Starting a profitable agency in 7 months – The ‘learn from our mistakes’ guide
An honest insight into the treacherous undertaking of starting an agency and the multiple mistakes made in the first years of business, according to Sim Kaur.
Tip 1: Find your reason for starting your own business
Launching your own business is extremely challenging. You leave behind job security, a cushy wage and the familiar and swap it for uncertainty, stress and the ever-present fear of failure.
So, that being the case, you have to have a damn good reason for doing it.
For me, the motivation was a need to live a life with meaning and values that I could impart to my children and to women who wanted to make a change but didn’t believe in themselves.
Tip 2: Get shit done
It ain’t glamorous but it’s what pays the bills and keeps the enterprise afloat.
You may do work that you personally don’t really love and that’s okay.
You are playing the long game and a ‘suck it up’ mentality will get you to the next level where you can start to be more selective.
Tip 3: Be competitive with your pricing
Being super competitive on price at the start enables you to build a client base.
We were mindful that in order to achieve profitability, we needed to be as lean as possible and tier our pricing.
And that’s why I opted for the retainer model. My strategy was to undercut pricing and provide high levels of value and service.
Instead of 40 hours a week, I sold 40 hours a month. Instead of a FTE at $100K I sold a full team and delivery at $60K a year.
Imagine a customer getting a full marketing team at 40% savings and getting director level seniority. No brainer, right?
Tip 4: Grow big or go home
The first three months are manic. For me, it started with one company wanting event management for 3 events, and then suddenly it was 5 clients wanting end to end event management for 150 events. (Gulp!!!)
Right then and there I realised that I needed to implement a structure that would free up more of my time.
By doing this, I would be able to focus on bringing in new clients and let my team take care of the day to day work.
Tip 5: Hire for the future
One of the running jokes in our agency is that I married Rakz just to have a free resource.
Rakz
But the truth is, he has put his heart and soul into the business from day 1. And that’s what you want. People who share your vision and are prepared to endure the stormy seas it takes to get there.
This means sometimes, at the beginning, they are not getting paid what they are worth. But then, when business improves, you can reward them for their loyalty.
Tip 6: To outsource or not to outsource, that is the question
In the early days, our clients were requesting a lot of deliverables we couldn’t do in house, so we decided to outsource.
But for us, this didn’t work.
Yes we had healthy revenue, but the margins were diminishing because internal project management of overseas resources was more costly than the savings it generated.
Many of the deliverables needed common sense and a strong element of local context.
And these could only be achieved with a significant investment in project management, internal Q&As and training.
So instead, we invested in our first full stack developer. Someone who could build anything a designer threw at them.
Tip 7: Do’s and don’ts of recruitment
We made a LOT of mistakes in our early years. And we’re sharing them here so you don’t make the same ones.
○ Don’t use a recruiter till you are massive.
○ Outline exactly what the Job Description is.
○ Don’t hire people just because you know them. Hire according to your values.
○ Get a good HR company and spend money drafting your company’s HR Policies.
○ Make sure you have resilient practices for when unexpected events like global pandemics happen.
Tip 8: Systems Process via Project Management
One of the most critical elements for an agency is being able to manage and deliver multiple projects, whilst keeping track of budget.
We started with Waterfall project management and learnt the creative process on how to take a brief from start to finish. We then incorporated free tools to manage projects and Google to map processes.
We also started to evolve our pricing models from retainer to fixed prices.
Tip 9: Look after your money and your money will look after you
Always make sure your accounts and finances are in order.
● Engage an outsourced Bookkeeper.
● keep a separate bucket of funds for your tax bill.
● Get 14 day payment terms where possible to manage your cash flow.
● Ensure you have a process in place for debt collection if clients don’t pay.
Simran Kaur, CEO of Pounce Marketing.
According to LinkedIn the agency was founded in 2017 You haven’t been clear about what happened 7 months ago or why you’ve chosen that timeline? Curious. [edited]
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