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EP9: Scaling Your Agency (Part 1)
“If you’re going to be in the market looking to increase your return, you better have all of the information.”
Adam Rundle (17:54-17:58)
A growth model is one of the most powerful tools for scaling your agency. A growth model plots the performance of your business over time. It lets you see how your business is doing as you plot variables on a graph so you see what’s actually happening. But more importantly, a growth model helps you clearly see where you want to go and how you’ll get there.
Many business owners see growth as something linear. But in reality, the growth of any business is anything but linear, and having a growth model helps you through the ups and downs so you have a true depiction of what your business actually looks like.
“The second you decide to start a business, a growth model becomes important… whether you like it or not.” - Adam Rundle (5:08-5:12)
Many business owners wonder when the right time to develop a growth model might be. The answer to that question is that there’s no such thing as the right time. A growth model should be put in place as soon as you start your business. Once you create a model for growth, you begin to create a roadmap for the decisions you’ll make each day as you move towards the outcome you want. Much like an athlete preparing for a game, business owners need to have as much information as possible before stepping out onto the playing field. Being in a position where pressures relating to cash flow are holding you back is a problem you don’t want to have.
How to Create a Growth Map
One of the simplest ways to build a growth map is to create a graph with an x-axis (horizontal) and a y-axis. Although you can use whatever variables matter most to your business, the most fundamental graph model looks at revenue (x-axis) and profitability (y-axis). Profitability is the real measure of success in any business. Yet, many agencies only plot revenue, which means they’re missing an important piece of the growth puzzle. It doesn’t matter how many points you score in the game if the other team scores more than you.
Your growth model also has to consider your goal. What is it you’re trying to achieve? Having a specified goal in place keeps you from making costly mistakes as you move forward. You need to recognize the ups and downs of growth. Like the stock market, the growth of your business will look jagged as revenue and profitability ebb and flow. When you recognize the changing growth patterns, you’re more likely to make the decisions that give you higher returns.
Investing your money in the stock market and leaving it alone may yield an 8.2% return. But when you understand how the market works and you navigate its ups and downs through basic trading principles (buy low, sell high), you can dramatically increase your returns over time. Not having the right information - in the same way as if you failed to create a growth model for your business - could cause you to actually decrease your returns by missing out on opportunities.
“If you can formulate the ideal growth model, you can create the roadmap you need to make decisions every day to achieve the outcome you want.” - Adam Rundle (2:10-2:19)
Growing and scaling an agency is never a straight line from point A to point B. Your ability to manage the ups and downs is what will ultimately determine your level of success in the marketplace. Not knowing what decisions you need to make and when can cause your profitability to flatline or worse. Growth models give you invaluable and critical information to make the key decisions that position your agency for lasting growth and success.
How to get involved
If you would like more information about ABR, and the success businesses have gained through their work with the firm, visit their website.
If you liked this episode, be sure to subscribe and leave a quick review on iTunes. It would mean the world to hear your feedback and we’d love for you to help us spread the word!
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By Adam Rundle“If you’re going to be in the market looking to increase your return, you better have all of the information.”
Adam Rundle (17:54-17:58)
A growth model is one of the most powerful tools for scaling your agency. A growth model plots the performance of your business over time. It lets you see how your business is doing as you plot variables on a graph so you see what’s actually happening. But more importantly, a growth model helps you clearly see where you want to go and how you’ll get there.
Many business owners see growth as something linear. But in reality, the growth of any business is anything but linear, and having a growth model helps you through the ups and downs so you have a true depiction of what your business actually looks like.
“The second you decide to start a business, a growth model becomes important… whether you like it or not.” - Adam Rundle (5:08-5:12)
Many business owners wonder when the right time to develop a growth model might be. The answer to that question is that there’s no such thing as the right time. A growth model should be put in place as soon as you start your business. Once you create a model for growth, you begin to create a roadmap for the decisions you’ll make each day as you move towards the outcome you want. Much like an athlete preparing for a game, business owners need to have as much information as possible before stepping out onto the playing field. Being in a position where pressures relating to cash flow are holding you back is a problem you don’t want to have.
How to Create a Growth Map
One of the simplest ways to build a growth map is to create a graph with an x-axis (horizontal) and a y-axis. Although you can use whatever variables matter most to your business, the most fundamental graph model looks at revenue (x-axis) and profitability (y-axis). Profitability is the real measure of success in any business. Yet, many agencies only plot revenue, which means they’re missing an important piece of the growth puzzle. It doesn’t matter how many points you score in the game if the other team scores more than you.
Your growth model also has to consider your goal. What is it you’re trying to achieve? Having a specified goal in place keeps you from making costly mistakes as you move forward. You need to recognize the ups and downs of growth. Like the stock market, the growth of your business will look jagged as revenue and profitability ebb and flow. When you recognize the changing growth patterns, you’re more likely to make the decisions that give you higher returns.
Investing your money in the stock market and leaving it alone may yield an 8.2% return. But when you understand how the market works and you navigate its ups and downs through basic trading principles (buy low, sell high), you can dramatically increase your returns over time. Not having the right information - in the same way as if you failed to create a growth model for your business - could cause you to actually decrease your returns by missing out on opportunities.
“If you can formulate the ideal growth model, you can create the roadmap you need to make decisions every day to achieve the outcome you want.” - Adam Rundle (2:10-2:19)
Growing and scaling an agency is never a straight line from point A to point B. Your ability to manage the ups and downs is what will ultimately determine your level of success in the marketplace. Not knowing what decisions you need to make and when can cause your profitability to flatline or worse. Growth models give you invaluable and critical information to make the key decisions that position your agency for lasting growth and success.
How to get involved
If you would like more information about ABR, and the success businesses have gained through their work with the firm, visit their website.
If you liked this episode, be sure to subscribe and leave a quick review on iTunes. It would mean the world to hear your feedback and we’d love for you to help us spread the word!