A FINANCIALLY HEALTHY AGENCY
Your agency is top dog for creative but still not making bank? Here are our top tips for a financially healthy agency!
Typically agencies are founded by top creatives. People who saw the billings they were responsible for, said ‘screw it, I want that cash’, and set up their own shop. It’s not often these same creatives also thought to themselves ‘I feel that I am equal parts creative genius, entrepreneurial whiz and business management guru’. With that in mind, what are healthy agencies doing to ensure they are keeping the doors open and the clients and employees coming back for more?
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Cash Rules Everything Around Me
Money talks and bullshit walks and nowhere is this truer than running your own business where you are responsible for making sure everyone gets paid on time. Signing a big account doesn’t mean anything until the money is in the bank and there are a few simple things you can do to make this happen.
- When signing a new client ensure you have a robust service agreement in place that clearly details the fees and payment terms. Walk your client through these so they are crystal clear on what is expected of them. Get it signed and save it someplace safe and don’t be afraid to enforce it.
- Be diligent with your invoicing. Invoice regularly throughout the job as it’s easier to collect multiple small invoices than it is to collect one large one after the job is complete. Be sure to send reminders as soon as payments become overdue and don’t be afraid to stop work until you’re paid. As soon as clients realise you’re a soft touch your invoices will go to the bottom of the pile.
- Be the master of your cash flow. Map it out and know when any potential shortfalls are coming so you can plan for them well in advance. A panicked phone call to your accountant and bank the day before isn’t how to make friends and influence people.
- Find out some more tips on cash here via our free tips sheet and via this blog post.
Priority one in any agency should be keeping your team happy and engaged with their work. Outside of ensuring you salary offerings are comparable to the rest of the market, there are a bunch of things you can offer to set you apart from the competition and to keep your team focussed and dedicated.
- Performance bonuses tied to business results not only drives business performance, but it also makes your team feel they are part of the success of the agency, and not simply an employee. Keep bonus systems simple and rewarding – the more confusing the system the less inspiring it will be.
- For your top people rewarding their efforts with skin in the game can be a brilliant way of driving engagement and ensuring commitment. Recent legal changes mean that offering share options can be a tax effective way to get the results you’re after, plus it means you can run around talking about “stock options” like you’re Zuckerberg.
- There are countless ways of rewarding your team outside of cash offerings. Examples include: charitable donations to a charity of their choosing, birthday leave, external training opportunities, work travel, working from home, and soft-skill training for things like effective written and spoken communication.
- Find out more via this blog post.
Why did you set the agency up in the first place? Why do your staff and clients keep coming back for more? The most successful agencies have a very clear reason for being and the owners have articulated why they are in business – that is to say they have figured out what they have to offer their clients (the value proposition), where they want to take the business and why they set up shop in the first place.
- The value proposition refers to the point of difference the agency can offer the marketplace, this is the agency’s competitive edge, and it is what sets it apart in the sea of agencies all claiming to be unique, creative and top quality. This can effectively become the elevator pitch for the agency, the key defining attribute that sees it on top drinking scotch and not on the bottom drinking box wine.
- Goal setting for the business is paramount. If you don’t have goals for the agency, how do you know if you’re winning or losing? (Yes, it is a game.) Typically the goals of the business will tie back in with the personal goals of the owner – it could be around retiring early to live on an island or something less exotic like being mortgage and debt free. Whatever it is, it’s important the goals are articulated so the agency can set in place strategies to start achieving the goals and getting to where the owner wants it to be rather aimlessly wandering along. Find out more about goals here.
Bottom line, one thing that all successful and healthy agencies have in common is that the owners take the time to step back and work on the business itself, rather than spend all of their time working in the business on client work. Running your own agency can be incredibly rewarding, but also a lot of hard work, so make sure you’re efforts are moving the agency in the right direction. Clever owners also know when to seek professional help!
If you’ve got issues in your business you don’t seem to be able to get on top of, why not get in touch? Not only do we provide a full suite of bookkeeping and tax services here at Generate, but we’re also able to help with business coaching, strategy workshops, business plans and much more. You name the problem and I’m sure we can help.