Enterprise Strategies
Enterprise Strategies and Agency Growth
The foundation of any agency is having a Financial Plan and an Operations Process you can rely on. Together, these represent your enterprise strategies. All things come back to money and as an agency you must strive for operational excellence.
The Financial Plan informs all decisions you make. It should be built with a look to the future a minimum of a year ahead, but typically longer. I realize it will change, it is iterative, but it’s your best guess on what will happen. It takes into account historical performance and projects what is probable going forward.
- I usually recommend an agency principal build Base Case, Best Case, and Worst Case scenarios. Needless to say, it’s easy to project fixed costs but revenue projections and variable expenses are much more difficult.
- Revenue or sales is hard and is your best guess – it should be built both Top Down (% increase from history) and Bottom Up (by client).
- Once you have applied a revenue projection and your fixed costs, you can begin to determine variable expenses like marketing budget, headcount expense, etc.
The Operations Process will insure profitability – on time/on budget! It will help differentiate you from your competition, will help you retain clients, will help build recurring revenue, and much more. BUT, you must be careful not to over process. Profitability, more than revenue growth, should be your goal.
Insuring client expectations and your deliverable are in sync will determine profitability. You build your process dependent on the type of engagement and budget authorized. If you are using a cost-based model (as opposed to value pricing), your pricing and project scoping ability impacts this. The larger the budget, the greater your ability to build project plans, func and tech specs, etc. Fixed price or project pricing incents efficiency; time and materials pricing incents inefficiency, but may be necessary if the scope of the project is unclear.
I always recommend both an internal (team) and external (client) start-up meetings be scheduled to clarify any issues and determine the right amount of communication.
For your agency, do you have the right tools to monitor a project’s development? And who is monitoring it – strong project management makes a difference and BTW you should always build in at least 20% PM time into any project budget
- Typically a project budget is established in Base Camp, MS Project, or many others.
- Time tracking is critical – there are so many of these.
- Is there a change management system for change orders?
Communication is key to the success of your enterprise strategies. In your operations approach how do you communicate with the client throughout the process – status reports, weekly calls, an extranet, etc.?
I always recommend both an internal (team) and external (client) wrap-up meetings. This is great learning time and a great selling time. You learn what went well, what could be done better, etc. and you have the opportunity to present new ideas or add-on business.
This is just the tip of the iceberg on how you can build profitability into every project – there is so much more!
How Good Are Your Enterprise Strategies?
In over 10 years of consulting, I’ve had the opportunity to work with a wide range of agencies, 50+, and in every case, enterprise strategies have been key. As an agency specialist, I’m uniquely qualified to help you understand the pros and cons of various growth strategies as applied to your highly specific circumstances.
As this series of blog posts and videos continues, I’ll walk you through alternative agency growth strategies that can be applied alone or in conjunction with others. So make sure you get on my email notification list using the form in the right hand column on this page.
And if you’d like to have a personal chat about how your agency is dealing with growth (or the lack thereof) then please contact me directly. I’d be happy to provide you with a free consultation.
