A successful businessman once told me, “Don’t work in your business, work on your business.” This seemed like good advice but given the size of our team, it just wasn’t practical. Or at least that’s what I thought.
Like most entrepreneurs I have a Type-A personality and want to be involved in every aspect of my company, diving into the trenches with my team, working with clients, producing designs and tweaking code. While this may have solved some short term problems (ie: not needing to hire another designer), it also hindered me from growing the company.
With Proposify, even though I’m still heavily involved in day-to-day operations, I force myself to step back on a regular basis and work on the business itself. Here are some tips to help you come up for air and do the same, even if you only have a small team.
Focus on your markets pain, not your own
All too often, agency owners get caught up in their own needs. I need more clients. I need my clients to pay faster. I need a new developer.
What about your clients? Sure, you focus on their needs while you’re working on a project they’re paying you for, but what about potential clients or past clients? Are you thinking about how you can steer your company towards addressing their deepest pain or any changes happening in the market?
It’s been said that chef-owned restaurants are more likely to fail because chefs cook to their own tastes. Chefs are like artists; they love their craft. They are creative and want to make daring choices. They want to expand the palettes of their patrons. But sometimes people just want a plate of spaghetti and meatballs. Owners who are dispassionate are better able to look objectively at what the market wants and deliver it to them.
Kevin Springer, my business partner, ran a live music club back in the early ’90s in Maine. In case you forgot or are too young to remember, rap/metal was pretty big in those days. Kevin hated rap/metal (he was a child of the 70s), but it packed the house. His club became a staple in the local scene and much of that success was based on him ‘not cooking to his own taste’.
Always remember to step back regularly and focus on what your market's big problems are so you can better position your company to solve them.
Track your sales pipeline
How much money is in your sales pipeline right now? If you asked yourself “what’s a sales pipeline” then pay attention to this:
Every time you have a proposal either in the works for a new or existing client, the value of those proposals — however much the project is priced at — combine to make up your sales pipeline.
The more deals (or bigger deals) you have on the table, the bigger your sales pipeline. If you know your average close rate on a proposal is 50% and you have $150,000 in your pipeline (assuming all the deals are of a similar size) then, realistically, you're going to close $75,000 worth of business within the current sales cycle.
The pipeline, your close rate and the average length of your sales cycle are key performance indicators you want to keep an eye on because they give you a reasonably accurate forecast of how your business is going to fare over the next few months.
If you are just focused on day-to-day stuff - pitching leads, working with clients etc. - and don’t have your finger on the pulse of your sales activity at a high-level you could find yourself in a precarious position where your current projects are wrapping up with no new ones to take their place.
I believe that even if you hired a dedicated salesperson, you as the owner need to be the leader in the sales department and know at all times where you’re at and what new opportunities are coming down the pipeline.
Keep an eye on the financials
Unfortunately when you’re an owner, looking at your finances is an emotional rollercoaster. When times are tough, reality staring back at you is terrifying. When business is booming you’re gleefully counting the cash.
Instead, try to emotionally detach yourself from the numbers. Financial metrics are an indicator of how things are now and how they will be in the short/long-term future.
That's why having a good bookkeeper is essential. You have a business to run and don’t have time to log and categorize expenses, send out invoices, manage payroll, call the IRS (or CRA or whatever your 'taxman' is). Let someone else do this for you, but make a habit of taking a day out of every month to sit down with your bookkeeper and review where you’re at. Have a CPA on hand who you can meet with on a semi-regular basis to guide you on tax-preparation and find holes in how you’re currently managing your finances.
Always have an up-to-date balance sheet, profit/loss statements, and accounts receivables/payables. This combined with your sales metrics arms you with information you need to make key decisions for your company, like:
- Should you make that next hire?
- Do you need to lay anyone off?
- Do you need to generate more leads or focus on closing the deals you already have in the pipeline?
- Are there any financial patterns or trends - good or bad - that you can identify over the last year?
- Should you buy that gold-plated sign for outside your office or tuck the money away for quarterly taxes?
- Are you incurring any expenses that aren’t returning value? Better cut them out.
This is not a fun part of owning a business, but it’s an essential one if you want to stay profitable and grow long-term. Burying your head in the sand doesn’t help you or anyone else (except maybe the sellers of gold plated signs).
Get out of the production department
As I wrote earlier, if you came from a production background (designer, developer, writer), you naturally want to stay on the ground level and work on projects with your clients and team. I think this is a mistake for two reasons:
- It distracts you from your real responsibilities of running the business. It’s like the captain of an airplane wanting to get out of the cockpit now and then to deliver drinks to passengers.
- Clients begin to rely on you to solve all their problems because you’re the owner and bypass your staff, thinking they’ll get better service by contacting the big cheese.
That’s why it’s so important to keep your client projects at arm's length. Of course, you’ll want to stay abreast of what is happening in your company. Sit in on the production meetings to find out about any challenges your team is having, when a project is likely to finish, and how satisfied your clients are with the work.
Keep an eye on the quality of work: If you’re a designer by trade, you want to make sure that your team isn’t producing shit (either because they are too rushed/overworked or you made a bad hire). If you have a development background make sure you’ve got solid processes in place and the code is being tested for quality. But that is a lot different than laying the bricks yourself.
Learn constantly and share it with your team regularly
“Leadership and learning are indispensable to each other.” – John F Kennedy
As a leader, you have to be constantly learning if you want to earn the respect of your team. It’s frustrating for staff members when their boss is out of touch.
That doesn’t mean you won’t learn from your team — after all, you may not be aware of the latest CSS techniques if you’re not in the trenches writing it every day — but you should also be teaching them.
Here’s a good process to follow:
- Use Feedly to store all of your favourite blog feeds in one place.
- Check Twitter, Facebook, Google+ and LinkedIn once a day for interesting posts
- You don’t have time to read everything you see on the spot, so use Pocket to quickly bookmark any of those links you come across so you can read them later
- Always have one book on the go related to your industry or market
- Attend industry conferences at least once per year (and bring your team if you can afford it). They're good for networking anyways.
- Use Buffer to share interesting posts on social media
- Encourage your team to follow you on social media (and follow them back) where you are all be sharing articles you find interesting
- Have a lunch-and-learn once a month where you and your team can each take turns sharing new information that you’ve come across and discuss how you can apply it to your company
This might not at first glance seem like you’re working on your business, but in an agency, your people are your product. The more they know, the better they will be at their jobs, and the more value they will offer to your clients. Happier clients = more repeat business and referrals.
“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams
Impart knowledge to anyone who will listen
What else do you do with all of that great knowledge you attain? Of course, you share it with the world. As the owner, you should make blogging and public speaking a part of your routine.
Content is not just something you do when you have time for it. If you think of it that way, you just won’t do it. Content production is an activity that is directly connected to building your personal brand and acquiring valuable business leads. Paul Boag is a good example of this. He's built a great personal reputation by podcasting, and in turn, it's helped his agency get big clients.
In addition to online content, you should also get out and speak at conferences and workshops. Go to Eventbrite and take a look at local events in your area that are happening over the next month or two. Often event promoters will put out a call for speakers and, even if they don’t, it never hurts to get in touch with them to tell them about what you'd like to talk about so they’ll think of you next time they need one.
Another way to share your knowledge and combine that with direct sales is to call up your companies on your client wish list and offer to do a free luncheon in their office to teach them about a subject you're an expert in. This gets you in the door with them in a non-intrusive way where you’re providing value and increasing the odds of them hiring you for their next project.
These suggestions are meant to help you with your short-term and long-term goals. The takeaway should be that as the owner of your agency you need a birds-eye view to see what is going on now, and where your company will be in the next 6 months, 12 months and 5 years.
What else do you do as an owner to work on your business?