8FA recently became a minority partner in a rapidly growing agency.
As I began to get a lay of the land, I started seeing common missteps and unknowns from first-time rapidly growing founders.
Read this to keep your business growing fast!
The Context
The agency that we recently became a partner in has added over 1 million in annual recurring revenue within the first six months of the year.
This is the founder’s second agency, but he is still very new and has grown up business this large. (we are getting close to the $2 million per year run rate).
The Common Unknowns
1- ICP
ICP stands for ideal customer profile, it means the specific type of client we want to work with. Currently, this business does not have one. Up until now, they have said yes to every client that will pay them.
This has led to massive growth, but this also leads to a lot of operational issues on the backend you need to be aware of:
Inefficiencies
If your team works with 30 clients, and within that sample size, there are 3-5 different types of clients, it is very difficult to get economies of scale.
- Each client has different FAQs, issues, and fires that need to be addressed (especially when you’re newer)
- Your team members need to learn how to handle each different client
- Your business requires training & SOPs on how to work with each ICP
I can go on. With each variable that you add to the equation of your business growth, the more complex and harder it becomes to run and operate your business.
Solution: My objective with this business is to ID 1-2 ICPs we can narrow in on and say no to everyone else. By doing this, we can build A LOT of good processes to ensure our operation is extremely strong and scalable.
My advice to you: Within your first 12-18 months (or sooner), if you’re growing fast, pick the 1-2 ICPs you’ll say yes to and refer everyone else out. I promise you, this will enable you to grow WAY faster.
2- Intentional Reflection
This founder, and his team, are growing so fast, that they haven’t been intentional about improving the right components of the business at the right time.
When you are a founder drinking through a firehose, it’s very easy to knock out the tasks right in front of you. The opportunity cost of this though is that you will oftentimes work on the wrong task/project.
This may not seem like a big deal, but I promise it is. When we work on the right project and improve the right components of our business, our time leads to disproportional returns.
Solution: We will be implementing a weekly business review (WBR) meeting this upcoming week. The WBR is a meeting where we intentionally review the previous/upcoming weeks:
- Data/performance
- Issues/bottlenecks
- Goals/items accomplished
In an ideal setting, one team member runs the meeting and creates a brief to present the data, findings, and recommendations. I’ll save the reason why a brief is better for another time, but trust me on this one, I got this straight from my time at Amazon and Jeff Bezos.
3- Management & Reporting
To add the cherry on top of all of this, in a rapidly growing business, with a founder with limited expertise in management, there are a lot of gaps in talent development.
This founder has managed primarily based on his intuition which at scale simply does not work.
He is overly trusting his team members and reactively fixing their mistakes…This leads to churn and stress.
Solution: Build better data management and reporting systems. I told this founder that management, when done correctly, is simple.
Team members should have VERY clear data points & action items to accomplish weekly.
- Weekly project management tasks per department, per client, per team
- Reporting on capacity, client fulfillment, and client results
- Data targets we either hit or miss
For the most part, this business is missing A LOT of this, causing the founder to have to work through issues with his team members manually. When we build all of our reporting tools, his team members will simply report on their daily progress, which raises accountability and makes it easier to forecast & problem-solve.
Once this is built, we turn around management energy into development and training which improves the business and results.
Knowing what to build or how to build these can be complex or hard, feel free to book a call with us here, if you need assistance with this.
4- Scaling Forecasting
In the world of e-commerce, an effective e-commerce business should hit a monthly sales target and aim to hit it without overshooting it. The reason for this is primarily an inventory management angle. If we oversell, it will go out of stock, causing issues.
In a rapidly growing agency, I recommend doing the same thing. It is in your best interest to grow slower, uncovering the issues as they arise in an easier and more manageable way, than to rapidly scale.
The ONLY way you’re going to hit 8 figures is by building an elite operation. Ironically, oftentimes, the faster you grow the longer it takes to get there because of all the fires that pop up and all the added mistakes.
Solution: Pick a net new client target per month that is modest, build a waitlist, and be patient.
I know all of this can seem like a lot, and honestly, it is.
If you need help scaling your agency, book time with us today!
