Lessons on how to accelerate the growth of marketing, creative and other types of agency

1. http://evanrubentein.com
http://cremabusiness.com.au

2. Evan Rubenstein
• Part 1: The 7 Deadly Agency Sins
What they are and what they do to your business
• Part 2: Key Agency Best Practises
Basic elements that you put into practise immediately
• Part 3: Scaling
The ingredients of a business that keeps on growing

3. Evan Rubenstein
• What makes an Agency Business scalable
• Why so few have been able to successfully do
this
• What the critical elements of scalability are
• How it gets easier and easier as you get bigger

4. Evan Rubenstein
• 32 Years in business
• 2 Corporate CEO roles over 13 years (before going
into business on my own)
• Founded 3 businesses, bought/sold 3 others
• Business coach and growth strategist for 16 years
• 130+ clients – over 500 jobs created
• 11 multi-millionaires

5. Evan Rubenstein
• I work with business owners to get them to understand
and actualise the full potential of their businesses
through better knowledge, understanding, decisions and
actions
• I provide businesses expertise on strategy, planning and
the management of client acquisition, operations and
plan execution
• I assist business owners with exit maximisation strategies

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An entity in command of specialist
skills performing work for or on behalf
of another

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• Been running my own business for a few years but
– I put in more effort than any of my employees
– For all the effort, I’m not making real money
– I’m working 60, sometimes 80 hours a week!!
– I struggle to find or retain good quality staff that I can rely on
• I’m frustrated with
– Too low a strike rate when it comes to sales?
– Bad cash flow. Every payday is an ordeal
– Constant high stress is really taking its toll
– Not landing ‘dream clients’ that will help
build the firm?

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• Business is steady but I’m unable to grow my
profits enough
• I still have to work hard personally and have a lot
of stress at times
• I am concerned that in the long run, I won’t make
the money I want
• I see some of my competitors managing to do a lot
better that I am – what am I not doing?

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• To educate you about agency growth drivers
• Open your eyes as to what you could achieve
• Understand where you stand in relation to
your agency’s growth journey

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PARTICIPATE
Is the Failure to
Give 100% and you’ll
get 100% ...
Failure
The Only

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To make sure you maximise
learning …

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To get real insights, we must
operate from a position of

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<9?
Why do so many agencies never get beyond ~9

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• Clear goals
• Documented, executable steps to achieve
goals
• Financial projections that validate the plan
• Documented resources required
• A timetable for execution, with contingencies

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• Forces you to work through:
– Value proposition
– Marketing assumptions
– Operational plan
– Staffing plan
– Financial viability
• Baseline for monitoring your progress
• Easier to solve problems on paper than in the real world
• It’s how you drive your future

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• Growth not predictable
• Staff highly challenged to operate strategically
• Too much dependency on owner
• Not compatible with
– Consistent growth
– Value building

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• Come across as a generalist
• More competitors
• Customers looking for ‘specialised knowledge’
• Marketing is much more difficult

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• A particular market that you focus on
• A strategic position that you occupy
– Reduced competition
– Specialised expertise
– Increase visibility and build your brand
– Easier and less expensive to market to

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“ I don’t want to lose out on all the other
business out there!”

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The silent question
• Makes the fit clearer
• Reduces buyer uncertainty
• Brings prospects closer

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• Lead generation is much easier
• Sales conversion is higher
• Project profitability is better
• Client Retention is better

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• Erratic revenues and profits
• Puts business at risk
• Poor hiring options
• Cannot drive a consistent top line
➾Growth unable to be adequately funded

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• A carefully designed and planned, core
business initiative
• A commitment to mastering the intricacies
and disciplines of an industrial strength
process

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• Hiring “another sales guy”
• Abdicating responsibility
• Getting a quick fix

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• An organisation by design vs default
• Arrangements generally only good for
immediate future
• Management structure undocumented
• Practical situation often at odds

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• Inadequate organisational design
 Poor role definitions
 Inadequate levels of accountability
 Below par individual and team
performance
• Regular and confusing changes to roles and
responsibilities

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Good systems
support
Constructive
performance
appraisal system
Documented
Role
Definitions
Documented
Organisation
Design

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• Cost overruns
• Time overruns
Massive hit to the bottom line
Low client loyalty
Low credibility
High stress

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Leadership: Shared Vision
Values
Purpose
Morale and motivation
Performance linked rewards
Systems Testing and Measuring

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• Completely inappropriate COA
• Measuring, KPI’s, Targets, Triggers
• Low levels of implementation of readily available
financial tech
• Poor financial understanding and appreciation
• Insufficient focus on cash flow management
• Too much reliance on accountants for non compliance
related issues

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• Poor use of positional goals, KPI’s and KRA’s
• Erratic or no regular performance reviews
• Challenges implementing a culture of
accountability

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Time
Knowledge
Growthrate

47. 0-3 4-10 11-18 19-25
Start-up Growth Maturity Transition
Large
Small
Years
Business
Size
• Prove business model
• Focus on cash flow
• Few staff – org structure
simple
• Minimal process &
procedure
• Focus on scaling, organic
expansion
• Empowering employees &
delegate decision making
• Build systems, processes &
disciplines
• Perfect core business
• Maximise ROI
• Restructure to improve
performance
• Inorganic growth initiatives
• Expand into new markets
• Re-invest & re-inventKey
Dynamics
Life cycle
Phases
Operational
EffectivenessProfit/Operational costs
Profit per head

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• Client acquisition
• Pricing
• Studio efficiency
• Client retention

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• What is the most expensive element?
• What is the most costly?

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• Very carefully designed an documented sales
process that everyone follows
• Division of labour; Different people focussed
on different aspects of the process
• Continual measuring and tweaking

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• Cost based pricing:
– Selling wages
– 90% of businesses use this
– Reliant on your ‘knowledge base’
– Good for 20-25% operating margin
– Must be very accurate + include risk contingency
– Review every project and update knowledge base

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• Value Based Pricing
– Selling ROI
– The ‘Holy Grail’ 10% of business can do this
– Reliant on your ability to create value: needs a high
level of business skill
– Higher risk than cost based
– Good for 30+ % operating margin as revenue share

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𝜂ℎ𝑜𝑢𝑟𝑠 =
𝑇𝑜𝑡𝑎𝑙 𝑏𝑖𝑙𝑙𝑒𝑑 ℎ𝑜𝑢𝑟𝑠
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑏𝑖𝑙𝑙𝑎𝑏𝑒 ℎ𝑜𝑢𝑟𝑠
<100%
𝜂 𝑑𝑜𝑙𝑙𝑎𝑟𝑠 =
𝑇𝑜𝑡𝑎𝑙 𝑏𝑖𝑙𝑙𝑒𝑑 𝑑𝑜𝑙𝑙𝑎𝑟𝑠
𝑇𝑜𝑡𝑎𝑙 𝑛𝑜𝑟𝑚𝑎𝑙 𝑏𝑖𝑙𝑙𝑎𝑏𝑙𝑒
>100%

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• Killers
– Scope creep
– Project slip
– Paid overtime
– Write-off’s
– Other sources of non-billable time

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• Drivers
– Good scheduling
– Risk aware quoting
– In-house resources, only fixed price contractors
– Crisp project completion
– Effective management of variations
– Incentivised write-on’s
– By the numbers

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You pay designers $80,000 per year. You bill
them out at $150 per hour.
How much GP can each earn you per month
assuming that they bill 85% of their time

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• 80k + Super = 87600 cost
• They work 45.5 weeks per year (0.875 of the
time)
• ∴ must bill 1925.27 per week to cover their
wages or 12 hours 50 mins (of a 38 hour week)
• For 4 weeks can bill 150*38*0.85*4= 19,380
∴ GP = $11,678

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Product
PricePerformance
Not doing the job well enoughToo expensive
Not serving clients needs

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Seriously

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A B

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• Work at your pay grade
• Communicate Vision
• Set standards & drive
accountability
• Show ‘grit’
• Demonstrate leadership
• Drive Execution
Createmomentum

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Start-up Survival Profitable Expansion Resource
Mature
Exit
Vision
Ability to execute
Getting to $50m: Strategy

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Delivery
Mastery
Business
Acumen
Technical
Mastery
Teamwork

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You
Team
Clients
Business

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Capabilities
Leadership
Culture
CommittedAligned
Engaged
• Vision
• Communication
• Emotional intelligence
• Energy
• Fairness
• Organisation
• Skills and capabilities
• Role Outcomes
• Performance
• Values
• Cohesion
• Work ethic
• Productivity
• Recognition
• Rewards

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Let’s say you are a house painter working on your own.
• House painting is charged out at $45 per hour
• House painters in a job, want to earn $30 per hour
• If you wanted to do no more painting, how many
painters do you need to employ to keep your
income?

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NPAT 500,000
Tax 27.50% 137,500
NPBT 637,500
Profit per chargeable head per month 5,000
Number of chargeable heads 13
Average profit per deal 8,000
Number of deals per month 8
NPAT 500,000
Tax 27.50% 189,661
NPBT 689,655
Profit per chargeable head per month 5,000
∴ Number of chargeable heads 12
Average profit per deal 10,000
∴ Number of deals per month 6

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To paraphrase Warren buffet:
“If you don’t know the numbers, you don’t know the
score, and if you don’t know the score you don’t
know if you are winning or loosing’’

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Multiplying the outcome of one's efforts without a
corresponding increase in the consumption of
resources

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Profit
Cost of Goods
Expenses
=
Existing Customers
Avg $ Sale No of Trans RevenueTotal Customers
WIP Debtors Days Cash Flow
Equipment & Facilities
People & Structure
Policies & Systems
Capacity
Aquired Customers
Traffic Opt-in Leads
ConversionLeads

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Traffic Opt-inX Leads Conversion= X = Customers X Avg $ Sale X No of Trans = Revenue MarginX Profit=
4,000 2.5% 100 25% 25 20,000 1 25%500,000 125,000
10% 10% 10% 10% 10% 10%59.7%
76%31 16 101 59 69 67
X = X = X X = X =
4,400 2.75% 121 27.5% 33 22,000 1.1 27.5%798,600 219,615X = X = X X = X =

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78. Start Feb 2016
• Revenue: 784,000
• NP: 33,000
• Average Deal Size: 12,600
• Team: 7
• Profit per head: 4,714
Feb 2018
• Revenue: 1,310,000
• NP: 383,000
• Average Deal Size: 42,700
• Team: 16
• Profit per head: 29,936
MD works 4 days a week
• Productivity
• Quoting
• Sales
• Lead generation
• Organisational design
• Recruitment
• Remuneration
• Systemisation
(67%)
(1060%)
(239%)
(129%)
(524%)

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You Must
Change your ways, repent and stop sinning
Improve your personal effectiveness
Develop you leadership skills
Develop you business acumen
Learn how to build an effective team
Become financially astute

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Alignment
• The initial debrief and brain dump
• Audit of policies, systems, processes & procedures
• Identifies main issues
• Critical input for determining the best way to move
your business forward

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Meetings
• Clarity on Vision and Goals, 5 year time frame
• Confirm the business core propositions
• Establish/develop key business strategy to deliver goals
• Reverse engineer your path to achievement of goals
• Ensures your focus on required outcomes is maintained
• Deal with real time challenges and keep your momentum

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Personal Work
• 3 – 5 hours per fortnight
• Use provided system templates, video’s and reading
material
• Continual online collaboration via coaching systems

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Team Transformation Workshop
• Gets existing team members ‘on board’ and bought
in to
– new operating principles
– necessary changes
– higher levels of accountability for outcomes
– higher levels of ownership in driving business outcomes

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• Gives you access to high value advice and
support
• Up to 2 people at coaching meetings
• Continues on an uninterrupted basis
• No lock-in contract. Month by month after the
first 12 months

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Highlights
• Implement comprehensive client acquisition system
• Organisation design and position contracts
• Implement balance scorecard system
• Implement SMS: Strategic Meeting System
• 12 Hours of Financial Mastery training
• Advanced KPI and financial reports
and much, much more

86. Evan Rubenstein
• Book a free 1 on1 consultation today
– Answer all you questions
– Assess your issues
– Identify areas that need work and what the solution
looks like
– See if there is a fit between your needs and how I help
people achieve their goals
– Qualify for $2,400 discount

87. Evan Rubenstein
Thank You
evanrubenstein.com