Paul Stephen: How We Grew Our Agency from £1m to £5m

by | Jun 24, 2020

Paul Stephen, CEO of Sagittarius, talks through how he took over an agency and scaled it from £1m to £5m. He openly describes the challenges along the way, and the process of realising that he may be the one holding the agency back.

Sagittarius “bobbed along” for years as a sub-£1m agency. How did it finally grow? And why did it take much longer than expected?

Stephen describes Sagittarius as a ‘digital transformation agency’. He suggests at present they focus on sectors with clusters of clients, such as:

  • Construction
  • Travel and Tourism
  • Healthcare

He explained how over the course of lockdown, his agency has had the ‘best two months’ they had ever had, and that the lockdown had actually ‘carried their momentum’.

In 2003, Stephen took over Sagittarius, which at the time ‘was 25% digital media based, 75% printing press’. Focussing on ‘design, advertising, and print, the turnover was sitting at around £1m’. He explained that by 2010, they ‘were almost all digital, but really the clients hadn’t really changed’.

Stephen and his business partner Nick had ambitions to ‘be better than they were’. He explains that he realised that ‘Nick and I were the ones holding the agency back, because of our inexperience and small-mindedness’.

He explained at this point, Sagittarius were ‘working mostly based on referrals’, so needed to work out ‘how [they were to] move on from [where they were].’

In 2012, Sagittarius won some awards for an app for Headspace the app. It was at this point Stephen explains how he thought ‘Alright, we can do some serious stuff here’.

He went on to discuss how he started looking over their portfolio and looking for ‘how they could show our experience to brands looking to work with us now.’

He explained that choosing specific sectors and not trying to do everything was very important for scaling. ‘We had done some work with big brands like Tesco, but we stopped talking about it because we were just muddying the water, and detracting from the sectors we were trying to focus on’.

Once Stephen realised he was winning clients, he knew that ‘as you get more momentum and clients, you need more structure and to be able to scale’.  ‘We needed someone to manage people’, and also ‘someone to manage the marketing side of growth and finding new clients’.

In 2014, ‘we tried to grow, ‘but became more inefficient, probably because of the mindshare necessary for a restructure and the time that goes into it, we lost 100,000k turnover that year, and actually shrunk back down again’.

Moving forward Stephen explained how ‘they are currently maintaining growth of around 10 people a year’. But, how at first, ‘we had to hire more senior people, which was very expensive. It had to be a little bit top-heavy for a while whilst we recruited everyone else’.

At present, after their best quarter to date, Simon explains the stipulation in his contracts with clients that suggests they ‘cannot just up sticks and leave’. ‘We set out that we wanted to have between 60-70% of our work on a retainer, and at the moment we are sitting at around 60%’.

Now, ‘instead of buying a project, clients buy a team of people to complete that project, we become an extension of their team when we work on their projects’.