Advice for New Agency Owners (from an Agency Veteran of Two Decades)

By Michael Reynolds | | 7.14.20

Owning and running a digital agency is hard. There's no way around it. At the same time, it can be incredibly fun and rewarding.

I am a member of quite a few agency communities and I often see newer or startup agency owners asking for advice.

I owned an agency for 23 years and then sold it in 2018. Now I co-own Inbound Back Office and a software (cloud CMS) company. If I had to do it all over again, I would say this:

1. Keep it simple. Always have a fierce bias toward simplicity. Most agency owners make things way too complicated when it comes to process, pricing, service, etc.

2. Lean into getting really good at websites. So many agencies focus on marketing services and then do websites as an afterthought. Websites can be very profitable if done well and they are "sticky" services that can keep clients around for a while. Also, I'm biased but you should build your websites on Zephyr :)

3. Wait to hire people until you absolutely have to. It's tempting to want to add overhead early on but don't add expenses too soon. It can cause stress and instability.

4. Don't be afraid to be selective about your clients. Have an abundance mindset. It's difficult to turn away clients but if your gut says no, trust your gut. I've made the mistake of putting up with too many terrible and disrespectful clients in the past and I will never do that again. For every awful client you turn away, there is another great client waiting to work with you.

5. Don't obsess over complex metrics (see #1). Focus on the basics (profitability, cash flow, margin per project) and learn to accept that there are some things you will never be able to measure. Let it go and focus on running your agency.

6. Get really good at public speaking. Educational presentations and webinars are a fantastic way to establish yourself as a leader and if you produce some really great presentations and consistently deliver them to the right audience, it's awesome lead generation.

7. Don't borrow money. Debt will drag you down.

8. Create systems and processes for everything. Document them and use them.

9. Keep 2-3 months of expenses in the bank at all times for reserves. You will be very happy you did because there will come a time when you need to use it.

10. Pay yourself what you're worth. So many agency owners don't pay themselves very much because they want to reinvest in the business. Once you get past the startup phase, it's important to pay yourself a real salary. Make it a line item just like any other expense. There is tangible mental (and real business value) in paying yourself a rate that you would pay any other CEO of your company. You carry yourself differently and it makes a difference. Plus, if you decide to sell your agency it helps increase the true value of your business.

As I said, owning an agency is not easy, but it can be the most fun you have in business and it can be a great source of income. Focus on these things and you will have a greater chance of success.