If you’re running an agency, or even thinking about opening one, the first thing you need is a business plan. This entails setting up a strategy on how to develop, monetize, and market your services. It helps you get your first clients and enables you to develop an actual company rather than stay a simple freelancer. But, what then?
The future of your company lies in smart agency business development. While you might think of it as a buzzword for “growth,” the truth is that developing your business is a gradual yet critical process to keep your company afloat.
Let’s dig into how to set up an agency business development plan and what tools and project management software will help you most throughout the process.
Strictly speaking, agency business development is a relatively broad term. It involves researching and developing plans for finding new clients, creating new business strategies, and managing business accounts to ensure the business grows. You might initially want to dumb it down to “agency business development = more clients.”
That’s marketing. You can be good or not so good at it, and probably hire a company to handle it for you. Furthermore, marketing only allows you to use what you currently have or produce to generate new revenue. It’s only a part of the puzzle.
The actual process of agency business development can differ greatly depending on your goals and the company itself. Marketing agency business development will likely have different requirements from that of a creative agency, and so on. The key is understanding the underlying principles of how your business operates and how to steer your current challenges toward goals you can track and manage.
But why is all this important?
According to Promethean Research, the number of digital agencies in the U.S. grew by 54% from 2018 to 2023. This means that any given agency has roughly 50% more competing companies than it had only five years ago. Additionally, the figure only tracks agencies, not freelance consultants who might be providing similar services on a smaller scale.
Additionally, keep in mind that the survival rate of new agencies after a year is only 80%. That means you have a 20% chance of being forced to close the company after only a year. The five-year statistics are even grimmer, at a 50% failure rate.
Toss a coin and make a call. Did you win?
That’s the chance you have of surviving past the first five years as a company if you’re letting it chug along aimlessly.
Agency business development allows you to stack the odds in your favor. It reduces the element of uncertainty. The process involves developing a strategy for finding new markets or clients and creating consistent revenue streams. Then, it creates avenues for successfully implementing these measures in your agency.
Efficient agency business development depends on several interconnected areas:
You need to carefully consider each of these aspects of how your business operates and clue them into your business strategy in order to run a successful business.
Depending on whether you’re a small or a larger company, the task of managing and growing your business will fall on you or a dedicated manager. Regardless, there are a few key points to consider.
Management must develop a viable growth plan in order to succeed. This usually starts with the most pressing challenges your business is facing today. However, you also need to account for any difficulties you’re expecting along the way.
Most companies consider agency business development a relatively passive process, despite the inherent competitiveness in your field or industry. While this isn’t particularly far from the truth, it creates a fallacy that the management’s effort doesn’t matter.
In truth, management—particularly, lack thereof—is one of the key reasons small agencies fail. Without a clear focus on the big picture, the company can drift between one project and the next. You’ll never really delve into how each client helps a project grow or direct the company in a way that will utilize emerging technologies.
The first step to improving your manager’s involvement in the company is giving them the right tools for the job. Customer relationship management software and project management software will go a long way toward ensuring that management has a clear overview of the company’s current situation. It will allow you to plot a trajectory for success and growth, creating an organic environment for developing the business further.
One of the first things you had to do when starting a company (and gain investment if required) was to create a business plan. This likely included a clear overview of the extent and viability of the services and products you provided, alongside key income and expense figures to ensure that the company would turn a profit.
However, if you don’t have a developed business proposition, your company might be doomed to fail.
How is a business plan different from a business proposition, you ask?
A business plan is internal. It outlines the general services your company provides and how those services make money.
A business proposition is external. It provides your employees and clients with a detailed overview of how exactly you intend to provide your services and all the technology and expertise you use to do so.
Put simply, a business proposition is what sets you apart from other companies that provide similar services. And in the era of extreme competition we mentioned earlier, you need to keep your proposition at the core of your business.
The proposition will likely shape your business plan and clearly outline your intended market. It needs to resonate with the clients’ expectations but also have a unique twist on the general formula that is used across the industry.
This will help you get ahead of one of the most common problems in modern digital agency work: globalization. With the advent of remote work and the extreme proliferation of online ads and targeting, your potential clients are being wooed by agencies across the world. To ensure that you stay at the forefront of minds, you have to stick out with something new and fresh.
Additionally, the unique proposition will allow you to retain talent. According to a LinkedIn survey, employees believe that the nature of the work and opportunities for growth are the best reasons to stay in their current company. As such, your proposition must drive employee growth and provide them with key skills to develop on the job. If your proposition leans more on the side of “jack of all trades,” it signals that employees will receive a broad but shallow skillset that won’t allow them to specialize and progress in their careers.
For that reason, your value proposition needs to be as specific as possible. Dive into what makes your company unique from all others offering similar services, and make your brand stand out. It will directly affect your marketing efforts and create a unique team culture that will make it easier to establish rapport with employees.
One of the primary reasons you need an agency business development plan is to get more clients. However, “getting more clients” is only the end goal and you’ll need to break it down into constituent pieces that are actually within your control.
And that’s the content you produce.
Of course, creative and content-producing agencies will consider this more relevant than some other aspects of business development. But it’s a crucial part of company growth for any agency, digital or not.
There are two main benefits from creating content.
First, having more content strengthens your brand and creates a pipeline for passively gaining more leads and clients. This could be anything from social media posts, surveys, YouTube videos. In most cases, they won’t produce meaningful interaction with your audience. But if you create enough helpful content, the algorithms running the social media platforms and search engines will stack your authority. For example, Google crawls through your webpage for links and keywords while also determining how many other websites link to your content.
So, the more content you have, the more keywords you can hit. And if your content is worthwhile, other blogs will refer to it to boost both your and their authority scores.
For example, let’s say you’re an advertising agency focusing on smaller companies trying to get their foot in the door. Many local businesses needed to create an online presence during the pandemic due to the widespread adoption of online ordering. Those local businesses are now in a similar situation as you. They’re not competing just with other local companies—they’re competing with the Amazons in their industry, but also with digital-first businesses who have years of experience on the web.
For those small businesses, the internet is an unknown. A wildly inconsistent variable that they now have to rely on to survive. And you have to help them. As a result, you’ll need to start from the basics. If you jump at them with advanced concepts, they’re going to be lost and likely pull away from you, and you’d have lost a potential client. Even if the content you create might seem trivial to you, it could be a goldmine for them that says everything they need to know to get started—and that you’re the right agency to help them on that journey.
You can build this into your strategy on how to get new leads. If you haven’t already, use customer management software to create an onboarding pipeline to ensure you nurture the leads you get through your content before they go elsewhere. Use social media, targeted mailing lists, and outreach programs to ensure you hit the right audience for your services. Then, you can use your unique value proposition to ensure your pitch lands you a new long-term client.
Sometimes, growth isn’t just about getting new clients onboard. Your current clients can be a bulk of your revenue, and the income you receive from them has likely not topped off yet.
If you have an advertising agency, for example, take a look at the client’s webpage SEO performance. If their organic traffic is falling behind, then your efforts in trying to promote the company via social media might be falling on deaf ears. While some of the previous advice included the need to specialize to make yourself distinct from competition, you can create a unique value proposition by ensuring that clients get a more holistic service.
This strengthens your relationship with the client, at least on the surface. Dig a bit deeper, and you can make the client more reliant on your services, and more willing to get upsold with additional packages that you design that will “take them to the next level.” While it might seem underhanded, upselling is a perfectly viable business tactic and one that you should try to use whenever possible. It will work wonders for improving their customer lifetime value (CLV), which is one of the critical KPIs that your management should track to ensure the company is growing.
It goes without saying that you need the right tools for the job. If you want to nurture existing client relationships, you need to know every important figure and detail about them. You also need to have a detail-oriented CRM tool to compile this information and allow you to create manageable goals for client interactions. It will allow your sales and product departments to cooperate to ensure the client receives personalized, targeted service that will improve your return on investment and give them the best results. It’s a win-win for everyone.
The importance of employee retention and upskilling has been touched on before, but it’s one of the critical areas that many agencies fail to account for in their business development plans. Due to majority of agencies adopting the digital business model, it’s become easier than ever to find new talent. After all, once you no longer need to hire from a specific area, it doesn’t really matter if your new employee lives in Kentucky or Kenya.
Of course, there are pros and cons of both remote work and working with foreign freelancers, but that’s a significant topic in and of itself. What you should be concerned about is what to do with the employees once you hire them.
Start with training your employees and giving them ample opportunities to develop new skills and gain highly specific, relevant experience in the industry. Determine an appropriate workload for the employees and ensure they get ample time between producing for your company and improving their skills. If you tip the balance more in favor of creation, you risk overworking your employees. It can lead to what’s commonly called the “churn-and-burn” business model, which can have negative consequences for your company.
First off, while talent acquisition has become more streamlined than ever, its cost has rapidly risen over the past few years. According to the Promethean Research statistics we quoted earlier, changes in salary expectation have caused business expenses to shift from between 20%-25% to 25%-30% of gross income. As a result, employees are going to cost you more.
But this doesn’t only rely on salary costs. Employee utilization is a key concept you’ll need to master if you want to ensure that your agency is making the most profit. Simply put, it’s how much you’re billing the client for your employee’s time or, in a different outlook, how much effective time you’re getting from your employees. Unfortunately, the concepts of employee utilization and employee retention tend to clash. The more you try to ramp up your employee utilization, the more likely you’re going to overwork them.
You need to strike a careful balance between these two concepts, which is where time-tracking and scheduling software can help. It helps your team members track how much time they worked on a project and how to convert that into billable hours for the client (if you use that payment strategy). Additionally, it allows you to input those figures into your project management software to ensure you stay on track.
Of course, there are dozens of different ways to approach your agency business development plans, usually depending on the kind of agency you run or manage. Here are a few tips to help you develop the winning strategy.
This might sound obvious when you think about it, but many agencies create a disconnect between their company product and their audience by trying to solve a problem that doesn’t exist. You need to consider your primary audience’s main pain points. It goes beyond what your agency does for your clients and focuses on how it helps them overcome their challenges or simply scratches an itch they have.
While agency business development is mainly organic, you need to have a way to figure out whether you’re growing at a sufficient rate. That’s where defining KPIs comes in. There are many different types of agency KPIs that you could use, and the relevant ones will vary depending on the type of business you run. However, they are vital in ensuring your company stays on track. Plus, you can create an excellent tracking and reporting system with project management and bookkeeping software.
As a part of your business plan, you most likely created a pricing strategy to use for your clients. Regardless of which pricing strategy you use, your business needs steady, recurring income to ensure it’s hitting its targets. Even if you use hourly plans or fixed project fees, you need to figure out a way to build the client relationship into a recurring business model that you can better plan for.
You can also increase your prices if you become more valuable to your clients. But this only works if you can consistently meet your deliverable deadlines and expectations, so don’t go overboard with promises.
One of the most important aspects of growing your business will likely be centralization. If you spread your team’s efforts across different platforms and communication channels, you’re making way for mistakes and misalignments that can hurt your project progress and create discord within the team.
That’s why you should invest in versatile software solutions like Bonsai. By combining project management and customer relationship management tools, Bonsai allows you to overview your clients’ demands and how your project pipelines can be adjusted to meet them.
Furthermore, Bonsai features customizable client platforms that streamline communication between your sales and project team and provide clients with accurate insights on key project milestones.
Finally, Bonsai features a full-fledged bookkeeping and e-banking solution to integrate your business accounts. You can use a Bonsai account to automatically manage reinvesting into your businesses and tracking profit margins. It will also help you send and track invoices to ensure your agency gets paid on time.
Set up a free 7-day trial today and discover how Bonsai can help your agency.
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