Most micro-agency owners come from a practitioner background; we’re very adept at our chosen service, and as such, we start to wonder why we are working so hard to make someone else’s business money…!

That often leads to a period of freelancing which gives us a taste for running our own (pseudo) business. And as workload increases, we realise that we need more support to keep up with demand, and hey presto, a micro-agency emerges.

Here at And Then The World, we represent the typical agency owner’s journey like this:

So when you’re finding it tough to deal with all of the challenges that your new(ish) agency owner role throws at you, it’s principally because you’re still somewhere in the transition between Specialist Practitioner & Generalist Agency Owner. 

So firstly, be kind to yourself; it likely took you years to develop your practitioner skills, and building your agency owner skills will likely take years too.

Accept that it is a journey, educate yourself wherever you can, and take advice (formal or informal) from those who have made 10x the number of mistakes that you have.

People are the great variable in any business. 

This is multiplied if it is a service business, where your people are your business.

And multiplied even further with a micro-agency with so few people that each one is percentagely very important!

Some micro-agency owners have run small teams in their salaried roles, but this does little to prepare us for what it’s like to manage people when we are the ultimate power in the business. In salaried roles, there are (usually!) existing guidelines & processes for how people management is done, plus structures for appraisals, pay increases, grievance reporting; the list goes on.

But in our own businesses, we have to start those from scratch. And unlike in salaried roles where you had the fall back of sorry, the company policy doesn’t allow for that, you don’t have that defence in your own business where each & every team member knows that you can do anything.

So set out basic rules early, and work towards having proper processes, particularly for salaries & progression, as soon as is practical. We’ve helped many of our micro-agency clients to create career progression plans for their teams, with all of the interconnected elements that come with that, so if we can help, let us know.

Many micro-agency owners started their businesses because they wanted more control. And particularly over the quality of work. This comes from the strength of our practitioner skills, and is a perfectly natural desire.

Where it becomes a challenge however is when the control of those high standards manifests itself in reviewing every single piece of client work before it goes out of the door. And often heavily editing it too!

This then becomes a blocker on your agency’s growth; as you may recall from [insert previous blog], your agency’s Growth is the result of the Time & Money you have available to invest in it, and this method of quality control is an enormous time-suck.

So what to do? When quality is non-negotiable (and it should be!), the variable to work on is How is quality achieved? And this comes down to process.

All of the principles you apply in reviewing & editing the work of your team need to be documented so that they can apply the same critique you would, without your direct involvement.

Alongside the documentation of process, there are also a couple of mindset shifts that we as owners need to make:

1. Your first few employees are unlikely to be as skilled a practitioner as you are

This may come in time, but as a basic rule, micro-agencies do not have the resources initially to afford super-experienced team members. This means accepting that if their work is 80-90% as good as yours would be, that is still very high-quality work.

2. You cannot expect your team to make the same decision as you more than 9 times out of 10

Even with all the documented processes in the world, it is unrealistic to expect your teams to be exactly what you would do every time. 9 out of 10 is the best you are likely to get, plus that 1 in 10 that they do differently to you might actually be an improvement! As owners, we do not hold the monopoly on good ideas.

We’ve probably met 100+ micro-agency owners over the years, and one thing that is almost universal is that they are good people. And by that we mean they have strong morals on what is right & wrong, and they genuinely want their team members to be happy.

This is both a phenomenal strength & a potential weakness.

It allows us to bring our people together in pursuit of a common goal very effectively, and allows us to retain team members for longer as if nothing else, we create enjoyable working environments. People treat each other with respect & invariably do what is the right thing morally, even if it isn’t the best “business” decision.

For all this positivity however, there can be a major downside to the outwardly-harmonious agency. Namely, the challenges that the business faces are not called out for fear of breaking that harmony, and therefore are never honestly discussed or resolved.

So whilst businesses are not democracies, the desire for harmony needs to be matched with a recognition of the need for genuine debate.

To foster this, you will almost certainly need to be as open as possible about the inner workings of the business & be willing to engage in debate, both team-wide & individually, about future plans.

All business cultures flow from the top, and so as the person at the top of your agency, you will need to set the example for your team members to follow.

Set an open forum for questions in team meetings, answer any questions as openly & honestly as you can & applaud those who put themselves out there to question you.

In addition, proactively share information with the team at regular intervals on things they may not otherwise know about (new leads, sales discussions, progress vs. targets, for example) to demonstrate that openness is something you, and therefore the business, values.

And when contrary opinions emerge, hear them out. You do not have to agree (repeat, it is not a democracy!), but if you decide not to take their counsel & the outcome isn’t what you want, be the first to hold your hands up & admit your mistake.

Teams that engage in constructive confrontation together are teams that invariably succeed together.

If you want more on this subject, take a look at The Five Dysfunctions of a Team by Patrick M. Lencioni - his command of this side of things far outweighs ours :)

Last, but certainly not least, as first-time micro-agency owners we are not seasoned financial experts. And most of the time, we’re woefully ill-equipped for that role.

Very few of us come into the job with previous experience of managing budgets from our salaried roles, and even if we do, there was likely a finance team behind us making sure that we didn’t mess anything up too badly; that safety net is gone.

When I started my agency, Stacey (as a seasoned financial professional) helped me to get that side of things in order - without her, I would’ve been all at sea. And it wasn’t until I started spending more time with other micro-agency owners that I realised what an enormous benefit that was.

Almost every micro-agency has an accountant and / or bookkeeper, but for the most part, these professions focus solely on what has happened; a few may offer some guidance on planning for the future, but since we micro-agencies tend to be small (and therefore relatively unimportant) clients to them, we just aren’t likely to get the full service anyway. Sad perhaps, but true.

With that in mind, it rests with you as the agency owner to learn & develop these skills to help your agency grow. No-one will know the ins & outs of your business quite like you anyway, and the stronger your skills in this area, the less likely you are to run into difficulties financially.

Financial planning & management is of course a sizeable topic in itself, but if you want to kickstart your education, consider these steps:

1. Know what your agency costs to run each month - as a bare minimum, you’ll know what volume of work needs to come through the door

2. Find ways of measuring the three types of money; revenue, profit & cash. Your accountancy software can probably help with the first two, but a dedicated cashflow-forecasting tool is almost certainly needed to accurately handle the latter. Remember that all businesses live & die by the cash that they have - run out of cash, and it’s game over.

3. Set up a basic forecast for the next year with indicative values for revenue & costs, giving you an idea of profit. Use existing revenue run-rates to help you estimate what’s coming in plus existing costs to identify what’s going out. And if you know you’re likely to need to hire in order to support higher sales, don’t forget to estimate those additional costs alongside that revenue increase.

And if you need a template to help you here, let us know & we’ll happily share ours with you.

Running any business is hard. But the factors that drive us to become independent micro-agency owners can make it even more difficult for us to run this type of business.

And if you recognise any of these challenges in your own agency right now, that’s a good sign, remembering that at the start of every solution is the recognition of the problem :)