In this episode of Inbound Agency Journey, Gray interviews Jason Blumer from Blumer CPAs about agency finances and useful tips to help agency owners get to the next level.
Jason began his CPA firm with a partner 15 years ago that is remote that specializes in the creative, marketing, and design agency niche. During the past 8 years, he has successfully coached owners to build their dream agencies.
Here are the main takeaways from the interview:
3 Common Mistakes Owners Make
The Wrong Clients
This is a difficult one for an agency owner to admit. To change it, you may need to fire your current clients. If you're already in a tough space with growing your agency, that's a hard risk to take. However, focusing on the right niche and clients that align with your goals as will allow you build a better business and better serve your clients. You'll also enjoy your agency much more.
The Wrong Team
When growing, you're usually trying to do what you can to get out of doing the work yourself too, and may not have thought out the hiring decisions. You may have hired too soon or not the best fit for long term growth, but rather a short-term fix. Being able to recognize this and make the necessary changes to get the right team members on the bus will help you grow more quickly.
The Wrong Price
Pricing is another big challenge for agency owners. To profitably grow your agency, most agencies need to raise their prices. This can be uncomfortable and raise a lot of fear over losing clients or losing out to the competition when competing for a contract. Agency owners need to take this step though if they ever want to build the business they want and get the direction they want.
Get Coaching to Break Through
Jason gives the same advice that Brent from Ugurus gives. If you want to hit your goals and break through that glass ceiling, it can be useful to turn to a coach. Coaches will help you breakdown and think about things. They'll help you flip how you're viewing the problem and what you need to do to solve it. You are usually making assumptions in your business, and a coach can help you break those down and see differently.
Take the Smart Risk
If you want to get anywhere with your agency, you're going to have to take risks. This doesn't mean taking dumb risks with money or with your life, but smart business risks that have the upside to grow your business but may seem insurmountable. Outside insights can help you step outside your business for a bit and evaluate the risk. Some things that may appear far too risk a step for you to take, once you step back may make a lot of sense.
If you're having a hard time in a part of your business or lack a particular skill or mindset to help you reach your goals, a partnership may be what you need. Make sure you do your due diligence and begin slowly in approaching a partnership, it's easy to get screwed over.
Selling Your Agency
This is what every agency owner wants to know. The average is to make your business valued at 1x sales revenue. An agency's worth is mainly based on the staff and processes since there is usually no intellectual property. A strong brand will help increase the value of your agency and a consistent deliverable model. Having a high-profit margin, which would be 20-25% as a service agency, usually indicates you have one of both of these factors and means your agency is differentiated from the rest of the market. At the end of the day though, there's no consistency to agency valuations, and in a negotiation, the final result may be surprising.
If you want to contact Jason Blumer, you can reach him on Twitter, BlumerCPAs.com or his personal website, JasonBlumer.com.