the campaigns. They want real data and real information. When they get that, they know you are the one to trust. Plan for Success: It’s important that you are constantly planning new things for your client and showing them what you’re planning to do. As mastermind member Deacon likes to say, “if you don’t have a plan for your client, they’re going to give you their plan, and it’ll never work.” You’ll be forced to follow their plan and then have to take the blame once it doesn’t work. Should Agencies Have a Particular Role Around Client Success or Customer Service? There’s certainly a need for roles focused on making the customer service experience the best it can be. We see agencies with poor retention rates that have not realized the huge gap between the picture they presented in the sales call and what they continue to present to clients afterward. A client success manager role is a must since there’s a thin line between salespeople and customer service. This is why these teams need to work closely to make sure that the experience is consistent with the client from the onboarding to the customer service and deployment. These issues tend to create an internal battle. You may be very good at sales, but if you don’t believe that your team can deliver on what you’re promising then you’ll never get your client’s trust. You may be confident enough to sell but if you’re not confident about what will be delivered, clients will see right through that. Working on your customer service will bridge the gap between client expectations and the reality they get. Using automation is helpful for some things and frees your time up to focus on other things. Don't focus too much on a particular template or tool when the way to take your customer service to the next level is great, personalized attention. Want the Support of Amazing Digital Agency Owners? If you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency, go to the Digital Agency Elite to learn all about our exclusive mastermind.

Are you a proactive or reactive agency owner? It's common to come into the business not having a full understanding of what it takes to grow your agency or the type of issues you could face. Today’s guest tells us about the process of growing his agency, ditching the competition mentality, and how he wants to help agency owners prepare to grow their businesses. Bear Newman founded his agency Bear Fox Marketing with the belief that running a digital marketing agency specializing in SEO wouldn’t be as difficult as it actually was. Years later, he says it was one of the best things he ever did but admits he wasn’t quite prepared for some of the challenges. He has overcome a lot of obstacles, including losing clients that accounted for more than 50% of revenue. Now, with a full staff of employees and as he starts to step away from day-to-day operations, he crafted The Bear Fox Principle, a book to help prepare agency owners for what they should expect in the path of growing their business. In this episode, we'll discuss: Running an agency is more than just knowing how to do the work. Why one client shouldn't be more than 20% of total revenue. Why winning doesn't mean crushing every other agency. Sponsors and Resources Agency Dad: Today's episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit to get a phone call with Nate to assess your agency's financial needs and how he can help you. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Running an Agency Is More Than Just Doing the Work Bear was doing SEO work as a freelancer when he decided to open his own agency. “I may not have fully thought through that career move,” he jokes. At the time, his reasoning was just, why not? How difficult can it be? He soon realized there’s a lot more to running an agency than just being able to do the work. For starters, he had no idea what he should charge clients in order to run a successful business. For his first SEO account, he planned to bill $750 a month. That has definitely changed by now. He also had to figure out every side of the business, from sales to servicing and marketing. Now his agency has great client reviews and is the #1 rated agency in Idaho. He has employees that are much better at selling the agency’s products and work on marketing, ads, and creative content to keep the pipeline full. There's a Lesson in Every Experience While Growing Your Agency A lot of agency owners live by the words “if you fail to plan you plan to fail.” Bear does believe in the importance of planning, but he also knows that you can’t plan for everything and tries to figure it out whenever he can’t. For example, he once got a meeting to pitch for the largest pest control company in the Valley. The marketing director quickly let him know he was just meeting with him as a courtesy because he was never getting that account. Instead of feeling bad, he decided the experience of pitching the project would be enough. With that in mind, he went ahead with the pitch, trusting it would at the very least help him improve. In the end, he ended up winning the account. Once he did get the account, however, he had no idea what to charge. Some people may say he should have anticipated that, but for him, the beauty of the agency world is also having the confidence to say “whatever comes at me, I’ll figure it out.” Stages of Starting to Build Your Digital Agency Team For Bear, his search for an agency team really began when he realized he was unable to keep up with the workload. He wanted to maintain the quality of work and didn’t want to be everything to everybody. Like many agency owners, he focused on specific challenges. Bear knew needed a team of specialists who were really good at what they did so he could start to delegate tasks. When he started his search for employees, the most important quality for him was having the right attitude towards hard work and never choosing to do the minimum. Candidates were offered a client brief and the opportunity to create 2-3 Facebook ads and landing pages. If they only did two, he knew it wasn’t a right fit for him. It was important to find people who always strive to do everything above and beyond for clients and the agency. The Worst Thing His Agency Overcame The first year of Covid was the hardest for his agency. Two of his clients were making the transition to handling their marketing in-house and they accounted for about 53% of his total revenue. It was a really hard time, but he had to come up with a solution. He could either downsize and prepare for the loss in revenue or he could face the problem head-on. He decided to hire a sales team to get that revenue replaced. Of course, the team was going to need time to set in and build the funnel. Bear made the bold move of hiring two salespeople, just in case one of them failed. If this didn’t work, he would lose the cost of both of them, but it proved to be the right decision. By the end of the year, they grew by 70% and now one of those salespeople is his VP of Operations. Lesson learned: As Jason tells his Mastermind members, having one client account for 50% or even 20% of your revenue is definitely too risky and just not smart. Bear realized this and was already thinking about the options by the time the clients pulled out. However, he learned he needed to be more proactive than reactive in these types of situations. Agency Owner Transitioning Out of Day-To-Day Operations After hiring the right team to keep the agency’s momentum going, Bear is trying to extricate himself from day-to-day operations. At some point, every owner reaches a point where they need to spend more time working on the business rather than in it. Bear now oversees staff training and overall tries to keep an eye on their metrics, clients, and set the course for the future of the agency. With the right systems in place, the agency is getting all the pieces together to really accelerate its growth. For Bear, it’s like building an engine. The more expertise you have the better engine you can build, which will be your foundation to really move forward to the next stage of your growth. Why You Need to Ditch the Competition Mentality After all the ups and downs experienced with his agency, it was really important for Bear to create a guide for agency owners who are just starting in the industry. The Bear Fox Principle is a book about what it takes to build a successful digital marketing agency. A lot of agency owners don’t know what they need to understand in order to grow their business. The book goes over the metrics you should know and what you need to understand to make a campaign successful. It also touches on integrity and how you can do what’s best for your client as well as your company. Both parties have to win and not because you win somebody else has to lose. The “crushing your competition” mentality is a pervasive attitude in the agency world. Even Jason used to think that making it in his market meant crushing every other agency. That’s not true. You can learn a lot from people in your industry if you open up your mind. Remember that success is created, not taken from someone else. Even if you don’t get a particular account, that doesn’t mean you won’t get another one. You just have to be resourceful. Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.

Are you thinking about buying an agency? What about just buying one department of agency to compliment your service offering? There are many reasons to consider acquiring another agency, like client lists or intellectual property. However, buying one for its resources made the most sense for this podcast guest. When a few red flags made him take a step back, he found he could structure a deal in the form of buying just the department he was most interested in rather than acquiring the whole agency. It takes the right circumstances and aligned interests, but it worked for both agencies involved. Like many agency owners, Antoine Gagne started his agency, J7 Media, by accident. He hosted events that drove a lot of people in and realized he was good with social media. Platforms like Facebook and Instagram were still sort of new in Canada, so he started off selling social media management packages. He saw a lot of success in this market and eventually niched down to specialize in Facebook advertising. More recently, he has ventured to buy other agencies to expand his services. In this episode, we’ll discuss: Niching down to grow the agency. When to raise agency prices. Buying an agency department for the resources. Sponsors and Resources Agency Dad: Today's episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit to get a phone call with Nate to assess your agency's financial needs and how he can help you. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Getting to the First Million in Revenue and Beyond In his beginnings, Antoine started an agency that offered social media management and content creation services. He eventually decided to focus on an area that was most profitable and where the agency really shined. As a Facebook ads agency, they were so specialized it was easy for clients to refer them to people looking for these exact services, which led to a stable sales cycle. Antoine really recommends figuring out one service that you’re good at and you’re able to sell repeatedly. Once you settle on this, the key is to not give up, he assures. Keep going until it becomes easy for you to get more and more clients. At this rate, you will get to your first million in revenue. For Antoine, once you figure out how to keep it simple and go all-in on one service you do really well, you find that getting to the second million is actually easier. When To Raise Your Agency Prices Failing to recognize when it’s time to raise prices is a common problem for agency owners. Additionally, most fear this move will make them lose out on prospective clients. To be clear, the point where you find a service you can sell repeatedly while improving and consistently getting better clients should also be the point where you get ready to raise your prices and think about your profit. If you have an agency and you’re not focused on profit then you may be in the wrong business. The sooner you realize agency owners should not be looking primarily at just top-line revenue the better. In Antoine's case, the shift began with looking at the different parts of the agency and using this information to structure its prices. He figured out how much the agency was making from each department and then decided he wanted to make 40% net revenue from those parts of the business. Next, he needed to decide what the agency should charge and how many clients it would take to meet the goal. It basically took some backward math to figure out how the pricing. As to the fear of losing clients, all new clients agreed to the new price without further pushback. For their part, existing clients were gradually moved to this new price point at a different pace. Why You Have to Focus on Net Margin Instead of Revenue Getting J7 Media on the path to growth required a clear vision of the net margin Antoine was hoping for and adjusting the prices around it. A lot of people tend to start with the revenue in mind and plan around that. The problem comes when they don’t make any profit. This is a much more advisable way to go about it, especially if you plan to sell someday because your agency is valued on EBITDA. It’s normal to start out with the revenue in mind and slowly get to the point where you realize you should be focusing on net profit. It’ll change the way you look at your business and the way you approach your agency growth. This mindset prompted Antoine to create new services to improve the profit margin instead of thinking about revenue. It was the starting point to grow into a healthier financial situation. Why Buy an Agency Department, Not the Whole Agency There are various reasons to acquire a company, like their client list or intellectual property. For Antoine and his agency, it was about resources. On one hand, they noticed their clients needed more from them. On the other hand, a lot of things had changed with Facebook and it no longer made sense being positioned only as a Facebook ad agency. Clients were now looking for a one-stop shop that could do all the media buying for them. They looked into adding Google ads services, seeing this was the number one service clients needed at the time. However, they couldn’t just jump into this market 15 years later and become experts while still trying to figure out the Facebook changes. They ultimately decided to shop for an agency that could cover this new need. Antoine met with a few agencies and ultimately decided to buy not an entire agency but just a department. They didn’t need all the different departments, so they structured a deal where they could acquire only the specific employees from this department and the transaction was good for both sides. Structuring the Acquisition of an Agency Department Some people have never even considered buying just an agency department but it could be the perfect solution in some cases. Keep in mind a lot of agencies have more than they can handle and would gladly sell just part of their operations. Antoine was looking for a profitable Google ads department and in the negotiating process with this agency, he found out that employees in this particular department were not in love with that company anymore. The owner knew this and he knew it was a matter of time before he would lose these employees. In this way, the deal was beneficial for both parties. He encourages agency owners to do this when possible and try to craft the best possible deal. Remember not everyone wants to keep their agencies. Many people have other interests or goals and want to try different things. If you come at the right time with the right offer, most of the time you’ll find interest and will be able to complete this transaction. How Much Time Does It Take To Complete a Deal? How much time will it typically pass between the moment you’re interested in a company and the time you conclude the transaction? It will depend on the size of that deal. Small transactions like purchasing a department for under $1 Million take just a few months to complete. However, other bigger transactions take more time. If you dedicate 5-7 hours a week reaching out to companies of interest, the meetings will come. Antoine currently dedicates 5 to 10 hours a week to look at companies he would be interested in acquiring. At first, it can be overwhelming but he assures, that it’s not as hard as it seems and you could even end up wanting more. Open Your Eyes To New Opportunities We’re in a time of changes in the media buying space. A lot of things are changing and when things change many people quit. If you choose to be one of the ones who stay, then remember to open your eyes to the opportunities to buy agencies that are leaving a certain space. Want the Support of Amazing Digital Agency Owners? Do you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency? Then go to the Digital Agency Elite to learn all about our exclusive mastermind.

Annie Scranton, a former media executive, transformed her PR agency from a side hustle into a thriving business focused on media placement. She shares how strong branding establishes authority, helping agencies grow faster. Annie emphasizes the critical role of personal branding and crafting a solid elevator pitch. Discover her insights on leveraging connections and the importance of authenticity in client relationships. Plus, she explores the evolving dynamics of workplace culture in a remote world, highlighting its impact on employee satisfaction.

Are you doing your own bookkeeping? Are you paying too much for someone else to do it? You might be wasting valuable resources that could be focused on growing your agency and your profitability. In most cases, it’s not an agency owner's area of expertise and CPA's charge a ton for this service. It's worth it to hire someone who understands the scope of what you do and how to keep your books. Today’s guest is an expert in accounting for agencies and his company, Agency Dad, helps agency owners forecast their finances and establish a strong fiscal foundation for their future. Nate Jenson is a certified management accountant, internal auditor, and fraud examiner who founded Agency Dad, an accounting company that focuses on profitability for agencies. He offers bookkeeping services for agencies but their main focus is helping agencies understand financials and what’s driving profitability. Nate has been on the show before talking about the financial benchmarks and KPI’s that can help you plan for the future of your agency. In this episode, we’ll discuss: Why you shouldn’t do your own bookkeeping. The high cost of bookkeeping mistakes. How tracking time will help you improve profitability. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM YOUTUBE AUDIO LINK Why You Probably Should Not Be Doing Your Agency's Bookkeeping Bookkeeping is not the sexiest topic and most creatives are not interested in it. However, a lot of agency owners do their own bookkeeping, even when it typically isn’t their area of expertise. Nate advises against this for several reasons, although he admits there’s a point in your startup when it’s OK. There is a situation where handling your own bookkeeping makes sense. If you’re just starting, have only a few clients, one invoice a month, and no employees, then it’s perfectly fine. It can also be the best for you as you try to scale your agency and need to keep costs low. Once you start growing, the complexity of the data grows exponentially. You get to a point where maybe you just hired your first employee, have several clients, and diversify your service offering. Then tracking that data becomes more important and more difficult. And, knowing the data leads to making better decisions for future growth. Finally, you should also consider opportunity cost. If you started an agency, maybe you’re an expert on SEO or getting clients. Imagine how much money you could be making if you focused on what you’re good at instead of bookkeeping, which is most likely not your greatest strength. 2 Reasons Not to Use Your CPA For Bookkeeping A lot of people use their CPA for bookkeeping because they lump all the "financial stuff" in the same category. But a CPA and a bookkeeper are drastically different. And, Jason and Nate agree this does not provide the best results for your agency. This solution keeps your books clean and reconciled but Nate says there are several reasons he does not recommend it: It is the more expensive option. Most likely, you will overpay to have your accountant do your bookkeeping. However, more importantly -- CPAs usually keep books based on their tax knowledge. There’s nothing inherently wrong with that, however, on the backend, it doesn't help you make good decisions for running your business or to move forward.It all starts with the data entry and your vision for the agency. If you want to make smart growth decisions you need a good bookkeeper to help you with the data. What do you need to know from the data to make good decisions? Can you hire a new employee? How much should you charge? Can you give your team a raise? Imagine you want to sell your agency soon, you would probably have very specific questions about valuation and how the decisions you’re making right now will affect your business. When would you like to sell? In one year? Five years? In terms of the data, you have to know what you’re putting in and why so you can answer those questions in the backend. If you are planning to sell and do not know this information it could be a red flag to potential buyers. You should know the financial outlook of your agency at any time. If you want to have an opportunity to sell you should have everything in order. And if you want to sell in the future, you want to know what you can do as of now to maximize your value. The High Cost of Making Bookkeeping Mistakes According to Nate, 96% of data analysis happens at your data entry. This means that if you don’t know how to properly enter the data you will run into trouble. Overall, you want to do everything right in your bookkeeping from the beginning. Nate has been hired to “clean up books” and fix years of improperly kept data which sometimes takes months. If it’s too complex, he even prefers starting from scratch and rebuilding everything. Having the right systems and the right processes in place can even help save money you're already spending in bookkeeping. In one of the worst cases he’s ever seen, Nate rebuilt his client’s entire system and set up everything in a way so they were able to replace two full-time bookkeeping employees and replace their roles with one part-time employee. The Importance of Tracking Time for Profitability Based on experience, Nate says most agency owners are not tracking time with the data they measure. Usually, he gets some pushback when he mentioned it. However, most do admit they should be doing it, but their employees don’t want to. An agency's biggest overhead cost is your team’s time. If you don’t understand where people are spending the most time, you won’t be able to identify which client relationships are not profitable. Tracking time is a data entry task so if you have the systems in place where you can run payroll and track time, you can easily run reports that specify profitability per client. This way, you can identify which clients are using up most of your time. Rarely does Nate find an agency that isn't losing money on their engagements. What they need to do after they find this out is adjust and find out where they can raise prices or what things they need to stop doing. Sometimes you can even increase profits when you cut a service offering or stop making a specific product. Do less and make more money! How To Handle The Shift to Tracking Time  It’s common for your employees to pushback when you start tracking time. Jason recommends being very honest with your team and clearly explaining the agency will suffer unless some things change. It’s also important to reassure that you will not be tracking the employees themselves, but rather collecting necessary information for the business to keep growing. Make it mandatory, not optional and be ready to make non-compliance a reason for dismissal. Oftentimes, the employees who complain the most about necessary changes like these are not a good culture fit for the agency you’re trying to build. It will be the same with some clients and it’s ok if you decide to cut ties. How to Find The Right Person for Your Agency Bookkeeping Someone who is doing their own bookkeeping is also typically someone who is already overwhelmed. They have so much to do and they feel they can’t afford to hire someone else to help. With this mindset, it becomes difficult for them to see the benefits of making a change. A good bookkeeper knows your industry, understands data analysis, and can put those numbers in front of you to help make decisions. They will be able to show where you are losing money and what can happen if you make some changes. Of course, you also have to be careful. You can’t just hire anyone to do your bookkeeping. Some people ask their support staff, like a receptionist to do it. You may be freeing some time for yourself, but it will probably create problems further down the road. Mistakes like incorrect invoicing can cost your agency thousands of dollars, so make sure to put in the effort and choose the right person for the job. It doesn’t have the most expensive solution, but it's important to  really understand the role and the difference between someone who understands accounting and someone who knows how to use Quickbooks. Pro Tip:  Nate's suggests a quick test to determine if someone really knows about accounting is to ask them this quick question. “Does the debit increase or decrease my assets?” If they say increase right away, you’re good. If they hesitate, they’re not thinking like an accountant. Want the Support of Amazing Digital Agency Owners? If you want to be around amazing agency owners that can see you may not be able to see and help you grow your agency, go to the Digital Agency Elite to learn all about our exclusive mastermind.   Today's episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit to get a phone call with Nate to assess your agency's financial needs and how he can help you.