Smart Agency Masterclass with Jason Swenk: Podcast for Digital Marketing Agencies

Struggling to win new agency business in order to supercharge growth? Stuck working in the business and unable to step back in order to work on the business? Your role as an agency leader is always evolving as the agency grows. But your #1 job is being an amazing leader and giving your team the guidance and support they need.

In this episode, we'll cover:

• How to win new agency business by building relationships.
• #1 way to supercharge digital agency growth.
• 3 tips for being an amazing digital agency leader.

Today, I talked with Steve Weiss, Co-founder of MuteSix — a Facebook ad agency. Steve moved to Los Angeles, CA to do standup comedy and instead ended up creating a digital agency. Four years later and he is now running an 8-figure agency with over 130 employees! So, how does a comedian transition to a massively successful agency owner....? "Did you ever hear the one about the wildly successful agency owner?" No? Then stick around as Steve shares his story of growth, including his top 3 tips for being a better agency leader :)

As agency owners, we always want to win the pitch and land new business. You get in the room with the prospect and you want to tell them you can handle anything. You're willing to do anything and be anything in order to win a pitch. But that never ends well, does it? In Steve's case, he uses humor (remember, he's a former standup comedian!) to his benefit...

It's ok to tell a prospect you don't know how to do something. Be the authority in a specific niche - horizontal and/or vertical. When they ask for something outside of your skillset, be honest or use humor like Steve. For example, he tells prospects that SEO is like "black magic" to him, but what he's really good at it Facebook ads. And, he tells them his agency crushes Facebook ads; there's no one better at Facebook ads. His honesty and a bit of humor builds trust and creates the foundation for a relationship.

In fact, it can be the secret to winning the pitch. If you're candid with them, they're going to respect you more for it. We can all smell a sales pitch from a mile away. So can your prospects. When you start bragging, they know you're desperate for the sale. Be truthful, honest, and win business with ideal clients who appreciate who you are.

They'll believe you when you tell them what you're actually good at. So, instead of trying to convince clients you're "full service" even though you aren't, think about flipping the script. Be honest with them. And, use that honesty to form a great relationship.

Want to know the secret to accelerate digital agency growth? You can't do it alone ~ you need a team :) Empowering your team is one of the easiest ways to achieve fast growth. If you hired right, your team is filled with skill and talent. You want is to be the smartest person in the room. Hire people who are smarter and better than you are and reap the benefits of supercharging your agency's growth.

Believe me, if I would have been the smartest person at my digital agency, we would have never gotten anywhere!

Steve says to give your team some room to grow and dominate projects on their own. And, always put your team ahead of revenue. Clients come-and-go. Good team members don't. It's hard to find people who fit into your culture, understand your vision, and have the passion to create results on their own. Your team is your biggest asset so treat them as such.

Being a leader isn't all about you, your agency, and your vision... It's about providing opportunity and a pathway for growth and fulfillment. When you're a great leader that alone can be fulfilling for you. It's a win-win.

1. Lead by example.

Don't tell your team how to win, show them how. As a digital agency owner, all eyes are on you. Yes, it can be stressful, but leading by example is a good way to empower your team. Recognize your team's strengths and make sure you're continually developing those, rather than focusing on their weaknesses. Let your team shine by showing them how to become even better.

2. Don't try to please everyone.

Don't be the people pleaser. You have to know when to say no. And you should always be willing to bring up issues with your team. Try to be friendly and have fun with your team, for sure. But, at the end of the day, you still have to be respected as the leader and not just another guy or gal on the team.

3. Learn how to fire.

You should never have to motivate an employee. It's ok to inspire them, but motivation needs to come from within. Share the vision with them to inspire. Show them how they're part of something bigger and how their role creates a residual effect on clients and your clients' clients. That's inspiring! But if you've got someone who needs constant motivation, then it's probably time to fire them. It's not as hard as it sounds and eliminating dead weight will actually benefit the rest of the team and the overall culture.

Experts are sensing a downturn in the economy... But is your agency recession proof? So many variables go into a healthy agency. Maybe you should look at raising agency prices? Maybe your agency really needs to hire (or fire) to make yourself indispensable to clients? If the economy takes a hit, you have to know who to hire, who to fire, and the right way to price your services in order to survive.

In today's episode, we'll cover:

• How to grow in a recession.
• When should you raise your prices?
• 3 reasons clients love project managers.
• Is your agency business partner still the right fit?

I had a great conversation with Scarlett Rosier, Co-founder of Rhyme and Reason Design. Scarlett is one of those "unicorns" who actually went to college and got a Masters in Advertising. (So many of us are accidental agency owners who just fell into the business!) Scarlett is put her skills to work as the Director of Operations at her agency for the past 10 years. She's here to talk about growing in a down economy, nailing your pricing, and the value in project managers.

Worried about a potentially volatile economy? Don't be! When the market goes down, your agency has an opportunity to go up. Here's the big secret — in-house marketing teams are usually the first cut.

Cutting the in-house team, therefore, justifies agency costs for your clients. Brands still need marketing in a recession. But, they can usually save money by getting more help externally.

Don't fear a recession; embrace it. If you survive the recession, you'll have a bunch of new clients and a reason to raise prices. And you need to raise prices in order to be profitable.

The simplest answer is this — whenever you can! You have to be able to justify a price increase with value. So, if your value has gone up over the past year, your prices should too.

Let's say you've hired two new people, learned a ton of tips and tricks, and you're even better at helping clients this year than you were last year. Your prices should reflect those improvements because your clients are benefitting from them.

I recommend reviewing and raising prices at least once a year. You should constantly be improving, building better processes, learning new techniques and strategies. And that means you're giving clients more value year-over-year.

Adjust your proposals to match the increased value. Plus, you probably give your employees a yearly raise based on performance, right? Your clients should be giving you one too!

Think about it this way... If you have a heart attack, are you going to use the best surgeon or the cheapest one? Price your agency services to match your skill and you'll attract the ideal clients instead of the ones who just want a bargain.

A price increase is the fastest and easiest way to grow your agency business.

Want to know what clients really want? They want relationships and regular communication. They want to feel assured they've made the right decision to work with your agency. And that's where a great PM helps retain clients.

1. They're the client's trusted advisor. Your clients need someone to touch base with so they don't feel like they're in the dark. Clients have questions, ideas and business goals they want to talk about. A PM is their agency contact for listening, sharing, and connecting.
2. They are a single point of contact. No client wants to have to go through a new person every time they need something, and frankly allowing them to do that would cause massive problems anyhow. Project managers build client relationships, which brings tangible value to your agency. It's easier to make existing clients happy than constantly bringing on new ones, right? Happy clients make agencies giant.
3. Project managers attack pain points. Hiring an agency requires a leap of faith on the client's part. They don't know if they're going to get results, and they're spending money on potential value. Project managers can help ease those fears and avoid buyers remorse. A good PM will anticipate the client's fears and talk through them.

Business partner relationships can be like a marriage. You rely on each other, and you know the day-to-day struggles the other faces. But, what happens when your marriage evolves or changes?

But also like marriage, business partner "divorce" isn't easy. And the realization of its necessity something many owners grapple with.

I have a saying — "You either know the bad partner or you are the bad partner." Sure, sometimes partnerships are successful, but oftentimes I see the partners outgrow each other.

So how do you know when it's time to part ways with a business partner? It's all about communication and goals...

Scarlett says to look at how the person argues as an indicator of their communication. Are they articulate? Can they stand their ground intelligently? You don't need to agree all the time, but being able to disagree effectively is what makes a great partnership.

Rhyme and Reason was initially founded by three partners, but there came a time where one of them had different goals. That's when Scarlett realized there needed to be a shift in the agency's leadership. If a partner has career goals that don't align with yours and with the agency, it may be time to part ways.

Do you want to hire the right salespeople? Not sure what measures to take to set them up for success? Curious about the best way to compensate your sales team? Sales is a critical part of your agency's success. Sales drives conversions, captures clients, and helps relieve some major the burden from the owner. Hiring an amazing sales team and setting them up for success if the key to longterm agency growth.

In today's episode, we'll cover:

• #1 way to set up a successful agency sales team.
• 2 things every salesperson needs to do.
• How do you separate your services from a commodity?
• Should you pay based on commission or salary?

Today, I talked with Alex Chernyak, Director of Business Development at Martino Flynn, a digital agency in New York. Alex has over 15 years of sales and digital marketing experience, and he's owned his own agency, too. With a start in radio, Alex was drawn into the agency space by the allure of freedom. And, since then he's been helping agencies build killer sales teams and sales systems. Over the years, he's learned how to find, hire, and train salespeople that accelerate agency growth.

Are you thinking about hiring for sales? Hiring isn't easy. But, hiring sales is one of the trickiest in the agency space.

Sure, hiring for core values and culture is important. And, you should always have a vetting process in place to weed out poor applicants. But, that's only going to get the right person in the door. How do you set them up to win accounts?

The answer: agencies must have an existing sales system in place to facilitate sales success.

Salespeople aren't plug-and-play. And even if your sales hire has experience in another agency, there are nuances to every agency business that just can't be handed off. You can't give your new salesperson a phone and expect them to start setting appointments or landing deals. It doesn't matter how great of a salesperson they are or what agency they worked at before; they need support and an existing sales system.

Sales rockstars are built — not born.

1. Build a sales list. List out 200 - 300 prospects. These are the prospects your sales team is going to target with drip campaigns, paid content, etc. And, they should be constantly rotating this list based on interest. Here's a great tip from Alex — keep a separate list of your top 10 - 20 prospects. The sales team should have extra resources (e.g., audits, outreach support, etc.) for these prospects.

2. Find ways to communicate value. Your agency sales team can help you break free of being viewed as a commodity. Sales needs to diagnose problems, build rapport, and justify the price with value. Always sell solutions (not features) and talk value over cost... always!

Here's the hard truth. There are people who are offering the same services as your agency for a fraction of the price. Where some prospects are concerned, if price is all that matters, you already lost.

So, flip the script. It's not about price — it's about quantifying value. Sure, that web developer in another country can build a site for $500. But how good is it at converting leads? This is where your sales team comes into play. When a prospect starts talking price, change the subject to value. Here's an analogy:

A prospect comes to you and asks you to build a killer WordPress site. You quote them $25k. They come back the next day and say, "This freelancer overseas said he can do it for $2,000. Why should I pick you?"

If you've given your sales team the right playbook, this one should be easy... Why is it only $2,000? Can they build it as fast as you can? Do they have the level of experience you have? Do you offer a unique branding style that no one can mimic? Don't sell them a service. Sell them a key to unlock the treasure chest with solutions to their greatest challenge.

This isn't always easy! A lot of the work we do is invisible to clients. And an effective Account Manager can continue to communicate results so your agency is never viewed as a commodity. However, if you hired the right salesperson, they can communicate it with confidence and head it off early and communicate value before it becomes a question with the prospect.

In short - both!

Straight commission sales compensation isn't low-risk high-reward — it's low-risk low-reward. It leads to higher turnover. Plus, your salespeople don't have any incentives to be an evangelist for your brand. They don't care how good the prospect is or how well they fit with your culture. They need to make ends meet, so they can't afford to be selective with who they sell to and why.

On the flip side, straight salary is for marketers. Salespeople need incentives to go above and beyond in order to land the bigger, better clients. They are driven by the challenge of earning their commission and need you to dangle the carrot.

Salespeople should wear a marketers hat and a sales bandana. Give them a commission and a base-salary. I always suggest the base be something they can just barely live on. But the commission structure should help them live the lifestyle they choose. That's why a tiered commission approach works well. Ask your salesperson how much they want to earn for a year, and then help them develop a plan using your base salary + commission structure in order to earn that level.

Verblio is a content creation solution designed specifically for agencies. Their writers can help with everything from blog posts to ebook to video scripts and more.

Forget the hassle of finding and hiring your own writers. Verblio has a pool of more than 3,000 highly vetted writers who produce custom, SEO-rich content. You set the criteria for style and tone and they match you with writers that have expertise in your specific subject matter.

Verblio's platform is designed specifically for agencies -- and for a limited time, they are offering my audience 50% off your first month of content. My team is using Verblio and loving it, so make sure you check them out.

Not sure how to determine agency prices? How can you stay competitive while separating your agency the competition? The first step is to stop copying them! Quit focusing on the competition because it always results in you becoming a copycat agency. If you want to grow, you have to dare to be different.

In today's episode, we'll cover:

• The best way to determine your agency pricing structure.
• Why agency meetings may be costing you too much.
• How to separate your agency in a crowded market.

Today, I talked with Nick Eubanks, CEO and Founder of From the Future. Nick got his start by spamming cold emails and working real estate. But, once he started his agency, he grew fast! In just 5 years, Nick's agency was worth millions. He's sharing his story so you can grow quicker, and also avoid some of his mistakes.

Many agencies determine their pricing structure by looking at their competitors and matching or competitively pricing themselves in the market. Let's be honest — a lot of you probably started out by picking a fair-sounding price point. Am I right?

Price your agency's services intentionally. Sure, you can do what your competitors are doing. But, at that point, you've already lost. Instead, try this — price your services based on your value and desired margins.

The average net margin for a services company in the U.S. is 32% - so make that should be your goal.

To figure out how much you should charge clients, add up your agency expenses and labor expenses, then figure in the value of your services. Then charge clients at least 32% above the cost of your expenses. But, remember, you're selling a solution — not just a product. You can charge as high as 50% or more over margin and still attract clients.

Bear in mind, you need to factor in all of the miscellaneous business costs into this model. For example, have you ever considered how the expense associated with internal meetings?

Internal meetings are a great way to build company culture, create rapport among the team, and of course, brainstorm. But Nick says they're more expensive than we realize.

Let's say you have 4 team members attend an hour-long meeting. If you're billing their time at $200 an hour, that meeting is costing you $800.

Not only is that meeting costing you billable hours, but those four employees aren't directly servicing clients during that time. So, the meeting expense is actually more than you think.

The lesson here is not to cut out meetings - team meetings are a great way to keep your team working cohesively. But, you need to be aware of how much meetings cost. And, build those costs into your price structure.

Nick's agency started using technical SEO strategies combined with a design/UX team to stand out. But, it's about more than just services. Being unique requires some critical thinking.

What are your competitors doing? Whatever it is, think about doing the opposite. That's how to fast track your growth. For example, if everyone is approaching SEO the same way, add a twist and do technical SEO.

Look for opportunities in your niche. And, when you find one — latch onto it. Sure, you should definitely compete for clients. And, you don't have to just go after clients no one else is taking on. But, you should always be looking for under-serviced prospects within a market.

In other words, don't watch your competitors and just copy what they're doing. Figure out what they're doing and do something entirely different. Identify your strengths and what you do better than anyone else.

Verblio is a content creation solution designed specifically for agencies. Their writers can help with everything from blog posts to ebook to video scripts and more.

Forget the hassle of finding and hiring your own writers. Verblio has a pool of more than 3,000 highly vetted writers who produce custom, SEO-rich content. You set the criteria for style and tone and they match you with writers that have expertise in your specific subject matter.

Verblio's platform is designed specifically for agencies -- and for a limited time, they are offering my audience 50% off your first month of content. My team is using Verblio and loving it, so make sure you check them out.

Looking for an innovative way to inspire your team? One agency has broken the mold on bonuses and profit-sharing. Instead, they're inspiring their team with 50% of top-line revenue. If you want your already amazing team to be inspired enough to hustle harder, check out this incentive program that has an agency team out-earning the leadership team.

In this episode, we'll cover:

• 3 ways to identify bad clients.
• A unique and inspiring employee profit sharing model.

Today's podcast guest is Shaun Sheikh, CEO and Co-founder of Jump 450 Media. Shaun has been on Forbes 30 under 30 list, and his agency has blown up tot he tune of 8 figures in just a few years. Like most young agency owners, Shaun has introduced some creative strategies and innovative operations processes into his agency. Today, we talk about a few of those including an exciting employee compensation model that he calls his secret sauce of success.

Learning to say no to bad clients is one of the major pillars of agency growth. When you start out, you want (and need) to take what any and every client you can land. That's fine! You should be taking on all clients and discovering who your agency really is. Who you can help and who you can't. What you're good at and what you're not. What you love to do and what you don't. But, once you get established and learn the hard lessons, it's time to get really focused so you are only working with ideal clients that pay what you're worth.

So, where do you start? How do you figure out which clients are good and which ones you need to "swipe left"?

1. Start with culture.

Before you even think about cash, think about culture. If a prospect isn't a good fit with your agency's culture, you'll know. A good pre-qualification process is the key to identifying them. Remember, there's no such thing as a bad client ~ only a bad prospect or bad process. There's no strategy involved here. Trust me; you'll just know. Get rid of these prospects/clients ASAP. They're a terrible fit, and you will almost certainly run into issues with them in the future.

2. Analyze client spend.

Does the client's time-to-value ratio make sense? Some clients may be valued at big bucks, but they end up taking up too many agency resources. When agencies first start, naturally they want to land high ticket clients. A $50k client may seem like a dream-come-true. But, if you can service seven $10k clients with the same amount of effort, that $50k pain-in-the-a$$ client no longer makes sense, right?

3. Map out future potential.

This is the hidden client statistic no one ever talks about. What does their future potential look like as far as upsells, future campaigns? Is this client adapting to their changing environment? Are they innovating in their industry? Does their potential look as though it will support your goals? If not, then don't spin your wheels.

There are several schools of thought on employee profit share programs. And, I know a lot of agencies who swear by this type of monetary incentive. However, Shaun has a pretty interesting and unique profit sharing model you're going to love.

Jump 450 gives its agency employees 50% of the top-line revenue!

That seems like... a lot, right?

Here's the catch... Employees can only earn that incentive if they outperform their own salary. They have to hit their salary goals first. Then, they start earning additional revenue based on performance.

And, he does this on a monthly basis!

This bonus structure helps agency employees feel as though they co-run the company. They get involved with every client and try to outperform themselves. Some of Jump 450's employees out-earn the leadership team... Crazy, right?!

Keep in mind, to get qualify for the bonus the team has to perform like crazy. And, all of that extra performance means better profit margins profits for the agency. In reality, the team is getting 50% of the profit they hustle for. This is the above and beyond stuff they aren't expected to do. Late nights, next-level pitch prep, and after-hours client meetings, etc.

And, when the employees earn big, so does the agency. It's literally a WIN-WIN.

Will this work for every agency? Maybe not. But, if this kind of incentive program fits into your existing business model, it can be a great way to get to the next level.

Have you ever wondered how agency culture effects business growth? If you think they're two separate things, think again! Your culture speaks volumes about your agency. When your culture is a defining factor of your agency, you will experience amazing growth. Simply put, the foundation of every great brand is a great culture. So spend time developing an amazing culture and you will create brand ambassadors to move the needle on your agency's business.

In this episode, we'll cover:

• How it's important to niche horizontally or vertically.
• How agency culture develops brand ambassadors.
• #1 way to cultivate amazing agency culture.

Today, I talked with Brandy Obvinseva the co-founder of Gallant Culture. Brandy has a degree in international studies and intended to be a political ambassador. Instead, she helps companies find their brand ambassadors. After a stint at Texaco and a few other oil & gas companies, she co-founded her agency, Gallant. Since then, her agency has changed a few times but it's always been driven by culture. She has unique views on niching and culture that have helped her agency explode.

Selecting and marketing to a specific niche is a significant growth pillar for agencies. It gives you purpose, drive, and a defined process to use to score clients and drive profits. It just works.

But what is a niche?

Is it the industry you choose to work in? Is it the services you offer? Maybe. It can be. But, you don't have to niche vertically into an industry. You can niche horizontally based on a specific skill set or expertise in a specific technology.

If your agency helps plumbers build websites. Then plumber websites is your vertical niche.

If your agency helps anyone build a Joomla (software) websites using a specific set of processes, then Joomla websites is your horizontal niche.

Ready to have your mind blow? You can really drill down and have BOTH a horizontal and vertical niche.

Here's the secret — a niche is anything that helps you understand your clients better and motivates you to accomplish their goals effectively. Selecting a niche doesn't mean saying "no" to clients outside of your audience. It just means identifying with and understanding a specific audience, ultimately giving your agency an advantage over others.

Want to figure out your niche? Try this!

Write down three of your clients biggest challenges every day for 30 days. At the end, map out what their issues are. And, think about how you can pivot your agency to solve those problems. That's your niche! You could even have multiple niches but focus on building one niche at a time.

As Brandy says, "If you want to have a group of people that are going to wave your flag, they need to know what flag they're waiving."

Your culture is the unspoken rules of your agency. It impacts how your employees pitch to clients, communicate with them, and (most importantly) converts them. Always lead with culture, hire with culture, and even choose clients who are a good culture fit.

But, here's where it gets interesting...

Brandy says you don't have to specifically "define culture." It's naturally going to be interpreted uniquely by each team member. One of your employees may be perky and bubbly, while another may be methodical and quiet. That's fine! There's room both within the same agency culture.

For example, if one of your core values is honesty, both can find ways to allow honesty to shine through in their work. The important thing is that your culture drives them. They should be your brand ambassadors. To that end, they need to understand your culture and live it.

So, if you're still trying to find your niche, start with your culture. What kinds of clients fit your agency's culture? Which of your team members and clients can be your agency's brand ambassadors?

How do you nurture and grow your culture? By being adaptable.

Your agency culture will evolve and change over time. As your team gets bigger and new employees enter the scene things will change. The rules of your business will change too, and you'll probably pivot a couple of times along the way. That's normal and completely natural as part of the growth process. But, you have to be willing to constantly develop and improve upon your culture as the agency environment changes.

Let your team members, clients, and industry guide you. In the beginning, a minimalist culture which promotes enthusiasm and hustling may work out great. But, 5 years down the road could be another story. You will have new clients and employees who are going in another direction.

The culture of today will not match the culture of the future ~ adaptability is a must.

Considering buying or selling your digital agency? Acquiring another agency is an excellent growth strategy and it's might be easier and less expensive than you might think. An acquisition can help improve profit margins, expand your client base, and inherit a skilled team while eliminating the competition. An agency acquisition is worth exploring if you're interested in rapid growth.

In this episode, we'll cover:

• Do you need to be a big agency in order to buy one?
• Do you need a lot of cash to buy another agency?
• How to structure an agency acquisition.
• The 4 criteria of a good agency to acquire.

Today's podcast guest is Brook Schaaf, co-founder, and CEO of FMTC, an agency dedicated to helping advertisers and merchants develop discount and affiliate program with curated data and management. Prior to going the entrepreneur route, Brook got his start at Zappos where he developed his passion for affiliate marketing. Since then, he started his own firm and is on the fast track to major growing by acquiring other agencies and/or their books of business.

Nope! At the time he acquired his first agency, Brook's firm had just 10 remote employees. The first agency he bought was PartnerCentric, which was of equal size to his agency. The existing owner was burnout and looking for an exit strategy. He said the process was long (it took two years!) and sometimes frustrating, but totally worth it in the end.

Nope! According to Brook, an agency is generally worth 50% of its topline revenue excluding media revenue (since that can fluctuate). The problem is most sellers want to build retirement cash into negotiations and therefore expects to get more than it's worth.

However, once you reach an agreement on the valuation you don't need all that in upfront cash.

How do you know what your agency actually worth? My formula differs from Brooks somewhat because I factor in a multiple of EBITDA. You can check out my valuation chart here. But it all boils down to this…

Your agency's value is the amount your willing to sell and which a buyer is willing to buy.

But you don't need to have a ton of cash laying around in order to buy an agency. Standard funding includes a cash downpayment of between 10-20% with the remainder delivered in one of four ways:

1. Cash upfront (which is difficult for most people).
2. SBA Loan from a bank (which involves a lot of paperwork and hoops to jump through).
3. Third-party funding (which may involve giving away equity).
4. Seller-held note that is payable over a few years.

Brook's acquisition was funded with a cash downpayment and a seller-held note payable over the course of two years. It's risky for both parties, but it's the best way to move forward without needing anyone else's permission.

Advice from both of us who have bought and sold agencies -- involve lawyers in as little as possible. The bulk of negotiations can be done without racking up attorney's fees.

Determine whether it's an asset sale or equity/stock sale.

• An asset purchase is buying the agency's book of business, including client contracts, trade name, payables, and receivables.
• An equity/stock sale is buying out the owner(s) interest in the business.

Brook says an asset sale is much clearer and easier to manage. It also creates a cleaner exit strategy for the seller so he/she can move on.

1- Readiness. The seller needs to be genuinely ready to sell. A lot of times people put feelers out and then hesitate when it gets real. If you sense any mixed feelings, walk away.

2- Culture. Remember, in most cases, you're inheriting a team too. (There will be technical stuff about firing and immediately rehiring them, but most sellers will want to make sure their team is taken care of.) So make sure their team's vibe will gel with yours. After having acquired multiple agencies, Brooks says the team is typically thrilled for the new vibrancy.

3- Numbers. How stable is this agency? How profitable are their accounts? It should go without saying, but you need to make sure they're running healthy books.

4- Skillset. Are you confident that the acquired agency and its team can work the way your existing agency works? If you're acquiring an agency to expand your foothold in the market then skillset is key. If you're buying to add a service then it's less important that they match your agency's skill set instead you want theirs to compliment yours.

Considering selling or buying an agency? Check out more details about the process here.

Do you feel like your agency is stuck with subpar employees? Think maybe you have all the wrong people but too afraid to clean house? Firing employees is never easy. But, underperforming or toxic team members will kill your agency's growth. Check out the story of how one agency fired his entire team twice, the aftermath of the experience, and what learned by rebuilding.

In today's episode, we'll cover:

• Why your agency needs a financial model.
• Creating a culture of personal ownership.
• 2 mistakes that led to firing all employees.

Today, I talked with Aaron Edwards, co-founder of The Charles NYC. Aaron quit his job, moved from London to NYC, and created a digital marketing agency. Since then, Aaron's agency has grown into a multi-million dollar phenomenon. Success didn't come without hard work and many lessons along the way. In fact, he's had to fire ALL his employees twice. Talk about "cleaning house." Aaron shares some great growth tips, including how to inspire culture, and which two mistakes led him to fire his entire team.

Aaron worked in finance before he started his agency. And, his biggest financial tip is this — have a financial model. This means pulling out spreadsheets and diving into some math (which is something us creatives aren't usually in to). But, having a financial model can save you a ton of time and headaches in the long run.

Here's a great way to get started. Think about the revenue goal you want to reach. Then, work the math backward to figure out how to get there. And, use those insights to create the right financial model. In most cases, you either need more clients or you need to charge more.

You also need to figure out how to build up cash reserves to make it through some lean times (think 3 - 6 months of salaries and expenses). Plus, you should obtain a line of credit for the small emergencies. Ideally, secure the line of credit when you don't need it, so it's already available for when you do! And, cut your margins down as slim as possible. Remember, putting profit first can growth hack your agency.

Want to know what kills agency culture faster than anything? Egos!

If your employees are taking failures too personally — they won't last long. Every agency has failures, but the difference is how you recover from them. Teach your team to treat failures as learning opportunities. Every employee has to be able to take ownership within their role without worrying that a mistake or misstep will threaten their credibility.

To achieve this, you need an open culture. Employees should be able to talk to their leadership team about bad experiences. And, agency management should offer coaching/mentorship sessions to help fix issues. Don't let failures drag an individual or entire team down. Create an open culture where mistakes and failures are embraced.

Aaron had to fire his entire team twice and rebuild the agency. Looking back, he says two big mistakes led to the massive house-cleaning:

1. Not providing enough opportunity. You have to give your employees the opportunity to grow and communicate what that growth looks like. This means providing a clear roadmap to success at every step. It's not enough to tell them they can advance within the agency — they need to see it what that looks like. Aaron says his mistake was not providing showing his employees how to grow within the agency. When you don't do this, the good ones look for opportunities elsewhere. Or worse; productivity decreases as they get complacent.

2. Not hiring for culture. You can teach someone skills; you can't teach them culture. Always think about how a new hire is going to fit into your company. If you don't, you may end up with a mishmash of different personalities and a bunch of cliques. If you see one of your employees isn't participating and they don't seem like a good fit, its ok to get rid of them. One bad apple spoils the bunch. And, when your entire team has a poor culture, firing them all may be your only option.

Not sure how to find and hire the right digital agency talent to help you grow? Here's the 8-steps one agency owner uses to build his business. He is also diving into reasons why niching down has was a good decision and the most important focus of agency sales pitches.

• 3 reasons your agency must niche down.
• The only kind of profit that matters.
• 8 steps to hiring culture-fit digital agency talent.

Today, I talked with Chris Martinez Co-founder of DUDE! — an agency that provides unlimited web designing for other agencies. Chris has been through the ropes as an agency owner. And he's worked hard to figure out how to nail pitches, niche down, and hire that perfect prospect. Plus, he wears a wrestling mask sometimes. What's not to love?

Chris said the single best decision he made in order to help his agency grow was to select a niche. And if you haven't yet, you need to niche down, too! Here are 3 reasons:

1. Clients will come to you. Niching down accelerates word-of-mouth. Now, I don't want you to rely on referrals to grow your business but when you are able to generate a buzz as a specialist within an industry or a specific skill set that establishes authority in your niche.
2. You don't have to re-invent the wheel. If you're taking on any and every client, it can be tough to build processes. When you choose a niche, you know exactly what you have to do. You can build simple, effective systems and processes to become efficient.
3. Targeting clients is easier. Building a buyer's persona gets 100x easier when you identify a niche. You know exactly who you're going after, where they're at, and how to speak their language.

Related: How Your Agency Can Pick a Niche and Dominate It

Besides, your clients really only are about 2 things:

1. What do you do better than your competitors?
2. What results can you give them?

That's it! So why not start thinking high-level. Be specific in who you serve and create processes that give you an edge over your competitors. Use your successes and case stories to win even more business in the same category.

Everyone wants the big clients, right? But bigger clients aren't the key driver to agency growth. It's profitability. For example, when your first big client comes in with a $50k contract, you're going to want to say YES! But, how much of that $50k is really hitting your bottom line?

You might be a 7-figure agency but if your margins are single digits then gross revenue doesn't mean squat. Conversely, you might be a $300,000 agency who's really learned how to tighten your belt and coming home with 40% profit, then you're doing really well for yourself.

If your bottom line isn't where it should be, you need to pivot. Carve out your niche, determine where your expenses have gone askew, and then go lean and/or raise your prices. Do whatever it takes to put you where you want to be. Sure, you may be taking some losses when you first startup. But, if your agency is established and you're margins aren't at 30% or better, it's time to change courses.

And that change may start with learning how to say NO!

Hiring someone who has the skill set to do a job is easy. Hiring someone who wants to do a job in the environment and with the team you've created can be a bit tougher. Chris says to hire people for their culture-fit, not their technical-fit. You can teach someone a skillset but you can't make them change who they are.

Chris has an amazing culture-first hiring process inspired by the way they do things at Zappos.com.

Here's his agency's 8-step hiring process

1. Post the position publicly. (Obviously.)
2. Identify candidates' soft skills and hard skills from their resume and application. Chris always puts more value on soft skills. You want to see who a person is — not just what they can do.
3. Send the best candidates a questionnaire. You can find out a lot more than just their answers to the questions... like, how fast do they respond? Do they pay attention to details? Can they meet the deadline? Do they follow direction? Are they going above and beyond expectations? If you ask them to send you 5 examples, did they only send 4?
4. Schedule a phone interview. Talking to someone can help weed out applicants early. Are they polite or rude? Authentic or fake? Aggressive or grumpy?
5. Send a technical skills test. Do they actually have the basic skill set they're hiring for?
6. Send a psychometric test. This helps you figure out who they really are deep down. These aren't perfect, but they can help you get rid of a bad fit fairly early on.
7. Schedule an in-person interview. Chris has a round-robin interview style with 4 - 5 people. Each person talks to the potential hire. Then, they meet afterward and see if all parties are in agreement for hiring them. They ask each other: "Would you work with them?" and "Would you work for this person?" Everyone must answer in the affirmative or they pass on the candidate.
8. Give the candidate a final job-related task. Make sure they know how to perform and can do so on deadline. For Chris's agency this is particularly important because they're hiring developers and designers.

Curious how to stand out and win more clients in the crowded agency space? Wondering how the big agencies got so big? For starters, stop being a "me too" agency trying to do what everyone else is doing. Stop trying to be what everyone is... you do you. We are always working on our weaknesses, instead of focusing on our strengths. Instead, we should focus on our strengths, leverage the weaknesses, and be a little bit of a freak in order to stand out.

In today's episode, we'll cover:

• Why your agency needs to be a reflection of you.
• What is your agency's freak factor?
• 3 reasons you should embrace your weaknesses.

Today, I talked with David Rendall — professional speaker, author, entrepreneur, and freak-enthusiast. David is incredibly passionate about the big-picture agency stuff. He shares what he calls the Freak Factor and his recipe for entrepreneurial success. This week alone David has traveled around the globe -- Dublin, Paris, London, and Egypt talking to businesses and entrepreneurs about one thing -- winning through uniqueness.

As digital agency owners, we're prone to looking around for the best way to do things. It's part of our DNA. We like to be on top of the latest technologies and hottest trends in digital. But, when it comes to your agency's culture, outside is the last place you need to look.

David says your agency needs to be a reflection of who you are. We throw the word "culture" around a lot but, culture isn't a hidden mystery; it just takes a solid look in the mirror. Virgin Mobile started off zany because Richard Branson is definitely zany! Walmart is all about logistics, inventory, and pricing — it's super practical because Sam Walton was super practical.

Leverage your personality traits to create an agency you would want to work at and that alone will attract the right people. The culture will practically create itself once the vision and tone is set by you.

Don't just create another "cool agency" — create something that helps you surround yourself with a like-minded team who will be an asset is carrying out your vision.

Too many agency owners want to be like the big kids. They think they need to copy the big agencies in order to be as successful as one.

Listen, Snapchat didn't just create a mirror copy of Instagram. They decided to do something new. Instagram is for showcasing images, so Snapchat took a different angle and made those images disappear. If the crowd is going one direction don't follow them. You'll find more success if you let them lead you toward your own, unique solution.

David's advice is to find the gap in the market and then attack it. Don't just offer another solution like everyone else. Put your own twist on it, and offer a unique strategy for getting your clients the results they desire.

If you walk away from this podcast with one lesson, it should be this: work on your strengths, not your weaknesses.

1. Fixing your weaknesses may destroy your strengths. It's true! David likes to use the Walmart and Target analogy. Walmart is known for cheap prices and crappy service. Target has great service and a little higher pricing. If Walmart improves its customer service with added training and increased employee pay, it cuts into their margins and costs go up. Ditto for Target. They both eliminate their strength if they focus on improving their weakness.
2. Your weaknesses might be your strengths. Is your agency small? That's not a weakness! That's a poorly positioned strength. You're not small; you're personal, nimble and agile. You can tell clients, "Yes, we're small and that means you can talk directly to me and won't get lost or forgotten." Think about your weak points and figure out how to leverage them as strong points.
3. Strengths can get even stronger. Even if you can't find a way to turn your weaknesses into strengths, don't worry - you don't need to. Disregard your weaknesses and instead, focus on improving the things you're great at. Hone your craft and be the best damn {fill in the blank} the market has ever seen.

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