9 Tips I’d tell my younger self about running a Design Agency

9 Tips I’d tell my younger self about running a Design Agency

Being a good designer doesn’t necessarily mean you’ll be good at running a design agency. Here I look at how designers - myself included - can be better at business.

by Peter Burch  @ptburch  petertburch 15th October, 2020 read time: 15 mins

As I’ve learned first hand over the past few years, being a good designer doesn’t necessarily mean you’ll be good at running a design agency. The same would apply to most professional trades, from baking bread to building battleships. If I could visit my younger self and impart my wisdom, here are 9 things I’d tell myself about running a successful design agency.

9 things I'd tell my younger self about running a design agency

1. Have ONE Big Goal (and only one)

Having a singular goal provides clarity and helps focus everything that you do. Set a goal that’s appropriate to you. Now, with every new client or piece of work that comes along ask yourself: does doing this help me reach my goal?

Facebook has user growth as its focus goal. For March, our tangible goal for this year is profit. Money is not the reason we went into business, but it will help us to achieve our personal goals. Ask what you want from life, and then define a goal where your business can help you achieve this. For some it may mean financial security, for others, it might mean the flexibility of time to spend with family and friends, for others it may mean being able to work from anywhere (and we’ve done that too – hello Kuala Lumpur!)

Further reading:

2. Work ON your business, not IN it

While design services (or even products) is what you provide your clients, your business itself should be the best thing you make. Steer away from the mindset of the technical work you do and instead focus on the business itself.

When you think of certain industries or sectors, some names will immediately spring to mind. Why? Because they have worked ON their business, not IN it. New business ventures come to them naturally – they get to pick and choose what to work on and can charge a higher fee.

Treat your design agency as if it were a product. Adopting this mindset, now review your product and how it currently performs in terms of its:

  • Marketing
  • Sales
  • Delivery (i. e., what you do)
  • People
  • Finance

Give yourself a score out of 100 for each and see where you need to improve. Apply small, achievable but valuable iterative changes to raise each one. If you decide to work with a business coach, this will likely be the first thing they will help you to evaluate and improve.

How to run a design agency
An iteration session at March

Don’t try to complete everything at once – it will overwhelm you.

“There is only one way to eat an elephant: one bite at a time” – Desmond Tutu

Break your tasks down into smaller tasks, and work on what you can on a regular basis. It may mean blocking out time each week spent purely on business development.  

Put the time into developing your business and raising its profile. This might include refining your website, creating a brochure, speaking at events, blogging, podcasts, and creating content that people are naturally interested in. The work you put in now will pay for itself in the long run.

Further reading:

3. No > Yes

It’s easy to say Yes. Yes to that highly demanding client. Yes to that deadline that will mean your team needs to work weekends for the foreseeable future. Yes after that overly frugal client browbeat your rate down but you really need the money this month.

Saying No takes courage. Shitty brief? Just say No. Sector you’re not interested in? No. Unrealistic deadline simply for the sake of it? Hell No!

The more of one type of work you say yes to, the more you will be known for doing it. Your bad habits will become the new normal.

Earlier in the year, we kept getting asked to create digital products for a sector we were not interested in pursuing. While we could do it and have done so successfully in the past, it’s not what we’re interested in. We gradually began declining these types of leads. This allowed us to take on more work which we are interested in. We’ve been a much happier company ever since, both at the office and at home. The clients we do take on also receive a much better service as a result. Triple win!

4. Pitch to your Clients regularly…

Put yourself in your client’s shoes, and imagine that you are the owner of their businesses for a week. Using your own knowledge, what would you do to improve their brand? What value could you add to their business?

Write down everything that comes to mind and research each one. Now pitch it to your client.

Don’t be put off if some of your clients do not initially respond or show interest – remember they are also working on their own business and may have other things that take priority. That’s fine – write everything down in your CRM or where you can easily reference it in the future. Some of our clients often return to these actions 3, 6, or even 12 months down the line. Keep pitching new ideas, even if you’ve only recently sent an idea to them.

By pitching ideas you will go beyond design – you are effectively pitching value to the client’s business while also raising your own value to them. Be Irreplaceable.

5. …and have your Clients Pitch for You

Before a recent pitch to a new client, we decided to try something different – we’d ask our clients to present on our behalf.

We approached four of our existing clients with the idea. I’ll admit, we were nervous at first. Even though we enjoy a strong relationship with our clients, we wondered: how would they react? It turns out that people are naturally inclined to help one another. All four clients recorded a brief video explaining what it’s like to work with March and how it could be of benefit to them.

Anyone can fudge together some stats and testimonials out of context, but hearing it directly from the client added an extra layer of trust. The prospective client was so impressed that they signed-off and we won the project over the other agencies.

6. Profit > Revenue

Some brands are all about chasing revenue. In our time in business we’ve met other agency owners who may show-off their prestigious clientele, or their sales, or their number of employees, or their office with all its perks. What they might not tell you is their actual PROFIT. For agencies with a low-profit margin or worse still – no profit, they might only need one client to leave them before making someone redundant. Revenue is for show, but profit is calm. No profitable business ever went out of business. 

Use software to review cash flow, sales pipelines, and review expenses on a regular basis – we do this each month via FreeAgent.

Be lean. Do you really need that software licence for that app or program you use once a year? Negotiate with your providers, for instance, after raising a support ticket with Adobe they knocked our licences down from over £1,000 to £500 a year – that was one of the most profitable 30 minutes I’ve ever spent!

If you’re the business owner, take a director’s salary with dividends. You can also pay into a stakeholders pension for tax efficiency.

If you’ve just started out, then look at taking advantage of HMRC’s VAT Flat Rate scheme. In some cases, this means you could claw back approximately 50% of your chargeable VAT. This will mostly depend on your turnover and also the type of expenses you incur, but it’s worth asking your accountant to do the maths to see if it’s appropriate for you.

Review all your clients/projects every month and work out which ones are the most profitable (you will need to install a timesheet and profitability culture in order to do this, but that’s a conversation for another day). Put all your data into a spreadsheet, or use accounts software such as Xero. What do the most/least profitable have in common? Are you putting in excess hours into some clients for little reward? On the other end of the spectrum, which clients are the most profitable and why? Is it because your process for those types of projects are streamlined, are you more efficient at working in that particular sector? Identify those, evaluate why they are profitable, and look for more projects in that mold.

7. It’s only Best Practice if it’s Best for You

Go on Google and search for “best practices” and you’ll find thousands of articles extolling the virtues of X or Y. However, what works best for WPP and Dentsu may not be the best practice for your own business.

We regularly review our internal processes to see if they are the most effective for us. This ranges from the software that we use, to how we communicate with staff and clients, to our third-party providers, to how we pitch, and so on.

Software we use to improve our internal processes:

FreeAgent. Don’t do your finances manually in Excel, or worse, on paper! Use a good online accounting system. We use FreeAgent for time tracking, invoicing (including automated reminders for late payments), financial reports, tracking cash flow and running payroll. Other solutions are out there such as Xero, Sage, Quickbooks and Kashflow. Most of them have a trial period, so use what feels most suitable for your needs.

Better Proposals. For contracts and proposals, we tend to draft everything first in Google Docs (in order to track changes) and then populate into Better Proposals. This allows us to have beautifully designed documents that can be saved as reusable templates. It also includes an online signature feature, which means we no longer need a separate signature document or software. We keep our proposals up to date with a bulletproof contract – I cannot stress the importance enough of having this. Have an employment lawyer review your contracts every 12 – 18 months.

Monday.com. We migrated from Trello to Monday for project management and workflow. We’ve also adapted it to work as our CRM, and also opened it up to some of our clients in order for them to track progress or log requests.

Monday.com Dashboard Example
Example dashboard for Monday.com

Slack. Real-time chat for internal use and for our peer support networks. For us, Slack tends to sit somewhere between Monday and WhatsApp – typically used when we have a question regarding a project or technical issue, or for day to day chit chat between staff. We tend to reduce Slack due to its interrupting nature and instead favour Monday.com for asynchronous requests.

WhatsApp. When living and working overseas in Kuala Lumpur, I found most local businesses would communicate via WhatsApp – there was virtually no one using email, which by comparison was considered old fashioned and slow. There are pros and cons to using real-time chat. If you go down this route it’s wise to have a separate phone for business calls, after all, you wouldn’t want a text at 10pm from a client on your personal mobile. We use WhatsApp for urgent requests when it cannot wait, but more on that next.

8. Important vs Urgent

Time is your most valuable asset. Guard it against the time vampires who would steal this from you. 

Apply Dwight D. Eisenhower’s Matrix to your thinking:

The Eisenhower Matrix - Running A Design Agency
Eisenhower’s Matrix. Copyright Eisenhower.me

Cut out as much interruption as possible. Aim to work as much within the Important and Less Urgent quadrant – this is where your best thinking and your best work will be performed.

“What is important is seldom urgent, and what is urgent is seldom important” – Dwight D. Eisenhower

Further reading:

9. Join a peer support network (and contribute!)

The Agency Collective is an excellent resource for peer support, partnerships and socialising for agency founders, as is Agencynomics. You can even look at joining non-agency based groups or a local Chamber of Commerce.

Don’t wish to join a large network? Fine, make one for yourself with 3 or 4 agency owners that you know. Try to only have 1 representative from each service type so there’s no conflict of interest, for instance, we have an excellent peer support group featuring an animation agency, an SEO agency, a radio advertising agency, and a content marketing agency.

Make yourself accountable to others when it comes to your business goals. Most importantly, by being part of a peer group, you’ll have a shoulder to lean on with people who appreciate what it’s like to run a design agency or similar business.

Now go forth – and ROCK!

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