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The Top 5 Challenges for Growing Agencies (And How You Can Overcome Them)

Running a small to medium-size agency is a rewarding experience, but it is not without it's share of challenges. Because most agencies follow a similar business model, whether they focus on PR or branding, Design or SEO. Here are five of the biggest challenges agencies face, and some ideas on how you can overcome them.

Challenge 1: Hiring the Right People

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An agency is only as good as the team behind it. From the onset it is vital to have the best people in your creative and administrative teams to drive the agency forward. Often, these might not be the most highly qualified individuals. Rather, they are the people who are driven by their passion for the work.

How to Overcome

Hiring the best people begins with offering something those people can't get anywhere else. In the agency world, this usually doesn't mean a high salary. But flexible time, free lunches and other benefits can help attract the best and brightest. Take your time during hiring and make sure you get the best.

We wrote an article recently offering tips for attracting and hiring the best people at your agency.

Challenge 2. Establishing Systems and Processes

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With ideas flying all over the place and staff working on different aspects of the same project, clients wanting to approve proofs and make changes, and demanding to see how their fees are being spent, the agency workflow is often chaos. It's just like the human body - if one part of the system breaks down, the whole things stops working as well as it should. Establishing a system for workflow in a thriving agency can be a real challenge.

How to Overcome

These days, workflow management can be done quickly and simply from a cloud-based system. WorkflowMax is the ideal workflow management system for small-medium sized agencies. You can track time, manage jobs, collaborate on projects, get client feedback and run reports that gives you actionable business intelligence. Because WorkflowMax is cloud-based, you can access the system at any time, from any device connected to the Internet, from anywhere in the world.

Challenge 3: Demonstrating Results

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Image courtesy of Danilo Rizzuti at FreeDigitalPhotos.net

As a team of creatives, you're always thinking about interesting ideas, being bold, and creating a brand people can connect with. But all your client cares about are "results". Results this, results that. Why do they care more about click-throughs and leads generated than the awesome new video you've created for them?

How to Overcome

The fact is that in this era of digital marketing, all campaigns have some form of tracking, and clients will expect this. You need to track results.

You'll need to do some work to put systems in place to measure what you do, and to offer interpretations on those measurements. There are many free tools you can use, such as Google Analytics, and you can also purchase tools with special features. Be prepared to spend some time investigating the best resources and learning which results the client wants to hear about.

Remember, tracking the results of your campaigns is beneficial for all parties - the client gets to see what their money has brought them, and you get marketing material to showcase your expertise in running successful marketing campaigns that gets results.

Challenge 4. Client Overdependence

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You've landed that dream client - the big-name brand that will put your agency on the map. The problem is, in order to do the best job you can for the client, you've diverted most of your resources toward focusing on them, at the expense of your other clients.

Over time, your other clients start dropping off, and more and more of your business income is coming from this one client. You've essentially created a situation where your agency is acting as a "sub contractor" to the client, and this means your company and staff are assuming all the risk. This can be great if the client pays well and on time, but what happens when they decide to move elsewhere? What happens if their company goes bust?

How to Overcome

The simple answer is to diversify your client base, and avoid putting all your eggs in one basket. But if you're dealing with your dream client, this can be extremely difficult to handle democratically. Use the experience you've gained with your current client as leverage to enter a growth stage.

If you’ve built a specific technology or a custom solution for a big client, think about how that can be utilized by other clients or even create a spin off product out of it that you can sell to the market directly.

Either focus on diversifying your client base and bring in more staff to handle the extra workload, or specialise into one specific aspect of the client's work (e.g. graphic design instead of a full-service branding agency) and give the rest of the work to other agencies. As a specialist agency, you'll be able to take on more clients and avoid over-dependence.

Challenge 5: Growing too Quickly

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You might think business growth is a good thing, and for the most part it is, but an agency is never in as much danger as it is during a growth phase. In an creative industry where the business works so closely with the client, there's a real danger that the quality of the creative work and client relations will suffer during a growth period.

Pressed for time and under pressure to perform, it is common for agencies during a growth phase to lower the quality of their output. But this is a dangerous slope, and can have disastrous consequences for your reputation.

How to Overcome

During a growth phase, it is vital you take on new staff as soon as possible, so that the workload is properly distributed and your creative team has the time and headspace they need to do their best work. Having a robust workflow management system and a solid client relations policy in place BEFORE a growth period will ensure that nothing falls between the cracks. And don't be afraid to analyse your processes and find new and more efficient ways of doing things - you may find some leeway in one area that can help you keep the balance.

What are the biggest challenges your agency is facing in 2013? How have you solved some of the above challenges? What advice can you give to struggling agencies?