MiAwards sponsor The Wow Company on fast growing Agencies

Make your projects more profitable

It's one of the biggest challenges that agencies face: Delivering an amazing project, whilst still making a profit. We see so many agencies walking the tightrope between keeping the client happy and ensuring the job doesn't overrun as a result of additional client requests. The reality is that there is no simple answer to solving this challenge, but there are lots of little things that you can do to help you achieve more profitable projects. Here's some things that might help:

• Use technology – If you're using spreadsheets to manage projects, or have jobs scribbled on a whiteboard, it might be time to use some of the great technology that's available to help you run more profitable projects. Software such as Streamtime & WorkflowMax can make a massive difference to agency efficiency & therefore profitability.

• Scope it out – I know it's boring, but unless you properly scope out exactly what work you're going to do (and what you're not going to do) it'll only come back and bite you on the backside further down the line. A day spent scoping a project and getting it signed off by a client will save you two days further down the line, or will mean that you can bill for these two additional days, where previously you'd be working for free.

• Limit amends – As part of your scoping document, it's important to be clear about how many rounds of amends there will be. This avoids the situation where clients are constantly tweaking. If you state at the outset that the fee includes two rounds of amends, then when they request the third round, it's chargeable. Simple as that.

• Get sign-off – Get your clients to sign-off each stage of the project using e-signature tools such as Rightsignature or Echosign. By asking your client to sign that the stage is complete, it draws a clear line in the sand and avoids endless tweaks. You can also include a reminder in this document that any amendments will be chargeable after this point.

• Group changes together – If you have clients that send you change requests every 5 minutes, it's incredibly costly to make all these changes individually. You have to stop what you're doing, switch projects, make a small change and then switch back. A much better way to do it is to get your clients to send you amends all in one go. If they still send you things every 5 minutes, you'll need to have the internal discipline to group all these changes together - it'll save you tons of time.

• Have a minimum fee – If you don't charge clients for amends, they'll have you flitting between different shades of blue for an eternity. By having a minimum fee for any changes, e.g. £100, you'll force them to think about how important it really is to "make the full stop a bit bigger." When there's a price tag attached, there's a good chance they'll decide it wasn't that important after all. And if they do want to make the change, then at least you get paid for it.

• Be upfront – It's important to let clients know how you work right at the outset. If you lay down the ground rules in your initial project scoping document, you've got a chance of ensuring your projects are profitable. If you don't, you'll have no recourse with the client and you need to be prepared for your profit to slip away.

Have financial information at your fingertips

We haven’t met a creative agency yet that set up in business to spend more time reviewing accounts or staring at balance sheets, but unless you really understand the important numbers in your business you've got no chance of growing a profitable agency.

The good news is that you don’t need to be an accountant to get to grips with the numbers. Most successful agencies are run day-to-day on just a few critical pieces of information. In fact, research shows that many agencies are actually more successful as a result of focussing on just two to five Key Performance Indicators (KPIs) that really matter.

We've noticed that our top performing creative agencies have taken the time to setup dashboards for their businesses, which contain their KPIs, available at the click of a button. Having this key financial information at their fingertips allows them to make better business decisions and ultimately leads to more profit and faster growth.

What’s on your dashboard? What KPIs are driving your business forward?

Prioritise sales & marketing

We're accountants, so we're not going to start dispensing marketing advice (especially not to creative agencies). However, when we researched our top performing clients, we noticed that all the agencies that had reached £1m+ mentioned that a key turning point for them in their growth journey was when they decided to prioritise sales and marketing. We spotted a number of common traits amongst the top performing creative agencies. They all had the following:

• An individual responsible for sales and marketing (it didn't fall in between 2 directors).

• Time allocated to complete sales activity, e.g. every Tuesday & Thursday, or the first 2 hours of each day. If you try to fit it around project work, you'll fail every time. Sales & marketing requires ring-fenced time.

• Targets for generating opportunities (not just sales figures), e.g. number of meetings or pitches completed.

• Sales statistics, e.g. where the client heard about them, pitch value, conversion rate, final project value. This helped them work out how many pitches they needed in order to hit their billing targets - the stats don't lie.

• A plan – Not 'War & Peace', but a simple one page plan that showed them what they were going to do this month to generate clients.

• An engaged team – It wasn't just the directors' job to generate new business or additional fees from clients - the whole team were aware of the targets and were on the lookout for opportunities to help clients further (and bill for it).

• Speculative time – A small amount of time each month was set aside for speculative pitches to existing clients. Agencies would pick a client (one with potential to grow) and get their team to come up with new ideas to pitch to them - this helped expand accounts to other departments, geographies and even subsidiaries (at low cost).

Get out of the day-to-day

This is easier said than done, but unless you step away from the coal face, you've got no chance of building a £1m+ agency. We noticed that the top performing agencies we surveyed were masters at delegating and building teams around them that could do the work. The founders were brave when it came to recruiting (they did it early) and were constantly looking ahead to help plan what freelance resource they'd need.

If you feel that you've not got the right team around you to delegate to, then you need to do something about it… and fast. You're also going to have to get really good at letting go of the day-to-day tasks, to allow you to concentrate on the bigger picture.

Do you really want to grow your agency?

This isn't a trick question. There is nothing wrong with remaining small, especially if you can work with clients that you love working with, on projects you love working on. Being bigger does not necessarily mean bigger jobs, cooler clients, more money or working fewer hours. Before you embark on growth, think carefully about what YOU want to achieve from your business. Whether that’s fame & fortune, or just an easy life, it’s important to understand what you’re in this to achieve. Once you’ve worked that out, you can then build the agency that YOU want.

MiAwards is open to all agencies across the UK and the entry deadline for MiAwards 2013 is today, but extensions are available on request. For more information visit the MiAwards website or contact nikki.gillies@thedrum.com.