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How Marketing Agency Owners Chase Thousands and Ignore Millions

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BizyDad

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I've been wanting to write this post for a while. I thought I might call it the biggest mistake marketing agency owners make.

Before we get to the good stuff, I have a bone to pick with marketing agencies.

If you run the kind of marketing agency where you take a client's money, but you produce no results, you do not have a marketing agency, you have a fraudulent business. And this thread will not help you. I would call this the biggest mistake marketing agencies make, but being a shyster isn't a mistake, it's a total shame.

Okay now that we got that on out of the way.

The biggest mistake I see marketing agency owners make is thinking that they are running a marketing agency.

Do you know the story of McDonald's? It's a common story told in business circles, but in case you don't know, McDonald's is not a burger chain. McDonald's is a billion dollar real estate empire. They own some of the prime real estate on some of the best corners in every city and town, first in America, then the world.

And making that little switch in their mentality catapulted them from a Henry Ford style burger flipping operation to one of the biggest, most profitable companies in the world.

I would like to submit a similar change in your mindset on your marketing agency.

Because if you can truly produce results, marketing results, in other words you can connect people who need a product or service with a company that can provide that product or service, why in the world are you running a marketing agency?

Do you know how much business revenue a business is "supposed to" devote to their marketing? 10%.

Let's not argue about the number. Maybe some spend more maybe some spend less. But let's just agree on that hypothetical number.

That means that as a marketing agency, the BEST you can hope for is 10% of a client's revenue. And some of that's going to go to ad budget. And paying people to fulfill on the work.

And you keep what's left.

Okay. But you get a bunch of clients and you make a good living, right?

What's wrong with that Bizydad?

Well... what if your marketing agency serves a business you already own?

Now your agency is getting 10%, but you're also keeping the other 100% of the second business's profit.

Hopefully with this rest of this article I'm going to show you how you can accomplish this while sticking with what you know and not adding too much more on your plate.

But Bizydad, what other business am I supposed to run?

Well, what skills do you have to bring to the table? You're running your own company, so you've got some financial ability. Hopefully. And you've got some sweet marketing skills. The ability to bring prospects.

So what niches do you serve? Start there.

But Bizydad, How am I supposed to start one of those businesses from scratch?

Well let's back up. Nobody said you had to start anything from scratch. But you probably could…

Now think about this. If you do a good job for a client, are they going to keep you around?

Of course.

And if you've got a client for years, are you building up rapport with them?

Well not if you're running the kind of agency that only sends out monthly cookie cutter PDF reports!!! Or if you run the kind of agency where you put the least knowledgeable person in front of the client as an "account rep".

Sorry, I got on my soapbox again.

If you, you personally, actually treat a client like a real person, get to know them, build rapport, in time you can start asking questions that don't relate to marketing.

And one of my favorite questions to ask, I'll even ask this one in the sales meeting before I take them on, is…

What is your exit strategy for this business?

I know before I sign a client up when they are planning to exit their business. Or if they are planning to. Or if they haven't even given it a thought.

And their response tells me a lot about who they are as a business owner, and how they run their business.

I've seen people come on the forum for time to time and ask how to acquire a boomer's business. Now is the time. Boomers are half retired.

I am proposing you start a marketing agency and help a boomers grow their business until they're ready to retire.

And when they're ready to retire, if you've got that rapport, you'll know they're prepping for sale before their business broker or accountant will.

But Bizydad, I'm busy running my own marketing agency, How do I have the time to run something else?

Well if you spent 5 years walking into an office (You do walk into your clients offices don't you?) you've probably gotten to know more than just the owner. Who are the other players? Who are the sales people? Who is the general manager?

Those employees come with the business.

But Bizydad, where will I get the money to buy this business?

Well, you've been running your marketing agency a while right? You should have some of your own money. Or did you lose it chasing the last crypto bubble?

Besides, where do you get the money to buy any business? Ask friends and family. Find an investor. Take out a loan. If you've got a 5-year relationship with your client, hopefully they'll be willing to take a chunk of change and do a seller carry back. Or maybe you can partner with the general manager to buy the business together.

There's numerous ways to solve the problem.

I've mentioned it in other threads but I have executed on this exact strategy.

I have run my agency for 13 years. To be fair, the first 8 years I was more concerned with keeping a wife happy and having work life balance. But all the while I was planting seeds with my boomer clients. To date three of them approached me to purchase their business, and at the beginning of last year I closed on one.

In 2021, the business did $1.2M in sales. Thanks to the owners decision to try to save on taxes, the business was showing very little profit. I partnered with his son to buy the business, so we got an extra good deal. (Of course I already had solid rapport with him too. He was the company's top salesperson. I couldn't run the company without him. He even referred his best friend to work in my agency. And of course I hired the best friend, which turned out to be an incredible decision.)

By implementing cost cutting measures, and improving the marketing efforts (that I had recommended to the client but he never implemented), we made our purchase price back in the first hundred days. We had invested more than just the purchase price, but as of today's date, we have doubled our money. Just 14 months later. We did $1.6M last year and are pacing for $2.1M this year.

Fam, I basically doubled my income in a year and my day-to-day work life barely changed. I don't even want to get into the impact of this on my net worth. (It's good).

But the beauty of this strategy is that I now have a business partner who is almost addicted to building systems and running businesses. 5 years ago he was making… I'll just say less than a living wage as a newspaper writer.

And because my partner handles the day to day, all I have to do, is…

Run a team of marketers to grow the businesses.
Cash checks.
Purchase next business.
Occasionally offer strategy advice to my partner.

---

People worry so much about what business they should start.

Imagine having a business model where you can acquire an existing, established money making business and you could see the back end, the guts of the business for years already so you know what you're buying.

People think that buying businesses is risky.

Does this sound risky to you?

-----

Some more thoughts…

If your goal is ultimately to acquire your client's business, how does that change your prospecting for clients? Do you want to stay in one niche, or do you want to broaden out?

Personally, I do cheap SEO for a business coach, business broker, a lawyer, and an accountant. Because I don't know everything, I now have people I can ask questions of and not have to pay their hourly rate. Side note, they all send me really qualified clients. And the business broker even sends me other agencies to acquire. Ha!

Taking it another way, I'm considering a future venture in real estate. I now have a painter, a remodeler, a plumber, a roofer, an AC guy, and an electrician as agency clients.

How does this strategy change your pricing? Do you try and get as much out of them as you can? Or do you start with a lower bid so you can get an easy yes and start building rapport?

If something goes wrong and your agency screws up, do tell the client to pound sand? Or do you work harder to make it right? Do you maybe cut your fee for a month?

See a big part of this tactic, for this to truly work, you have to present yourself as the kind of person that someone would want to sell their business to.

Which means you're a problem solver. And you display fairness. You understand their needs and goals, and you work to get them there.

These boomers appreciate their employees. They don't want someone who's just going to run their ship into the ground.

So show up on time for meetings. Do what you say you're going to do. Be professional. Be reliable and dependable. Celebrate successes with your clients.

Okay, hopefully you get the idea. You don't have to set off running a marketing agency. You can choose to build a business accelerator instead. Or a business incubator.

The day-to-day practices seem the same, or at least very very similar, but if you have a different end goal, you will make different choices about how you approach the business.

I'm sure I haven't written everything that I can think of about this topic, but I'm losing steam, so feel free to ask questions and I'll answer the best I'm able.

And I just want to give a shout out to a new forum member @Jo_t95 who seems to understand this also. Based on his forum thread, sounds like he's doing a similar tactic but going the revenue share/partnership/eventual franchise route. Pretty clever. Just goes to show there's several ways to execute on this strategy.
 
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Jo_t95

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Solid post, and thanks for the mention!

Love that you included a solid strategy for growing a portfolio on working businesses as well given an initial edge in marketing. Of course the caveat is that the marketing must yield good results for the 'boomer owners'.

Curious what sorts of marketing services your agency does?
 

BizyDad

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Solid post, and thanks for the mention!

Love that you included a solid strategy for growing a portfolio on working businesses as well given an initial edge in marketing. Of course the caveat is that the marketing must yield good results for the 'boomer owners'.

Curious what sorts of marketing services your agency does?

Thanks. I feel like I'm just doing what I know. I spent 10 years in finance, and watched other people acquire businesses by leading with capital and "operational expertise".

I'm just taking the same model, but leading with marketing.

We're a search engine marketing firm. That's the core offering. Ancillary offerings are Google display ads and some light PR/content marketing type activities. Those are generally used to reinforce the SEM campaign.

My style of marketing does limit the types of businesses that I'm willing to acquire. For example, on Amazon based operation wouldn't fit seamlessly with what we do. Or a business that can't get any kind of PR traction would also not be a good fit for my model.

Still that leaves plenty of cool businesses out there that I can help, and eventually own one or three more.
 

constant

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Great post, thanks for the mindset shift.

Although I'm not at that point yet, I'll be keeping this post in mind for the future.
 
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Subsonic

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I've been wanting to write this post for a while. I thought I might call it the biggest mistake marketing agency owners make.

Before we get to the good stuff, I have a bone to pick with marketing agencies.

If you run the kind of marketing agency where you take a client's money, but you produce no results, you do not have a marketing agency, you have a fraudulent business. And this thread will not help you. I would call this the biggest mistake marketing agencies make, but being a shyster isn't a mistake, it's a total shame.

Okay now that we got that on out of the way.

The biggest mistake I see marketing agency owners make is thinking that they are running a marketing agency.

Do you know the story of McDonald's? It's a common story told in business circles, but in case you don't know, McDonald's is not a burger chain. McDonald's is a billion dollar real estate empire. They own some of the prime real estate on some of the best corners in every city and town, first in America, then the world.

And making that little switch in their mentality catapulted them from a Henry Ford style burger flipping operation to one of the biggest, most profitable companies in the world.

I would like to submit a similar change in your mindset on your marketing agency.

Because if you can truly produce results, marketing results, in other words you can connect people who need a product or service with a company that can provide that product or service, why in the world are you running a marketing agency?

Do you know how much business revenue a business is "supposed to" devote to their marketing? 10%.

Let's not argue about the number. Maybe some spend more maybe some spend less. But let's just agree on that hypothetical number.

That means that as a marketing agency, the BEST you can hope for is 10% of a client's revenue. And some of that's going to go to ad budget. And paying people to fulfill on the work.

And you keep what's left.

Okay. But you get a bunch of clients and you make a good living, right?

What's wrong with that Bizydad?

Well... what if your marketing agency serves a business you already own?

Now your agency is getting 10%, but you're also keeping the other 100% of the second business's profit.

Hopefully with this rest of this article I'm going to show you how you can accomplish this while sticking with what you know and not adding too much more on your plate.

But Bizydad, what other business am I supposed to run?

Well, what skills do you have to bring to the table? You're running your own company, so you've got some financial ability. Hopefully. And you've got some sweet marketing skills. The ability to bring prospects.

So what niches do you serve? Start there.

But Bizydad, How am I supposed to start one of those businesses from scratch?

Well let's back up. Nobody said you had to start anything from scratch. But you probably could…

Now think about this. If you do a good job for a client, are they going to keep you around?

Of course.

And if you've got a client for years, are you building up rapport with them?

Well not if you're running the kind of agency that only sends out monthly cookie cutter PDF reports!!! Or if you run the kind of agency where you put the least knowledgeable person in front of the client as an "account rep".

Sorry, I got on my soapbox again.

If you, you personally, actually treat a client like a real person, get to know them, build rapport, in time you can start asking questions that don't relate to marketing.

And one of my favorite questions to ask, I'll even ask this one in the sales meeting before I take them on, is…

What is your exit strategy for this business?

I know before I sign a client up when they are planning to exit their business. Or if they are planning to. Or if they haven't even given it a thought.

And their response tells me a lot about who they are as a business owner, and how they run their business.

I've seen people come on the forum for time to time and ask how to acquire a boomer's business. Now is the time. Boomers are half retired.

I am proposing you start a marketing agency and help a boomers grow their business until they're ready to retire.

And when they're ready to retire, if you've got that rapport, you'll know they're prepping for sale before their business broker or accountant will.

But Bizydad, I'm busy running my own marketing agency, How do I have the time to run something else?

Well if you spent 5 years walking into an office (You do walk into your clients offices don't you?) you've probably gotten to know more than just the owner. Who are the other players? Who are the sales people? Who is the general manager?

Those employees come with the business.

But Bizydad, where will I get the money to buy this business?

Well, you've been running your marketing agency a while right? You should have some of your own money. Or did you lose it chasing the last crypto bubble?

Besides, where do you get the money to buy any business? Ask friends and family. Find an investor. Take out a loan. If you've got a 5-year relationship with your client, hopefully they'll be willing to take a chunk of change and do a seller carry back. Or maybe you can partner with the general manager to buy the business together.

There's numerous ways to solve the problem.

I've mentioned it in other threads but I have executed on this exact strategy.

I have run my agency for 13 years. To be fair, the first 8 years I was more concerned with keeping a wife happy and having work life balance. But all the while I was planting seeds with my boomer clients. To date three of them approached me to purchase their business, and at the beginning of last year I closed on one.

In 2021, the business did $1.2M in sales. Thanks to the owners decision to try to save on taxes, the business was showing very little profit. I partnered with his son to buy the business, so we got an extra good deal. (Of course I already had solid rapport with him too. He was the company's top salesperson. I couldn't run the company without him. He even referred his best friend to work in my agency. And of course I hired the best friend, which turned out to be an incredible decision.)

By implementing cost cutting measures, and improving the marketing efforts (that I had recommended to the client but he never implemented), we made our purchase price back in the first hundred days. We had invested more than just the purchase price, but as of today's date, we have doubled our money. Just 14 months later. We did $1.6M last year and are pacing for $2.1M this year.

Fam, I basically doubled my income in a year and my day-to-day work life barely changed. I don't even want to get into the impact of this on my net worth. (It's good).

But the beauty of this strategy is that I now have a business partner who is almost addicted to building systems and running businesses. 5 years ago he was making… I'll just say less than a living wage as a newspaper writer.

And because my partner handles the day to day, all I have to do, is…

Run a team of marketers to grow the businesses.
Cash checks.
Purchase next business.
Occasionally offer strategy advice to my partner.

---

People worry so much about what business they should start.

Imagine having a business model where you can acquire an existing, established money making business and you could see the back end, the guts of the business for years already so you know what you're buying.

People think that buying businesses is risky.

Does this sound risky to you?

-----

Some more thoughts…

If your goal is ultimately to acquire your client's business, how does that change your prospecting for clients? Do you want to stay in one niche, or do you want to broaden out?

Personally, I do cheap SEO for a business coach, business broker, a lawyer, and an accountant. Because I don't know everything, I now have people I can ask questions of and not have to pay their hourly rate. Side note, they all send me really qualified clients. And the business broker even sends me other agencies to acquire. Ha!

Taking it another way, I'm considering a future venture in real estate. I now have a painter, a remodeler, a plumber, a roofer, an AC guy, and an electrician as agency clients.

How does this strategy change your pricing? Do you try and get as much out of them as you can? Or do you start with a lower bid so you can get an easy yes and start building rapport?

If something goes wrong and your agency screws up, do tell the client to pound sand? Or do you work harder to make it right? Do you maybe cut your fee for a month?

See a big part of this tactic, for this to truly work, you have to present yourself as the kind of person that someone would want to sell their business to.

Which means you're a problem solver. And you display fairness. You understand their needs and goals, and you work to get them there.

These boomers appreciate their employees. They don't want someone who's just going to run their ship into the ground.

So show up on time for meetings. Do what you say you're going to do. Be professional. Be reliable and dependable. Celebrate successes with your clients.

Okay, hopefully you get the idea. You don't have to set off running a marketing agency. You can choose to build a business accelerator instead. Or a business incubator.

The day-to-day practices seem the same, or at least very very similar, but if you have a different end goal, you will make different choices about how you approach the business.

I'm sure I haven't written everything that I can think of about this topic, but I'm losing steam, so feel free to ask questions and I'll answer the best I'm able.

And I just want to give a shout out to a new forum member @Jo_t95 who seems to understand this also. Based on his forum thread, sounds like he's doing a similar tactic but going the revenue share/partnership/eventual franchise route. Pretty clever. Just goes to show there's several ways to execute on this strategy.
Awesome post. Thanks for sharing
 

BizyDad

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Stay in the visionary/opportunity discoverer/connector role
Yeah bro, there is so much you can do if you maintain that headspace. Broker deals and get a cut. Trade business back and forth.

As you implement, come back and tell us how it goes. I'd love to hear other's success stories with this kind of thing.
 
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Matt Sun

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Awesome post. Would you give and example of a PR event that synergistic with SEM strategy ?
I'm also doing some Google Ads for blacksmith and dentist but this are non acquirable. A better example would be something like pool cleaning / landscaping ?
 

BizyDad

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Would you give and example of a PR event that synergistic with SEM strategy ?

"PR event" could mean a couple of things. Doing PR for an event can be an SEO goldmine in itself. I have a couple of clients for whom that is the crux of our strategy. But what you probably meant was...

The obvious one is finding news outlets that link.

I'll give you one more. Highly relevant, highly authoritative sites that don't link. When we get our clients mentioned in the Phoenix Business Journal, I typically see on average a 1/2 page lift in rankings across the board. It's more for some, less for others, but the point is we move the needle without a link.

A better example would be something like pool cleaning / landscaping ?

Sure. It could be anything though. Like @Kak says, think bigger.

The two that I had to pass on were a lingerie store (physical and ecom) and an ecom store that sold specialized cookware.

I have talked to my janitorial client, chandelier maker, and am currently talking to an AV company about taking over when they are ready to retire. I might start a new business in partnership with a former client too.

Each deal would have its own challenges. Each one takes creativity. But there's no reason why it has to be just a service based business.

The point is, if you can deliver results for businesses, then take your profit from your agency and invest it... into more businesses you own.
 

Black_Dragon43

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If you run the kind of marketing agency where you take a client's money, but you produce no results, you do not have a marketing agency, you have a fraudulent business. And this thread will not help you. I would call this the biggest mistake marketing agencies make, but being a shyster isn't a mistake, it's a total shame.
My boy is still living in 2015 :happy: — these kind of agencies are becoming an anomaly these days. I’m not talking about the 1-man band agencies, who may claim to do XYZ, but don’t get any results. I’m talking about larger agencies that survive (and thrive) without delivering results. They are a rarity these days. Today’s customer who hires an agency is sophisticated and will often only do business with an agency after they have established a prior relationship with the people involved.

why in the world are you running a marketing agency?
Do you know how much business revenue a business is "supposed to" devote to their marketing? 10%.
Well, I’m a special case, because not only do I run a marketing agency, I run a marketing agency that helps other agencies get clients.
:eyes:


But to answer your question… I wouldn’t want to buy any of the agencies I work with. I’d never buy them, I don’t want the hassle. What I do works. It doesn’t need tinkering, it simply gets results. I need more customers for baldy baldy, not starting or buying other businesses. Because guess what, someone still needs to serve those customers, I’d rather serve them with what I’m best at and what I know already works without problems, rather than serve them with things that may or may not work and will create headaches for me down the road.

Doing otherwise would be a hassle, and I’m no fan of hassles. I like to keep things simple.

I like 10% of a business’s revenue with 0.5% of the hassles. I just need to get 10 of those businesses, with 5% of their overall hassle, and imo that’s a much better deal than buying 1 of them and getting 100% of the revenue and 100% of the hassle that comes with it.

My goal for this year is 100 active customers — that means $75-100K/mo. Once I get a customer, I want them for life. I’d rather spend all my energy perfecting my service than spreading that energy towards perfecting hundreads of other different businesses. Focus wins.

So why are you not talking about how do agency owners add a client on retainer and keep them for life? Because that’s what matters. And then how do you continue to add them, and boom boom boom, soon enough you’re making more revenue than any single customer of yours!

I’d rather add a real estate client in say Ohio, and then go through the remaining states of the US of A adding real estate gringos as clients everywhere, rather than buy that real estate client. Wtf?! I don’t know how to do real estate, screw that, I have my own service that I’ve perfected to grow real estate businesses, and that comes easy to me, as anything does once mastered, I want to sell more of that!

The biggest problem for agency owners imo is that they cannot keep the clients they acquire. Well, in practice that’s the second biggest problem. The actu biggest problem they have is that they have NO CLUE how to bring in business except through word of mouth and referrals. That’s most agencies, and yes, even big ones.

I spoke to a guy who owns a $20M/yr agency. He said he never did any marketing for himself, it was all Upwork/Freelancer and referrals. Can you imagine?! What. The. F*ck?!

If I don’t have 30 calls with 30 new people every week, I’m depressed. Like what are these agency owners doing? And then they’re like “uhh now I feel we need something else to grow, these referrals you can’t count on them”… really?!

I’m convinced a large majority of business owners have grown their companies by pure luck (+ a great service that keeps customers around for a long time), rather rather than real know-how about how to build and grow a sales pipeline for new business.

Most businesses are unable to predict where their next customer will come from. They have no process to it. Joe the Plumber meets Lucy the accountant, his childhood friend, and Lucy says she knows a lawyer who needs her pipes fixed. Wtf?! Like how are these businesses still alive?

Or 70yo Joe Schmo meets his communist buddy from when they were both party members, and he runs a big bank, so he gets a $100K contract. Boom he hires some college students and gets the job done. LOL!!! These people cannot get a SINGLE CUSTOMER if they do not rely on their network at all. Not a single one. And yet judging by their net worth, you’d think they must be geniuses.

And lo and behold, the world is full of them. Real customer acquisition skills are extremely rare. Most people cannot predictably generate new customers at will. Great agencies can design a process that generates such customers for a specific industry or niche. They figured out the right combination that pops the lock open. That’s their real value — they don’t need to buy businesses, they need to sell more of it!!
 
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BizyDad

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My boy is still living in 2015 :happy: — these kind of agencies are becoming an anomaly these days. I’m not talking about the 1-man band agencies, who may claim to do XYZ, but don’t get any results. I’m talking about larger agencies that survive (and thrive) without delivering results. They are a rarity these days. Today’s customer who hires an agency is sophisticated and will often only do business with an agency after they have established a prior relationship with the people involved.

Different worldviews. I signed two clients recently that came from exactly this kind of outfit you describe.

One well known agency from Oregon was running an "integrated marketing campaign" complete with a "algorithm" that would intelligently spend their $3000 ad budget on the proper "multi-channel" for their business. They even have call recordings to impress the client.

I dig in and find out they are running a yelp ads campaign combined with a Google ad campaign. And they are just running ads on their own business name. The client still trusts this nonsense so much they are still in the picture, I just have to do SEO. Only a matter of time before I have all the business.

The other client was a similar story, the agency is in Phoenix, but he understood he was sold some BS...but had been locked into a year contract.

They are still out there my dude.

I like 10% of a business’s revenue with 0.5% of the hassles. I just need to get 10 of those businesses, with 5% of their overall hassle, and imo that’s a much better deal than buying 1 of them and getting 100% of the revenue and 100% of the hassle that comes with it.

I think you missed the part about having a partner to handle the hassles. My life hasn't changed in the past year. My bank account has.

Plus, doing things this way allows you to see how much hassle you'd even be signing up for. That's why I didn't want the lingerie biz. I would made money, but I'd feel obliged to show up at night to walk the ladies to their car because it was a bad neighborhood and cute girls attract creepers. I could've hired security, but that's another cost and yadda yadda yadda, there were other factors so it wasn't the deal for me.

But I hear you on not wanting to buy your client's businesses. Those clients of yours are still capped at 10% of their client's revenue. Acquiring other agencies is tough because their will be culture clash etc in a merge situation.

So yeah, obviously my advice is not applicable to everyone. I don't know why you're making the assumption that it is.

The point of the threat is to expose people to a different way of thinking about their agency.

If it doesn't work for you, it doesn't work for you.

I spoke to a guy who owns a $20M/yr agency. He said he never did any marketing for himself, it was all Upwork/Freelancer and referrals. Can you imagine?! What. The. F*ck?!

That's not real. There's this other thread that proves this is fake news. Lolololololol.

The biggest problem for agency owners imo is that they cannot keep the clients they acquire

That never made sense to me. That last time I did the calculation, my average keep rate of the last 10 years was over 3.5 years. 30% of my clients had been with me over 6 years, 20% over 8.

(The numbers would be for sure lower now, I went on an acquisition spree the last 5 months, so those new accounts would bring down the average, but still...)

Once I get a customer, I want them for life. I’d rather spend all my energy perfecting my service than spreading that energy towards perfecting hundreads of other different businesses.

Sure, that's a good point.

It's a little ridiculous suggest that I'm saying "buy a hundred businesses", but I see no reason why an agency owner can't have two or three.

How about some with some alliances? Buy an accounting practice and a sign company. Now you've got some synergies.

Focus wins.

Elon Musk doesn't have focus. Neither does Bezos. Branson. Carlos Slim. Arnault I guess those guys aren't winners...

There are plenty of business owners who need focus to achieve what they want to achieve. You're not wrong.

But there are plenty of business owners who integrate their supply chain and own multiple entities.

There are multiple ways to succeed in business my dude.

I'm just presenting one.

So why are you not talking about how do agency owners add a client on retainer and keep them for life? Because that’s what matters. And then how do you continue to add them, and boom boom boom, soon enough you’re making more revenue than any single customer of yours!

Again, different worldview. I don't have this issue, so it didn't come to mind.

Maybe YOU can start a thread to give your opinion on that. Or you can leave it here, it makes for an interesting discussion either way.

Most agencies don't grow to $20 million. Most don't even grow to $1 million. Most agencies on this forum couldn't handle an influx of 100 clients this year, so yeah, my comments clearly don't apply to ALL agencies.

You play at a higher level, so my take doesn't make sense for you.

Thanks for coming on here to share your feelings.

Fak, I saw a picture of you @BizyDad right before buying your Client’s business right in this thread:

View attachment 47407

“Uhh uhhh sign here grandpa!” :rofl:

View attachment 47408

Bro. You're a big baller, and you troll through these threads with ADS?

I'm totally judging you bro. :rofl::rofl::rofl:

If I don’t have 30 calls with 30 new people every week, I’m depressed.
Dude, winners don’t get down in the first place. That’s for losers only.

puppet-awkward.gif
 

BizyDad

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When you're free, it would be good if you can give a breakdown of your schedule. Never understood how people can do all these unless your 2 businesses are costing you only 6 hours a day to run them both.
Yo, I'll answer this in this thread because I touch on it earlier in this thread and I don't want to reply in that other trainwreck of a thread.

I have a partner in each of my businesses. Very clear division of duties. My relationship with each is very different.

In my agency, my partner is the sole founder. We're about the same age. Even though we are 50/50, I still treat it like it's his company. He does coding, and I run the marketing side. He handles accounting, I do the hiring and set the strategy/goals. We both handle sales, mostly for our own sides of the biz, but we find opportunities for each other as well.
In my ecom biz, My partner is roughly 15 years younger than me. Even though I technically have never been his boss, he defers to me on a lot. But the cool thing is he finally has "the bug" for entrepreneurship. So while I did a fair bit of running things and setting agenda etc, he has taken over greatly. In this biz, he is the majority owner (it was his dad's business before it was ours), so it makes sense that he shoulders more responsibility. He needed time to step into the role. Now I handle agenda/goal setting. I oversee the finances and sales figures, and am sole responsible for the marketing.

Breakdown of my schedule?

The first business day of the month I am alone going through every client's account to set agendas and verify results. Every other Monday is an agency team meeting. Every other Thursday I spend in the office of my ecom biz. That's all the "keep tabs" and formal team communication time I/we need. The rest of my time is filled with client meetings, data analysis, or SEO/G Ads tasks. I put in 35-50 hours per week. Usually one week 35, the next 50, just because of how my schedule is with my kids. I make time for 3 personal training sessions a week, another couple of hours on a treadmill.

When I find tasks that I no longer want to do, I take on more clients to pay for the employee I want to hire. Which I will need to do before I start/acquire my next biz.

I try to be up by 6 am, asleep by 10. But I occasionally get moments of insomnia, like tonight.
 
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Xeon

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Yo, I'll answer this in this thread because I touch on it earlier in this thread and I don't want to reply in that other trainwreck of a thread.

I have a partner in each of my businesses. Very clear division of duties. My relationship with each is very different.

In my agency, my partner is the sole founder. We're about the same age. Even though we are 50/50, I still treat it like it's his company. He does coding, and I run the marketing side. He handles accounting, I do the hiring and set the strategy/goals. We both handle sales, mostly for our own sides of the biz, but we find opportunities for each other as well.
In my ecom biz, My partner is roughly 15 years younger than me. Even though I technically have never been his boss, he defers to me on a lot. But the cool thing is he finally has "the bug" for entrepreneurship. So while I did a fair bit of running things and setting agenda etc, he has taken over greatly. In this biz, he is the majority owner (it was his dad's business before it was ours), so it makes sense that he shoulders more responsibility. He needed time to step into the role. Now I handle agenda/goal setting. I oversee the finances and sales figures, and am sole responsible for the marketing.

Breakdown of my schedule?

The first business day of the month I am alone going through every client's account to set agendas and verify results. Every other Monday is an agency team meeting. Every other Thursday I spend in the office of my ecom biz. That's all the "keep tabs" and formal team communication time I/we need. The rest of my time is filled with client meetings, data analysis, or SEO/G Ads tasks. I put in 35-50 hours per week. Usually one week 35, the next 50, just because of how my schedule is with my kids. I make time for 3 personal training sessions a week, another couple of hours on a treadmill.

When I find tasks that I no longer want to do, I take on more clients to pay for the employee I want to hire. Which I will need to do before I start/acquire my next biz.

I try to be up by 6 am, asleep by 10. But I occasionally get moments of insomnia, like tonight.

Thank you for the insight!
 

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I had a lunch today with a good friend of mine who is definitely more successful than me. And after that lunch, I am more convinced than ever that this is the right way for me to go with my agency.

A little background...

My friend and I started in business around the same time. We actually had a partnership with a third person, that business fizzled fast, and we all went our separate ways.

Make a long story short, he has created and sold a couple endeavors whilst I... Haven't. He is one of the yardsticks that I measure my progress by.

He is 6ish years into his latest venture. His revenue is mid-7 figures. I toured his facility. Shelves to the ceiling of product. 15 employees, everyone fulfilling their roles. I'm so proud of my friend and what he's accomplished.

He showed me a landing page of his. I couldn't suggest a single improvement. That almost never happens. As I was scrolling through the page, I kept thinking to myself the next thing I want to see is... And then it would appear. It was a work of marketing art. A work by a master. I asked him who at his company was responsible for this because they deserved a raise. He said he did it. All by himself.

I'm so proud of this dude. He's gone so far.

Today I heard a lot about the stress that came with the life he chose. I heard about how little he paid himself, relative to his sales figures, because he had to tie up his money in inventory. I'm sure that's a common complaint amongst the successful entrepreneurs on the forum.

I compared what he's paying himself, to what I'll likely earn this year. I'm not that far behind.

And while he feels like he needs to move mountains to double his income, and I'm sure he will, I feel like I just need one acquisition. Or two more employees and a decent sales blitz.

Now in the grand scheme of things... My bro has a valuable asset he has built there. His net worth dwarf's mine.

But after today, if I had to go back 14 years ago to those debates we were having in that little three-person partnership about the most effective ways to run a business, if I could go back to then and trade places, walk his path, I don't think I would.

My friend is more fast lane than me. But I think I'm more free. And that is just an amazing reality.

By the time it's all said and done, I think my net worth will pass his. And that also is just plain amazing.
 
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A lot of great points in this thread. Buying businesses, especially if you can increase revenue and decrease expenses will result in an increase in the overall business valuation by a certain multiple.

This is the reason I’ve been purchasing commercial real estate due to how it’s similarly valued as a business. You can “force” appreciation purely by increasing your NOI/EBITDA.
 

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I've been wanting to write this post for a while. I thought I might call it the biggest mistake marketing agency owners make.

Before we get to the good stuff, I have a bone to pick with marketing agencies.

If you run the kind of marketing agency where you take a client's money, but you produce no results, you do not have a marketing agency, you have a fraudulent business. And this thread will not help you. I would call this the biggest mistake marketing agencies make, but being a shyster isn't a mistake, it's a total shame.

Okay now that we got that on out of the way.

The biggest mistake I see marketing agency owners make is thinking that they are running a marketing agency.

Do you know the story of McDonald's? It's a common story told in business circles, but in case you don't know, McDonald's is not a burger chain. McDonald's is a billion dollar real estate empire. They own some of the prime real estate on some of the best corners in every city and town, first in America, then the world.

And making that little switch in their mentality catapulted them from a Henry Ford style burger flipping operation to one of the biggest, most profitable companies in the world.

I would like to submit a similar change in your mindset on your marketing agency.

Because if you can truly produce results, marketing results, in other words you can connect people who need a product or service with a company that can provide that product or service, why in the world are you running a marketing agency?

Do you know how much business revenue a business is "supposed to" devote to their marketing? 10%.

Let's not argue about the number. Maybe some spend more maybe some spend less. But let's just agree on that hypothetical number.

That means that as a marketing agency, the BEST you can hope for is 10% of a client's revenue. And some of that's going to go to ad budget. And paying people to fulfill on the work.

And you keep what's left.

Okay. But you get a bunch of clients and you make a good living, right?

What's wrong with that Bizydad?

Well... what if your marketing agency serves a business you already own?

Now your agency is getting 10%, but you're also keeping the other 100% of the second business's profit.

Hopefully with this rest of this article I'm going to show you how you can accomplish this while sticking with what you know and not adding too much more on your plate.

But Bizydad, what other business am I supposed to run?

Well, what skills do you have to bring to the table? You're running your own company, so you've got some financial ability. Hopefully. And you've got some sweet marketing skills. The ability to bring prospects.

So what niches do you serve? Start there.

But Bizydad, How am I supposed to start one of those businesses from scratch?

Well let's back up. Nobody said you had to start anything from scratch. But you probably could…

Now think about this. If you do a good job for a client, are they going to keep you around?

Of course.

And if you've got a client for years, are you building up rapport with them?

Well not if you're running the kind of agency that only sends out monthly cookie cutter PDF reports!!! Or if you run the kind of agency where you put the least knowledgeable person in front of the client as an "account rep".

Sorry, I got on my soapbox again.

If you, you personally, actually treat a client like a real person, get to know them, build rapport, in time you can start asking questions that don't relate to marketing.

And one of my favorite questions to ask, I'll even ask this one in the sales meeting before I take them on, is…

What is your exit strategy for this business?

I know before I sign a client up when they are planning to exit their business. Or if they are planning to. Or if they haven't even given it a thought.

And their response tells me a lot about who they are as a business owner, and how they run their business.

I've seen people come on the forum for time to time and ask how to acquire a boomer's business. Now is the time. Boomers are half retired.

I am proposing you start a marketing agency and help a boomers grow their business until they're ready to retire.

And when they're ready to retire, if you've got that rapport, you'll know they're prepping for sale before their business broker or accountant will.

But Bizydad, I'm busy running my own marketing agency, How do I have the time to run something else?

Well if you spent 5 years walking into an office (You do walk into your clients offices don't you?) you've probably gotten to know more than just the owner. Who are the other players? Who are the sales people? Who is the general manager?

Those employees come with the business.

But Bizydad, where will I get the money to buy this business?

Well, you've been running your marketing agency a while right? You should have some of your own money. Or did you lose it chasing the last crypto bubble?

Besides, where do you get the money to buy any business? Ask friends and family. Find an investor. Take out a loan. If you've got a 5-year relationship with your client, hopefully they'll be willing to take a chunk of change and do a seller carry back. Or maybe you can partner with the general manager to buy the business together.

There's numerous ways to solve the problem.

I've mentioned it in other threads but I have executed on this exact strategy.

I have run my agency for 13 years. To be fair, the first 8 years I was more concerned with keeping a wife happy and having work life balance. But all the while I was planting seeds with my boomer clients. To date three of them approached me to purchase their business, and at the beginning of last year I closed on one.

In 2021, the business did $1.2M in sales. Thanks to the owners decision to try to save on taxes, the business was showing very little profit. I partnered with his son to buy the business, so we got an extra good deal. (Of course I already had solid rapport with him too. He was the company's top salesperson. I couldn't run the company without him. He even referred his best friend to work in my agency. And of course I hired the best friend, which turned out to be an incredible decision.)

By implementing cost cutting measures, and improving the marketing efforts (that I had recommended to the client but he never implemented), we made our purchase price back in the first hundred days. We had invested more than just the purchase price, but as of today's date, we have doubled our money. Just 14 months later. We did $1.6M last year and are pacing for $2.1M this year.

Fam, I basically doubled my income in a year and my day-to-day work life barely changed. I don't even want to get into the impact of this on my net worth. (It's good).

But the beauty of this strategy is that I now have a business partner who is almost addicted to building systems and running businesses. 5 years ago he was making… I'll just say less than a living wage as a newspaper writer.

And because my partner handles the day to day, all I have to do, is…

Run a team of marketers to grow the businesses.
Cash checks.
Purchase next business.
Occasionally offer strategy advice to my partner.

---

People worry so much about what business they should start.

Imagine having a business model where you can acquire an existing, established money making business and you could see the back end, the guts of the business for years already so you know what you're buying.

People think that buying businesses is risky.

Does this sound risky to you?

-----

Some more thoughts…

If your goal is ultimately to acquire your client's business, how does that change your prospecting for clients? Do you want to stay in one niche, or do you want to broaden out?

Personally, I do cheap SEO for a business coach, business broker, a lawyer, and an accountant. Because I don't know everything, I now have people I can ask questions of and not have to pay their hourly rate. Side note, they all send me really qualified clients. And the business broker even sends me other agencies to acquire. Ha!

Taking it another way, I'm considering a future venture in real estate. I now have a painter, a remodeler, a plumber, a roofer, an AC guy, and an electrician as agency clients.

How does this strategy change your pricing? Do you try and get as much out of them as you can? Or do you start with a lower bid so you can get an easy yes and start building rapport?

If something goes wrong and your agency screws up, do tell the client to pound sand? Or do you work harder to make it right? Do you maybe cut your fee for a month?

See a big part of this tactic, for this to truly work, you have to present yourself as the kind of person that someone would want to sell their business to.

Which means you're a problem solver. And you display fairness. You understand their needs and goals, and you work to get them there.

These boomers appreciate their employees. They don't want someone who's just going to run their ship into the ground.

So show up on time for meetings. Do what you say you're going to do. Be professional. Be reliable and dependable. Celebrate successes with your clients.

Okay, hopefully you get the idea. You don't have to set off running a marketing agency. You can choose to build a business accelerator instead. Or a business incubator.

The day-to-day practices seem the same, or at least very very similar, but if you have a different end goal, you will make different choices about how you approach the business.

I'm sure I haven't written everything that I can think of about this topic, but I'm losing steam, so feel free to ask questions and I'll answer the best I'm able.

And I just want to give a shout out to a new forum member @Jo_t95 who seems to understand this also. Based on his forum thread, sounds like he's doing a similar tactic but going the revenue share/partnership/eventual franchise route. Pretty clever. Just goes to show there's several ways to execute on this strategy.
Nice.

I love messing with the cold DMers on LinkedIn and Facebook.

"Do you need more clients for your agency?"

"No. I'm not building an agency."

"..."

I'm not building an agency. Sure, I have marketing clients and you could say I already have an agency (I prefer to call it a consultancy and budding productised service).

It's just that I have no desire to *build* it any bigger.

I'd rather use my skills to build consumer facing brands I own, rather than ones someone else owns.
 

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