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.
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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