For many agencies, January is a time of maximising budget spend for the first quarter, but it’s also when planning for the year ahead’s growth takes place in earnest. Smaller agencies often struggle with planning for growth, and a key factor in that is understanding where their value lies, and what actions can increase that value.
Cameron Coutts, Agency Partner Product Management Lead at agency growth advisory firm, Waypoint Partners, shares his opinion on how smaller agencies can grow in 2023.
Almost all agency leaders are motivated and excited by the prospect of scaling their businesses. It is a recognisable measurement of success, and growth can provide strong defence against economic difficulties. Yet, many agencies are missing an important component of driving growth – fully understanding the value and performance of their model.
Fully grasping an agency’s asset value, and where improvements can be made, is instrumental in creating strategies to unlock further growth opportunities. Many SME agency leaders face similar issues when it comes to getting the best out of their business, employees and even themselves, to reach the next level.
Our recent survey of 150 UK SME agency leaders and founders discovered that 50% struggled to fuel their agency growth through sales and marketing. What may be surprising is that almost the same number, 46%, recognise that they struggle with the task of creating and building long-term business value.
For the 46%, it can mean questions such as, “what could my business be worth?" and "where could it perform better?" are easily lost.
For agency leaders, it can be difficult to understand their agency’s value when facing the daily challenges of running their business. Fleeting issues could easily take leaders away from looking at their agency with a wider lens. It is a difficult balance knowing when to be ‘on’ the business instead of ‘in’ the business, however, it is essential when building achievable growth estimations.
With the ongoing recession, this is an appropriate moment to assess agency value. Recessions are an economic curve-ball that may not automatically cause your business to backslide, however, it does require understanding your value proposition and how your services can positively impact clients to come out the other side successfully.
An honest asset valuation is a wise starting point when planning to expand a business and grow revenue. Once a realistic valuation is in place, a more informed plan to prioritising performance can be implemented. Leaders can then optimise agency efficiency to make sure work is as effective and streamlined as possible.
This requires looking critically at processes and assessing where there is room for improvement. Fine-tuning performance can have a transformative impact on agency growth through building more efficient practices.
Until now, expert professional advice on growing and improving agencies has only been available to the larger, more mature players in the market. However, smaller agencies can have greater prospects of achieving exponential growth with increased support to maximise their value and performance.
With these challenges in mind, Waypoint Partners developed Agency Partner specifically for agencies with ambition who are still early in their growth journey, who have smaller turnovers, and less sophisticated sales processes and abilities.
Through our unique position in the market we find ourselves in a place where we can take the years of insight we have in supporting scaled and mature independent agencies and filter that advice down to those who need it most. By democratising growth advisory services to support SME agencies, we can enhance overall agency performance, sales efficacy, and the value of the sector as a whole.
When agencies fully understand their value and the metrics they need to improve to scale they can set realistic projections, know their strengths and their weaknesses and set about achieving the ambitions in their growth plans. This, combined with the highly valuable services they provide, will help put them on the path to growth – no matter the climate.