Perfectly Formed – We’re Small and We’re Staying Small

by | Jul 15, 2020

Supposedly, there are three life cycle stages of agency growth:

  • Stage 1. The Lifestyle Stage– Up to about 12 people
  • Stage 2. The Desert Stage– 12-50 people
  • Stage 3. Performance Agency– over 50+ people

Tom Greenwood, who runs Wholegrain Digital, suggests that ‘there is a stigma surrounding the term “lifestyle business”, but the reason we started our agency because we wanted to lead a certain personal lifestyle. It wasn’t about having lots of money it was about being able to have flexibility over our time and location, and to work on projects we find personally meaningful.’

‘The financial side is a means to an end, but only up until a point. If you push it too far you lose the reason you started in the first place. If I hang out with lots of agency owners there is a sense of pressure to grow and focus on the financials.’

Matthew Burleton, from Story Short Design, notes that ‘we weren’t taking proper care of our balance sheets and ran into financial difficulty. We steered the company in a completely new direction when we realised we didn’t have much time left to rectify our issues. We worked on putting the right people in the right places and putting processes in place, but we were spreading ourselves too thin. To speak broadly, ‘more people more problems.’

‘We have reached a point where we have money in the bank and we are at capacity but we don’t have anyone on our backs.’ Although he notes how much calmer this management strategy can be, he does suggests that he still worries about ‘the future and about growth.’

Vicki Young, CEO of NALA, explains that ‘although [she] wants to be growing and push the company forward, [she] doesn’t want to stress her team or disrupt their work-life balance.’

Tom further suggests that running a small agency means he gets to ‘work with the people he likes on the projects that he finds meaningful.’

Andy Headington, who has been running his agency for 17 years notes that ‘growth is a massive pain and stress. Having dropped back down from 40 people to between 15-20 Andy’s agency is much ‘more profitable and their clients are much happier.’

‘When agency owners discuss growth they usually mean an increase in headcount and in revenue, and actually that’s a dangerous mentality. When in reality, growing clients and a reputation can be equally as rewarding.’

‘Whilst your agency is small there is an obligation for everyone to be involved in the finances and everyone seems to pull together.’ When discussing other metrics by which to measure growth as an alternative to profit, Andy suggests that client satisfaction and NPS is a metric they are motivated by.

Donovan Justice suggests that his team use a similar ENPS score with employees to ‘correlate employ satisfaction with how busy the agency’ were or ‘the type of work’ they are doing. ‘The better our culture is, the better our profits are and the more attractive our agency becomes.’

Another agency owner, Ian Morris, mentions that previously when he had said ‘we are a fairly small agency’ he had always looked at the floor almost out of embarrassment, but ‘actually now, we’ve realised we are winning contracts against the bigger players, and the work we produce is of a high quality because we aren’t always chasing the biggest margins.’

Tom adds that ‘taking the ego out of the equation will make your work-life balance a lot better.’