All agencies dream of one day being able to scale. But there is one main differentiating factor that sets apart agencies that are successful in doing so, and that’s the initial structure from how they build their companies, made to scale rather than grow from the get-go.
There are steps PPC start-ups can take to promote growth and prepare for the scale-up phase. By establishing efficient processes and making innovation the center of priority, an agency has a good shot at achieving scalability.
Breaking Down Growing vs. Scaling
Growth
You’re growing, so yes, naturally, revenue, market share, and resources increase with it, but at what cost? Do you follow a trend yet? The cost rises as does growth, trapping most agencies in a vicious cycle they cannot break towards achieving scalability or exponential growth.
Scenario:
A digital marketing agency is a start-up with six clients and is about to close eight leads in the pipeline. Great, this means more revenue for the agency. However, does the team have more bandwidth to spare and resources to serve these new clients? Realistically it will require hiring more team members to sustain the level and quality of service expected from them. Therefore growth does come without its losses.
Scaling
On the other hand, scaling takes growth to another level by ensuring your revenue gain surpasses what it costs to keep operations and increased business afloat. You have extra cushion to help innovate and grow your agency at a healthy rate.
Daniel Marcos defines a rule of thumb when wanting to identify scaling as “when you scale, you are growing at 2x the industry average but your expenses year-over-year remain stable”.
Scenario:
Growth had never been an issue for Z Digital, they could never understand why profits from growth invested back into the operations, resources, and people never left anything to spare. To begin focusing on improving existing products and potentially adding another product to their service offering, they had to find a solution. A manager suggested some new platforms and an outsourcing company that could manage many day-to-day tasks that take up time from teams. Z Digital realized that they finally could understand what to leverage to get on the road to scaling instead of just growing their agency. Scaling requires maximizing efficiency through resources and technology with the alignment of processes to achieve exponential growth.
So to simplify:
➜ Growth is linear with cost and revenue.
➜ Scaling is exponential where revenue increase surpasses the cost.
Why Aren’t Most Agencies Scaling?
The cost-efficiency benefit of scaling is what attracts many start-ups and why they become obsessed with its pursuit.
Most PPC agencies hit a dead-end when trying to keep up with the ever-evolving industry of the digital marketing world. Having to innovate, improve processes and upgrade technology frequently is not an easy task. If you do not have the right team to work with, well, then this is where most PPC agencies fall into the growth category and can kiss any hope of wanting to scale goodbye.
“Most start-ups stay small or die. Only a handful scale-up…” – Verne Harnish, Scaling Up.
The 4 Stages Of Growth Towards Scaling Success
PPC agencies that are actually on a path towards scaling go through stages. These stages have different needs, goals, and processes to acquire to move on to the next.
Stage I – Start-Up
Number of Employees: 1 – 5
Management: The owner is usually calling the shots and making sure everything is running smoothly.
Goals: Product development and establishing a business model.
Stage II – Grow-Up
Number of Employees: 6 – 15
Management: A team now takes on the burden of task fulfillment, and the owner focuses on the bigger picture of running an agency
Goals: Sales, client acquisition, and hiring valuable team players.
Stage III – Scale-Up
Number of Employees: 15 – 250
Management: Owner settles into a CEO position type. A niche product is in the works, and processes are being refined and improved for operational efficiency.
Goals: Scaling becomes the primary focus while emphasizing brand awareness within the digital marketing industry.
Stage IV – Industry Leader
Number of Employees: >250
Management: Leaders and managers become essential to carry out CEOSs vision, mission and reach company goals.
Goals: Become a competitive leader in the industry and promote consistent innovation for your agency’s products and technology.
Goals of a Scaling Mentality
Product Innovation
Build a plan and strategy that shows continuous innovation for the products or services you offer.
Client Acquisition Strategy
Stay in touch with the marketplace, prospects, clients, and sales team to predict and respond to emerging trends.
Investors
Because additional cash flow is always welcome, know that investors love to fund scalable solutions.
Operational Processes
Ensure everyone is moving in the same direction and repeatedly doing what’s needed to achieve the company’s goals following established processes.
Resources
“The right people in the right roles doing the right things, supported by the right systems.” Delegate effectively to the right people and put systems for accountability, measurement, feedback, and rewards.
Profitability
Focus on the core business structure and workflow strategy to ensure profitability exists in every step of scaling.
Challenges When Scaling a Start-up Agency
Scaling will always come with its obstacles, and knowing what these obstacles are and how to overcome them is essential to continue your scaling trajectory.
Why Not Successfully Grow & Scale?
Growth alone presents the setback that requires an increase in resources to be sustainable; however, what if you were to scale and grow at the same time?
With the right tools and resources, your PPC agency can scale powerfully and efficiently. Outrun your competitors by becoming the more brilliant and faster player in the digital marketing industry.
Learn how to streamline your agency’s workflows and cost-effectively offer PPC through innovative solutions created with company’s just like yours in mind.
