Benchpress report 2020 – under £1m

BENCHMARKSFOR
AGENCIESUNDER£1M
2020
BENCHMARK
EDITION #9
POWERED BY
THELARGESTSURVEYOFUKINDEPENDENTAGENCIES

CONTENTS
SELLINGYOURAGENCY
39
BUYINGANAGENCY
44
THEBENCHPRESSSTORY
3
BUILDINGAPROFITABLEANDSUSTAINABLEAGENCY
18
MEASURINGSUCCESS
30
STATEOFTHEAGENCYNATION
7

The more people that take part in BenchPress, the more analysis we can do. A big thank you to
everyone that has taken part and helped spread the word about BenchPress. Please continue to
do so, so we can continue to share this amazing insight with you.
THEBENCHPRESSSTORY
THANKYOUFORSPREADINGTHEWORD
BenchPress is run by The Wow Company, an
accountancy practice that specialises in working
with agencies. We started benchmarking agencies
in 2012 with the aim of taking an accurate snapshot
of agency life in the UK, and to share insight and
analysis with ambitious agency owners. Since then,
BenchPress has grown to become the largest survey
of independent agency owners in the UK.
Increase your chances of success
We love working with agency owners and being part of the
exciting journey of growing an agency. It’s fun, but it can
also be tough, especially in times of uncertainty. Despite the
challenges caused by COVID-19, there are still many things
you can do to make sure your agency is profitable and
sustainable. We hope these insights get you thinking about
the performance of your agency and challenge you to take
action in key areas.
BENCHPRESS • E D I TI ON #9 • BENCH MAR KS FO R AGENC IES UNDER £1M • T HEWOWCO M PA NY.COM 3

This year, thanks to the large number of agencies that have
taken part, we’ve been able to split the survey results into
two reports:
This report shares benchmarks for those agencies below £1m
turnover. It includes commentary on the differences between
these agencies and the larger ones, so you don’t need to read
a separate report to get those insights. If you’d like to view the
benchmarks for agencies over £1m turnover, click here. .
This is an important step in the evolution of BenchPress. Our
long-term vision is that every agency will be able to benchmark
themselves against their peers based on their size, location, and
the type of agency that they are. We’ve made a big leap towards
that this year and, as more agencies take part each year, we’ll do
more analysis for you.
BENCHMARKS
FORAGENCIES
UNDER£1M BENCHMARKSFOR
£1M+AGENCIES
BENCHMARKSFOR
AGENCIESUNDER£1M
Email benchpress@thewowcompany.com and we’ll provide you with further insight.
WHATBENCHMARKWOULDYOULOVETOKNOWMOREABOUT?

HOURLYRATES
EARNINGS
FEEINCOMEPERHEAD
GROWTHRATE
PROFIT
REGIONALANALYSIS
WANTTOTAKEYOUR
BENCHMARKING
UPALEVEL?
You can now log back into
your BenchPress portal to
benchmark your agency
in more detail than ever
before. Benchmark yourself
on stats such as:
VISITBENCHPRESS.UK.COM
LOGIN NOW
Login to track your performance
year-on-year. See where you’re
winning and losing compared to
other agencies.

IT’SCHALLENGING
RUNNINGANAGENCY
RIGHTNOW
AGENCIESAREIN
BETTERSHAPETO
COPEWITHTHESE
CHALLENGES
EVERYONEWANTSTO
RUNAPROFITABLE
ANDSUSTAINABLE
AGENCY
Even before agencies were impacted
by COVID-19, many were finding it
tough. 79% of agencies grew turnover
in 2018. This dropped to just 63% in
2019 and will drop again in 2020.
Over half of agencies (58%) have three
months or more of overhead as cash in
the bank. This is up from 49% in 2019.
Your survival depends on it. We explore
what this looks like (and tips on how to
do it) from page 18.
THEHEADLINES
BENCHPRESS • E D I TI ON #9 • BEN CH MAR KS FO R AGENC IES UNDER £1M • T HEWOWCO M PA NY.COM 6

STATEOFTHE
AGENCYNATION

FEWER HIGH FLIERS
MORE AGENCIES ARE STRUGGLING TO GROW
2019WASA
TOUGHYEAR
FORAGENCIES
Agencies that grew turnover by more than 25%
Agencies that grew turnover
40%
30%
20%
10%
80%
70%
60%
50%
2016
2016 2017
2017 2018
2018 2019
2019
29%
75%
25%
63%
34%
77%
34%
79%
OVERALL,37%OFAGENCIESSAWTURNOVER
REDUCEORSTAYTHESAME.THISFIGUREWAS
JUST21%IN2018.

HOWMUCHDIDAGENCIES
UNDER£1MGROW
TURNOVERBYIN2019? It’s a lot harder to maintain high
growth rates once you hit £2m
turnover. The data shows that this
is where percentage growth rates
reduce significantly.
Turnover reduced
It stayed about the same
Less than 5%
5-10%
11-25%
26-50%
More than 50%
16%
22%
6%
10%
14%
16%
16%
FINDOUT
WHAT2020
HASINSTORE
FORAGENCIES
The stats on the page above are for agencies of all sizes. Here are the
specific stats for agencies under £1m turnover.

For several years now, we’ve been tracking how confident agency
owners feel about the year ahead by asking them to give a rating out of 100.
Above 50 and you’re feeling confident. Below 50 and you’re expecting
this year to be worse than last year.
The data for this report was collected in January 2020. When the results
were launched to a live online audience of over 700 agency owners on
19th March, we conducted the same poll to assess how confidence had
changed amongst agency owners. The drop in score was stark, although
confidence has risen since.
HOWWILLCOVID-19
IMPACTAGENCIES?
FEEINCOME
RESOURCING
CASHFLOW
THEFUTUREOUTLOOK
OFAGENCIES
It’s not just confidence that has been
impacted by COVID-19. In April 2020,
we conducted research that looked at
the impact of the virus on:
VIEWTHERESULTS
AGENCYCONFIDENCE
INDICATOR
70
60
50
40
30
Jan 2017 Jan 2020
Jan 2018 Mar 2020
Jan 2019 Apr 2020
67
71 70 69
35
50

WHENTHEGOINGGETS
TOUGH,THETOUGH
GETTOGETHER
Be part of the world’s best peer support community for agency owners
Challenging times shouldn’t be seen as scary. This is a wonderful opportunity to
work closely with other agencies to collaborate, share ideas, and come up with
solutions. This is why the The Agency Collective was set up. It provides you
with the support you need to grow your agency, a safe place to talk about your
challenges openly, and help when you need it the most.
Unlocking your growth
Over the last seven years, The Agency Collective has helped over 3,000
agencies on their growth journey. To help you get to the next level of your agency,
they collated the ‘best advice’ from those 3,000 agency owners. This guide
includes videos, quotes and practical tips you can implement right away.
DOWNLOADNOW
GRABTHEAGENCY
COLLECTIVE’S
‘BESTADVICE’GUIDE
BENCHPRESS • E D I TI ON #9 • BEN CH MAR KS FO R AGENC IES UNDER £1M • T HEWOWCO M PA NY.COM 11

AGENCYCOLLECTIVEMEMBERS
SHARETHEIRSTORIES
“We were two in the team when we
joined The Agency Collective, four
years ago. Now we are 21. We’ve
learnt an immense amount from
the epic community and the event
speakers, and also made some great
friends along the way!”
“At every step of my journey, I have
found someone at The Agency
Collective to support me through
to the next level. It’s amazing that
although some of us are competitors
how helpful everyone is.”
“I attended the very first Agency
Collective event. A small agency
trying to make it big. Now we have
offices in London, New York and
Shanghai with a team of over 70
people working for us. A dream
come true, thanks to The Agency
Collective community.”
“Since joining The Agency
Collective, I’ve met some incredible
people. A lot of them have helped
me on my journey to growing my
agency. What I appreciate most is
how open everyone is about how
they run their agency.”
MATTHEW DUHIG
& TOM SMITH
FX DIGITAL
CHRIS DONNELLY
VERB BRANDS
KELLY MACKENZIE
WHITEBEAR STUDIOS
PRISCA MOYESA
MOYESA & CO.

FINALLY,MORE
GENDERDIVERSITY
36%OFAGENCYDIRECTORSAREFEMALE
Since the start of BenchPress, female agency directors
have consistently been outnumbered three to one by
their male counterparts. Each year, around 75% of
agency directors were male.
That has now changed. For the first time since
BenchPress started in 2012, there has been a significant
shift in the number of female agency directors.
(up from 25% last year)

SPLITBETWEENMALEAND
FEMALETEAMMEMBERSAT
EACHLEVELOFANAGENCY
Women outnumber men at a junior level but
aren’t progressing through agencies at the same
rate as men.
36% 43% 45% 59%
64% 57% 55% 41%
DIRECTOR SENIOR MID LEVEL JUNIOR
FEMALE FEMALE FEMALE FEMALE
MALE MALE MALE MALE
TAKINGINTOACCOUNTALLSTAFF
WITHINAGENCIES,THESPLITBETWEEN
MENANDWOMENIS: “An increase of over 10% is superb. We all know the more diverse a workplace
you have, the more your agency is going to thrive. However, it’s disappointing
to see that progression isn’t happening, and we need to collectively look at
what we can do to improve that. Everything from highlighting women agency
owners, so women in the industry have role models, to allowing flexible and
remote working, to gender testing job specs. It all helps.”
KELLY MOLSON
RUBBER CHEESE
47% 53%
FEMALE MALE

WHOCOMPLETEDTHESURVEY
Digital
Communications
Creative
Content
Development
Advertising
UX
Full Service / Integrated
Film / Video / Animation
Branding
PR
Marketing
Media
Design
E-commerce
Online marketing / Search / PPC / SEO
Strategy
Other
16%
5%
9%
3%
7%
2%
1%
12%
4%
9%
3%
7%
2%
8%
2%
5%
1%
4%
T YPE OF AGENCY
956
AGENCIES
TOOK PART
THEDECLINEOFTHE
DIGITALAGENCY
Agencies describing themselves as digital have
been steadily declining, with agencies increasingly
choosing terms that more specifically describe what
they do.
AGENCIES DESCRIBING THEMSELVES
AS DIGITAL AGENCIES
26%
21%
16%
2020
2018
2019

For those that have a specialism, here’s the percentage of fee income
that comes from their main specialism (figures for agencies under £1m).
76%
OFAGENCIESUNDER£1M
SAIDTHEYSPECIALISEIN
APARTICULAROFFERING
1-20%
21-40%
41-60%
61-80%
81-100%
1%
8%
11%
29%
51%
THERISEOFTHE
SPECIALISTAGENCY
More agencies than ever before are reaping the rewards of
specialising their offering. The data shows that specialist agencies
grow faster and make more profit than generalist agencies.
Of those that specialise, a significant number
fully commit to it. 51% of agencies under £1m
generate almost all their revenues (81% or
more) from their main specialism.
As you tip over the £1m turnover mark,
you’re less likely to specialise in a particular
offering (76% of agencies under £1m do this
vs 65% £1m+ agencies).

For those that have a niche, here’s the percentage of fee income that
comes from their main sector niche (figures for agencies under £1m).
54%
OFAGENCIESUNDER£1M
SAIDTHEYSPECIALISEIN
ASECTORNICHE
1-20%
21-40%
41-60%
61-80%
81-100%
6%
14%
24%
23%
33%
THEPOWEROF
INDUSTRYFOCUS
Agencies are also benefiting from focusing on a niche, with over
half focusing on a particular industry.
A third of those that have a sector niche focus
almost all of their attention on it. 33% of agencies
under £1m generate almost all their revenues
(81% or more) from their main sector niche.
As you tip over the £1m turnover mark,
you’re more likely to specialise in a sector
niche (54% of agencies under £1m do this
vs 63% £1m+ agencies).

BUILDINGA
PROFITABLEAND
SUSTAINABLE
AGENCY

THEPILLARS
OFASUSTAINABLE
AGENCY
If you want your agency to still be here in five or
ten years, you’ll need to think about more than just
selling and delivering. Over the years, we’ve seen so
many bright, creative and talented agencies go under
because they didn’t get the basics right when it came
to the numbers within their business.
As well as thinking about how we manage profit and cash,
we should also be thinking about how we care for our planet.
Humans are living a life that is consuming and taking away
from the planet at a rate we can’t sustain. If we want our
children to enjoy the beauty that is all around us, we’ll need to
re-think the way our businesses impact the environment.
In 2019, Wow partnered with Offset Earth to create a Climate
Positive Workforce, planting 600 trees a month to offset the
carbon we produce. Click here to find out how you could do
the same for your agency.
THETRULYSUSTAINABLEAGENCY
In this section, we explore two of the
pillars of a sustainable agency - cash and
profit. We share data and insights on how
agencies are performing in each area.
CHECKOUTTHEFORESTTHAT
WOWISGROWING

CASH
Holding more cash allows you to plan for the long-
term, rather than operating month-to-month and
making decisions based on short-term horizons.
Therefore, it’s no surprise that…
MOREAGENCIESWITHLARGE
CASHRESERVES
25% 31%
13% 20%
FEWERAGENCIESARE
OPERATINGHAND-TO-MOUTH
25% of agencies have six months or more
of overhead as cash in the bank. This has
increased from 13% in 2019.
Only 20% of agencies have one month or
less of overhead as cash in the bank. This
is down from 31% in 2019.
Twelve months ago, we spotted many agencies were operating
hand-to-mouth when it came to their cash flow. We started a
campaign to help agencies increase the amount of cash they hold,
sharing ideas on how to do this in our 2019 BenchPress report.
The good news is that agencies are now in much better shape -
having more cash in the bank than ever before.
VIEWTHE2019REPORT
COMPARETHESESTATSTO
LASTYEAR’SFIGURES
3
2
1
98%OFAGENCIESWANTTOHAVEATLEAST3MONTHS
WORTHOFOVERHEADASCASHINTHEBANK

CASH
MONTHS OF OVERHEAD THAT AGENCIES UNDER £1M
CURRENTLY HAVE AS CASH IN THE BANK
MONTHS OF OVERHEAD THAT AGENCIES UNDER £1M
WOULD LIKE TO HAVE AS CASH IN THE BANK
LARGEAGENCIES
HOLDMORECASHTHAN
SMALLAGENCIES
The figures on the page above are for all agencies
of all sizes. When we looked at the data in detail,
we discovered that £1m+ agencies hold more cash
(expressed in terms of months of overhead) than their
smaller counterparts.
Specifically, they are much less likely to be in the
‘danger zone’ of having one month or less of overhead
as cash in the bank. 17% of £1m+ agencies fall into
this category, compared to 31% of smaller agencies.
Less than a month
Less than a month
1 month
1 month
2 months
2 months
3 months
3 months
5 months
5 months
4 months
4 months
6 months
6 months
More than 6 months
More than 6 months
15%
0%
16%
1%
19%
1%
17%
27%
2%
1%
7%
11%
8%
34%
16%
25%

GROSSPROFIT
Calculating gross profit in a meaningful way
If you want your gross profit figure to be meaningful, you’ll need to make sure
you include your chargeable wage costs as a direct cost, rather than as an
overhead. Including it as a direct cost in your chart of accounts, alongside ad
spend, print and freelancer costs, will allow you to match revenue streams with
associated costs. This means you can work out profit by department at the click
of a button. If you’d like help doing this, get in touch.
FEE
INCOME TURNOVER
DIRECT
COSTS
GROSS
PROFIT%
This will put you amongst the top-performing
agencies and well on your way to a profitable and
sustainable agency.
AIMFORAGROSSPROFIT
PERCENTAGEOF50%ORMORE
LOOKINGTOINCREASE
THEPROFITYOUMAKE?
INCREASEYOUR
PROFITNOW
We can help you do that with an Agency Profit Review.
We’ll look at all the ways you can increase your profit,
including reviewing how you measure up against the most
profitable agencies. You’ll leave with an action plan to
increase the profit you make right away.
“We’ve learnt so much working with the team at Wow.
They’ve helped us put together and implement initiatives
that have made us more profitable. This has allowed us to
invest more in our agency and our people.”
BECKY SIMMS
REFLECT DIGITAL
BOOKACALLWITHRORY

25% 16%
29% 20%
Agencies under £1m £1m+ agencies
Operating profit %
(as a percentage
of turnover)
Operating profit %
(as a percentage
of fee income)
OPERATINGPROFIT
Calculating your operating profit %
This is the amount of profit you have left before
tax and dividends, expressed as a percentage of
turnover. It’s often referred to as EBIT (earnings
before interest and tax) and is a key determinant of
the value of your agency.
You’ll see from the figures below that we’ve shown
operating profit as a percentage of fee income as
well as turnover. Fee income is your turnover less
any ad or print spend. It’s a truer reflection of your
performance than turnover if you have any client ad
or print spend in your business.
HERE’SWHATTHE
AVERAGESLOOKLIKE

10%-19% 10%-19%
Making a loss Making a loss
20%-29% 20%-29%
0% 0%
30%-39% 30%-39%
1%-9% 1%-9%
40%-49% 40%-49%
50%+ 50%+
22% 20%
0% 0%
24% 20%
6% 7%
17% 21%
9% 3%
6% 11%
16% 18%
OPERATINGPROFIT%FORAGENCIESUNDER
£1M(ASAPERCENTAGEOFTURNOVER)
OPERATINGPROFIT%FORAGENCIESUNDER
£1M(ASAPERCENTAGEOFFEEINCOME)

1% 7% 40% 38% 9% 3% 2%
£1
-
£1,999
£2,00
0
-
£
3,999
£4
,000
-
£5,999
£6
,0
00
-
£7
,999
£8
,0
00
-
£9,999
N
O
T
H
I
N
G
O
V
E
R
£10,000
Here’s how much owners of agencies under £1m draw from
their businesses each month
When planning, it’s worth considering what profit your agency needs to make to sustain the lifestyle you want, as well as saving for your future. It’s
a calculation that often gets people thinking about what they need to change in their agency to increase their profitability.
WHATAGENCYOWNERSEARN
Owners of agencies
under £1m draw an average
of £4,000 per month
Owners of £1m+ agencies draw an
average of £7,000 per month
DRAWINGSINCREASE
ASYOURAGENCY
GETSBIGGER

TIPSTOUNLOCKTHEPROFITINYOURAGENCY
Work out where you’re making money
Your profit will not be derived evenly across all
departments, clients, and projects. It’s really
important to understand where you make money
(and where you’re losing it), so you can make
decisions about what you say no to in the future.
Take a look at the page below to see what else you
could be measuring when it comes to profit.
Review your pricing
All your costs are going up (and you get better at
what you do each year), so your pricing should be
increasing too. Increase yours at least every year.
For a step-change in your pricing (and profitability),
you’ll need to sell value, not time. What is it that you
do that clients can’t get elsewhere, that they really
value? That’s the bit to focus on and charge more for.
Reading this book will help.
Get more from your existing clients
Have a plan for your key clients and set targets for
the revenue you want to generate from them. Then
go and see them, build relationships with different
parts of their business, understand their challenges,
and how you can solve them. Why not pitch to
them? You do it speculatively for potential new
clients, so why not for existing clients?
Create a profit culture
Increasing profit is going to be a lot harder to do if
your team is not engaged in this with you. Help them
understand why profit is important and encourage
them to come up with ways that they personally can
increase it. Help them really value their own time
and understand that doing work for free does no one
any favours.
1 2
3 4

DETAILEDPROFIT
MEASURES
We were curious to explore how detailed
agencies were in their measurement of
profit, so we looked at all the ways you
could analyse profit in your agency.
Here’s what we discovered.
78% of £1m+ agencies look at one or more detailed profit measures (vs
57% of smaller agencies).
HERE’SWHATAGENCIES
UNDER£1MMEASURE
Client
Project
Service Offering
Department
Individual
Niche
Pod
42%
63%
23%
9%
7%
2%
0%
43%
57%
22%
78%
Agencies under £1m £1m+ agencies
Only measure profit for the
whole agency
Look at one or more detailed
profit measures
Larger agencies
are more likely to look at
detailed measures than
smaller agencies.
Percentage of agencies that measure profitability by:

HOURLYRATES
A key determinant of profit is what you charge.
This is why agencies work so hard on justifying
higher rates to clients.
Most £1m+ agencies use tiered pricing, rather than
a blended rate, so the averages here don’t tell us
the whole story. What agencies charge for different
tiers is something we previously looked at in detail.
Log back into the BenchPress portal and click on
the Benchmark tab to see how you compare.
When you take a look at the stats we’ve shared
previously, you’ll notice that those that use tiered pricing
charge more. For example, the top 25% have an average
hourly rate of £130 for their directors.
IN TERMS OF AVERAGE HOURLY RATES,
HERE’S WHAT AGENCIES ARE CHARGING:
£130
TOP
25%
AVERAGE
PER HOUR
AGENCIESUNDER£1M £1M+AGENCIES
BOTTOM
25%
£99 £110
£80 £100
£70 £80

CREATINGPREDICTABLEREVENUESTREAMS
A key part of running a profitable and sustainable
agency is having predictable revenue streams. As
well as helping you sleep better at night, these will
help you schedule your resources more effectively,
hire with confidence and plan for the long-term future
of your agency.
For more predictable recurring revenue with clients, you’ll need to offer
them something compelling that holds its value over time. We’ve seen
a number of agencies find success packaging ongoing marketing help
with deep expertise in popular technology platforms.
If this is something you’d like to explore, check out how the
Mailchimp Partner Program for agencies, freelancers, and consultants
can add value to your clients and help you build a more profitable and
sustainable business.
Mailchimp has analysed the data from
hundreds of millions of emails sent through
its platform and calculated the average
unique open rates, click rates, bounce rates
and unsubscribe rates by industry. See
how your marketing for clients compares.
Stats varied by industry.
Discover the stats for the clients you work with here
The average open rate
for all industries is
The average click rate for
all industries
21.33% 2.62%
LOOKINGTOBENCHMARKYOUR
CLIENTS’PERFORMANCE?

MEASURING
SUCCESS

MEASURING
SUCCESS
WHATAGENCIES
MEASURE
WHATINFORMATION
YOUSHAREWITH
YOURTEAM
HOWOFTENYOU
MEASUREIT
KEYBENCHMARKS
FORSUCCESS
We’re constantly asked what agencies should measure in order
to increase their chances of success. A lot depends on where
your agency is at and what you’re trying to achieve, which is
why we create bespoke dashboards for agencies to monitor
their key performance indicators (KPIs).
In this section, we’ll take a look at:
NEEDHELPCREATING
YOURKPIDASHBOARD?
We can help you work out what KPIs are
most meaningful to your agency’s goals
and how to measure them. We’ll then
create a dashboard, so it’s easy for you to
monitor your progress.
Like to find out more?
GETINTOUCH

SETTINGTARGETS
ANDBUDGETS
BEGINWITHTHEENDINMIND
READYFORSOMELONGER-TERM
PLANNING?
If you’re like the 33% of agencies whose starting point for next
year’s billing targets is the year just gone, you’ll be deciding your
future based on your past.
Freeing yourself up from today’s thinking and looking further
ahead - three years, five years, ten years or even twenty years -
will help you imagine a future beyond your current capabilities.
This is harder to do when faced with major challenges. For those
seeking short-term solutions, here are two tools that will help:
Simple Cash Flow Forecast
One-Page Crisis Management Plan
Check out this webinar, recorded at the start of the year, which
provides inspiration for how you can plan for your growth beyond
the current challenges.
Which of these best describes what your billing targets are based upon?
Do you have budgets for costs
within your agency?
Yes
Kind of
No
Yes
No
Do you have a forecast with billing
targets each month?
Last year +/– achievable percentage
Consultation with the team
Working back from a long term vision
Analysis based on profit figure I’m hoping to achieve
A multiple of the wage bill
Gut feel
33%
20%
19%
16%
6%
6%
36%
39%
25%
77%
23%
66%
27%
7%
92%
8%
AGENCIESUNDER£1M
AGENCIESUNDER£1M
£1M+AGENCIES
£1M+AGENCIES

How often do you measure each of these?
CASH
RESOURCE
SALES
THISISWHATAGENCIESMEASUREMOSTOFTEN.
79%REVIEWTHESESTATSEITHERDAILYORWEEKLY
DAILYORWEEKLY MONTHLY ANNUALLY
QUATERLY NEVER
Billing
Cash balance
Resource schedule
Sales pipeline
Fee income
Cash flow forecast
Project profitability
Gross profit
Total profit
Performance of departments / pods
Staff satisfaction / engagement
Net Promoter Score (NPS)
93%
88%
87%
79%
60%
54%
37%
27%
17%
16%
12%
2%
7%
10%
7%
16%
29%
31%
37%
55%
57%
35%
14%
6%
0%
1%
1%
4%
5%
5%
17%
13%
12%
26%
30%
6%
0%
1%
1%
0%
3%
0%
2%
5%
14%
5%
21%
13%
0%
0%
4%
1%
3%
10%
7%
0%
0%
18%
23%
73%

Gross profit
Sales pipeline
Billing
Total profit
Resource schedule
Net Promoter Score (NPS)
Fee income
Project profitability
Cash flow forecast
Performance of departments / pods
Cash balance
Staff satisfaction / engagement
32%
75%
86%
30%
68%
13%
52%
45%
9%
34%
8%
32%
WHATINFORMATIONDOYOUSHAREWITH
YOURWHOLETEAM?
Sharing information with your
whole team will increase their
understanding of your financial
performance and help build a profit
culture. 14% of agencies don’t share
any information with their team.

STAFFUTILISATIONRATE
If you’ve ever worked out your billing capacity and then taken a look
at how much you actually bill, you’ve probably been scratching your
head as to why there’s such a gap between the two figures. The answer
is your utilisation rate - the amount of staff time that is being billed.
Understanding this (and where unbilled time is being spent) will help you
increase your profits.
BILLINGCAPACITY
If you use tiered pricing or have people in your team that are
part-billable, then you’ll need a spreadsheet to work this out.
MOSTAGENCIESSITBETWEEN
60-80%UTILISATIONRATE,
WITHSMALLERAGENCIES
HAVINGASLIGHTLYHIGHER
AVERAGE,ANDABIGGER
RANGEOFRESULTS.
TOP25%
AVERAGE
AGENCIES
UNDER£1M
£1M+AGENCIES
BOTTOM25%
80% 75%
69% 67%
59% 60%
TAKEYOUR
DAYRATE
DAYSIN
AMONTH
NUMBER
OFPEOPLEIN
YOURTEAM
BILLING
CAPACITY

* Other 15%
TrafficLive 2%
Paprika 3%
WorkflowMax 5%
Harvest 15%
Our own software 8%
Streamtime 17%
Salesforce 2%
Spreadsheets 11%
Synergist 22%
10000ft, Accelo, Active Collab, Avaza, Basecamp, CMAP, Concept, Everhour, Intervals, JIRA, Paymo, PROAD, Productive.io, Redbooth,
Studiometery, Scoro, TeamGrid, Teamwork, Wrike, Zoho
*
AGENCYMANAGEMENT
SYSTEMS
A good agency management system will help you manage the
time of your team more effectively, and therefore your profitability.
OFAGENCIES
DON’T
HAVEANAGENCY
MANAGEMENT
SYSTEMYET.
Here are the agency management systems people are using:
26%

MEASURINGYOURTIME
DOESYOUR
TEAMCOMPLETE
TIMESHEETS?
(FIGURESFORAGENCIESUNDER£1M)
Having an agency management system in place will also help you measure where your time is spent.
We have 100%
completion
YES
Most of the team
complete them, most of
the time
MOSTLY
Despite trying, this habit
never seems to stick
NO
Some do, some don’t
KIND OF
I don’t ask them to
NO
22%
5%
10%
37% 26%
...larger agencies are much more likely to successfully
complete timesheets than smaller agencies.
of £1m+ agencies either mostly or fully
complete timesheets on a regular basis
(compared to 63% of smaller agencies)
ITWON’TSURPRISEYOUTOKNOWTHAT...
85%

AGENCIESUNDER£1M
7%
42%
51%
2%
78%
20%
£1M+AGENCIES
YOURFINANCES
In challenging times, it’s more important than ever to have accurate financial
information at your fingertips. Your long-term sustainability depends on it.
Your finance system is just one piece of the jigsaw. It’s also really important that
you have the right internal systems and processes in place to give you accurate
management accounts every single month. Interpreting this information is the next
step, and the table on the right shows that there’s a group of agencies that feel they
don’t have the right strategic support to do this. Do you?
DOYOUFEELYOUHAVETHERIGHT
LEVELOFFINANCIALEXPERTISE
NEEDEDTOACHIEVEYOURPLANS?
Larger agencies feel more comfortable with the level of
financial expertise they have than smaller ones. If you find
yourself in need of some help in this area, we’d love to help.
Here are the financial systems that agencies are using:
Xero
Sage (desktop)
Quickbooks (online)
Sage (online)
Freeagent / IRIS Openbooks
Paprika
Other
64%
8%
7%
6%
6%
3%
6%
KIND OF
we have the basics covered, but
need more strategic advice
YES
we’ve got this sorted
NO
we need help in this area
GETINTOUCH

SELLING
YOURAGENCY FORSALE

SELLING
YOURAGENCY
Previously, you had to have £1m profit before you were
considered worthy of being an acquisition target. These days,
we’re seeing more and more smaller agencies selling and
merging with other similar-sized agencies. Here’s what agency
owners think about selling their agencies.
Do you plan to sell your agency in the future? (answers from agencies under £1m)
ASAGENCIES
GETBIGGER,THEY’RE
MORELIKELYTOTHINK
ABOUTSELLING
I never want to sell my agency
Within 1 year
No plans yet - see how it goes
Within 3 years
Within 10 years
5%
1%
55%
9%
30%
of agencies under £1m think they’ll sell
at some point in the next decade.
of £1m+ agencies plan to do this.
40%
73%

Which of these are most important to you if you selected a purchaser for your agency?
In an ideal world, how long would you want to stay on post-sale?
Future roles for your team in the agency
that buys you
I wouldn’t want to stay on post-sale
Reputation of the purchaser
1 year
Their ability to open doors to larger clients
2 years
A future role for you in the agency that
buys you
3 years
Retaining your indepenence as a
business post-sale
5 years
The money you’d receive
Location
More than 5 years
Cultural fit for the team
Not sure right now
61%
17%
31%
19%
24%
17%
10%
7%
9%
3%
64%
6%
1%
61%
36%
GOODNEWS!
The good news is that the
expectations of sellers and
purchasers are closely aligned
when it comes to the length of
stay for the agency owner beyond
the sale transaction.

WHATISYOUR
AGENCYWORTH
Understanding how much your agency is worth is an important starting
point to working out how you can increase its value. It’s worth completing
a formal valuation at least three years before you’re thinking of selling
your agency, to give you the time to work on the key metrics that will
make it more attractive for any purchasers.
Have you ever had your agency formally valued? (answers from agencies under £1m)
HOWDIDTHEVALUATIONOFYOURAGENCY
COMPARETOYOUREXPECTATIONS?
Never
Yes - In the last 3 years
Yes - More than 3 years ago
Yes - In the last year
81%
10%
3%
6%
7% 61%
18% 14% 0%
It was much
lower than I
thought it was
worth
It was a bit
lower
It was about
what I was
expecting
It was a bit
higher
It was much
higher than I
thought it was
worth
You’re much more likely to have had
your agency valued if you’re a larger
agency. Only 19% of agencies under
£1m turnover have had their agencies
valued. This jumps to 50% for the
£1m+ agencies.

WHATARETHEMAIN
REASONSYOU’DTHINKOF
SELLINGYOURAGENCY?
THINKINGABOUT
SELLINGYOURAGENCY?
Get in touch with Wow well before you’re
thinking of exiting. We can help by:
Valuing your business and
identifying ways for you to
increase the value over the
coming years
Connecting you to agency
owners looking to buy
agencies just like yours
Structuring the deal
in the most tax-efficient
way
Book a confidential chat with Peter Czapp, Wow’s co-founder, to discuss your options
I want to do something else
Be part of something bigger
I’m too old for this now
It’s become too stressful
Health reasons
Company is in financial difficulty
Receive an amount of money so I don’t need to
work again
57%
30%
14%
48%
25%
9%
4%

BUYING
ANAGENCY SOLD

BUYINGANAGENCY
of £1m+ agencies plan
on buying another
agency at some point
in the next three years
of agencies under £1m
plan on buying another
agency at some point
in the next three years
7% 20%
Do you plan to buy an agency? (answers from agencies under £1m)
No plans yet - see how it goes
I don’t envisage buying an agency
Within 3 years
Within 1 year
Within 10 years
41%
49%
5%
2%
3%
WHENLOOKINGATTHEDATAFOR
ALLSIZESOFAGENCIES,THERE
WILLBEASIMILARNUMBEROF
BUYERSANDSELLERSOVERTHE
NEXTTHREEYEARS
plan to sell their agency
plan to purchase
another agency
15%
14%

HERE’SWHATPURCHASERS
OFAGENCIESSAIDWAS
MOSTIMPORTANTTO
THEMWHENSELECTING
ACQUISITIONTARGETS
THINKINGABOUT
BUYINGANAGENCY?
We’ve helped several agencies grow
through acquisition. We can help by:
Connecting you to agency
owners looking to sell
Valuing the business
to ensure you pay the
right price
Structuring the deal in the
most tax-efficient way
Book a confidential chat with Peter Czapp, Wow’s co-founder, to discuss your options
Cultural fit
Sector niche
Growth potential
Staff skills
Technical specialism
Unique technology of IP
they’ve developed
Profit
Location
Management team
Fee income per employee
70%
26%
65%
24%
33%
16%
37%
18%
27%
9%

WELOVEWORKING
WITHAGENCIES
HERE’SWHATOTHERAGENCYOWNERSSAYABOUTUS
“Team Wow understand the day-to-day,
month-to-month and year-to-year challenges that
agency owners face. They are super responsive, give
good advice, have a level of market intelligence that’s
well informed, but above all, they are nice people.”
“We’ve been working with Wow for almost 4 years
now and the difference between them and our previous
accountants is like night and day. The team is both
proactive and responsive and everyone is a pleasure
to work with. They’re always there to offer advice and
support, and the fact that they specialise in the agency
sector means they’re able to offer unique insight and
understanding. I’ve found that incredibly valuable.”
Running an agency is fun, but it
can also be tough. Whatever your
journey throws at you, we’ll be
with you every step of the way.
We’ll make your life easier and
offer great advice to help you
achieve your dreams.
WANTTOGROW
YOURAGENCY
PROFITABLYAND
SUSTAINABLY?
BENCHPRESS@THEWOWCOMPANY.COM
@T H E W O W C O M PA N Y
@T H E W O W C O M PA N Y
In this fast-moving, digital world, many agencies focus on short-term results driven solely by
return on investment at the expense of their people, their customers, and even themselves.
We believe there is another way. We believe profit and sustainability should be at the heart of
growing an agency.
We’ve worked with hundreds of agencies over the years, typically those with between 5-75
staff. We love providing agency owners with insights and best practices so they can make
better decisions.
JACKIE ARNOTT-RAYMOND
MANAGING DIRECTOR, FRONTPAGE
ANDREW WOLFFE
FOUNDER AND MANAGING DIRECTOR, WOLFFE

Benchpress report 2020 – under £1m

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