What I wish I knew before I started my agency

Anyone who has started a business has their own take on what to embrace and what to avoid in the first year, but Simon Rutherford says step one is to avoid working with start-ups.

Running a successful agency is about finding a balance between vision and focus. You have to be able to focus and block out the distractions to achieve the vision you have for your agency.Simon Rutherford

I have learned so many things as the owner of an independent agency; however, if I was to share one lesson, and only one it would be this: don’t work with start-ups (unless they can prove they are well funded).

When we started Slingshot seven years ago, we were 10-feet tall and bullet proof. We were also incredibly entrepreneurial (or so we thought), and would take on pretty much any opportunity that came through the door.

To a degree you have to do that when you’re first starting out. I’m incredibly satisfied with what we have achieved; however, if I was to change anything it would be to take back all the time we spent working with other start-ups, because in reality we were just helping other businesses grow while taking the focus away from substantively growing our own business quicker.

The issue is one of opportunity cost. The time spent on working for start-ups, particularly those with little ability to pay the bills, could have gone straight into building sales and pursuing clients who could actually remunerate us fairly and on time.

I remember a colleague coming to me in our fourth year of business. He had just started his own creative agency and wanted my opinion about working with another start-up. After telling me about the start-up, he asked what I thought.

I said, “It looks a great idea on paper, however I am going to give you some advice, pass on it and focus on establishing your own business”. He was not expecting that reaction.thinkstockphotos-post-it-notes-business-team-partnership

I explained that his priority right now as a new business owner was to pay the office rent, salaries, infrastructure costs and no doubt his mortgage and other expenses. Working with this start-up would only drain the business of valuable time that could and should be spent chasing down paying clients, and ultimately would deliver little compensation in the foreseeable future.

So if you are a new agency owner you need to ask yourself one question… will this new client put cash into my bank account next month? If the answer is no, then you’d better have deep pockets.

Instead you should be focusing on building your sales pipeline and getting new business through the door that can pay their bills. It’s a frightening proposition, certainly.

There is an understandable tendency to grab any work you can when you’re just starting out, but in the long run it will only prove to be a distraction and one that could ultimately damage the development of your own start-up.

Once you are established (five years plus), you can then allocate time to more speculative opportunities.

See the full program and secure your tickets to Mumbrella’s SAGE conference on Wednesday October 12 HERE 

Simon Rutherford is CEO of media agency Slingshot and guest speaker on the ‘What I wish I knew before I started my agency’ panel at this year’s SAGE conference.


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