The Agency Growth Blog - For Owners Who Want Growth

What To Do Today, This Week, This Month and This Quarter

It’s not easy running an inbound marketing agency. It's even harder running a more profitable agency. You have to build your own inbound marketing machine to generate leads, you have to close those leads, you have to work with clients, you have to hire, train your team and of course handle all the admin stuff that goes along with running a business. On any given week, you have to wear five of six different hats.

What typically gets lost in the mix is—profit. At the end of the month you sit down and go over the numbers. If you made any money, it’s not because you were proactive, it’s usually just the way it worked out. You got lucky. If you made money this month, it doesn’t mean you’ll make money next month. And don’t forget to pay yourselves. If you’re making money, but not taking a pay check, you’re not profitable.

This story is typical of most small businesses. It’s typical of most agencies. It’s typical of the owners I work with, but it doesn’t have to be like this. With a little planning and strategy, you can make sure your agency does between 10% and 20% net profit every single month. You can collect enough cash to weather a sales dip, economic downturn, or even give yourself a bonus after a few months. It just takes some planning.

I get asked a lot about inbound agency profitability. What’s our net profit margin? What’s a good goal to set? How to improve net profit to get to that goal? All wonderfully smart questions for inbound agency owners to be asking.

More importantly, what are the three or four major initiatives you want to consider working on to improve net profit, no matter what the numbers?

Before we get started, it’s worth discussing how important inbound marketing agency profits are in the larger scheme of things. If you’re getting compensated at a reasonable and regular rate, meaning you’re taking CEO level compensation out of the company every single month and you can still afford everything you want to do within the agency including hiring, training, recognition, rewards, software, you get the idea, then company profitability is all about strategy.