I had the opportunity to be invited on the AgoraPulse Agency Growth chat on Twitter. I’d like to take their question and answer format to provide a more in depth explanation to the tweet size answers I gave (if you’re curious to see those, follow me on Twitter @rherochoa)
Today we will start with Question 1:
Q1 How do you know when it’s time to scale your agency?
First off, let’s define our terms.
By agency, we mean a service-based business that employs a team (w2 or contractor) to provide a marketing service to customers who do not want to or have the capacity to bring that kind of work “in-house”.
By scaling we are referring to the means to support the growth of your business. Since service-based businesses tend to be labor-intensive, traditional “economies of scale” are not as achievable as manufacturing widgets for example. That being said, we will tackle this problem in question 5.
Scaling means growing, which leads to more revenue. If you have the desire to grow your business I highly recommend answering the “why” behind your “where do you want to take your business”.
Scaling for growth’s sake will not be fruitful since there are growing pains involved with this process (I speak from experience) and a large portion of that will be stressful.
“I want to grow my business to $2 million,” you say.
“Ok, but why?” — I’ll ask you. This isn’t for you to attribute afuture meaning of the potential inflow of revenue you’ll earn i.e. “I want to have financial security for my future generations”.
This question is more for you to truly assess where you are in your business AND LIFE — I can’t answer this for you. You have your own values and vision for yourself. Ask “is more better?”.
Once you appropriately order what is important to you and understand the costs (not only financial) to grow your business, we can proceed to designing the “how” in our next Spark.