Scaling Our Agency from 1 to 25 FTEs, 100% Remotely

I spent my entire career in sales / business development at early stage startups before deciding to reskill in marketing. I learn by doing, so I joined a marketing agency to run sales and business development.

The agency I joined was about a year old, had three partners, and had generated $170,000 since inception. My work would drive a 325% increase in revenue to $525,000 in the following 12 months immediately after joining.

The decisions I made during those first 12 months would go on to prevent us from scaling the business any further.

To be honest, I think the secret of growing a fast-growing agency is: start two.

The second agency has been a million times easier because I can avoid all the mistakes I made the first time.

Here is what I did the second time around. This framework will work for any professional services firm, whether you’re a Shopify agency or a machine learning dev shop.

1. Build your brand before you begin
2. Build internal case studies
3. Consistently create great outcomes
4. Say no to short-term revenue
5. Ladder up as quick as possible
6. Document everything
7. Hire and develop a strong team
8. Generate profit
9. Blow it up if it doesn’t work

Build your personal brand before you start

I generated $100,000 in consulting fees before launching a website.

If you don’t have a brand and don’t have an audience filled with qualified people that trust you enough to hire you, you start at the bottom.

And this is where most consultants and agency founders start: small, local service and retail businesses with unambitious goals and under $1,000/month budgets.

One of the most important things you can do to grow fast is to build an audience of people who would give you a lot of money if they knew you were available to give the money to.

The difference in value between starting your agency with a brand and without a brand is the difference between minimum wage and meeting your financial goals out of the gate.

One of my favorite examples is Steve Toth from SEONotebook.com

1. He built a large audience of people who can give him lots of money
2. He built trust and relationships with that audience at scale through content creation on LinkedIn, Facebook, and email
3. He did this while still at his job
4. Steve left is job after executing on a humongous SEO campaign for his former employer
5. And his former employer is a widely known digital brand

I didn’t hit the ground as fast as Steve, but I executed the same playbook on a smaller scale.

1. I spent a year or two developing an audience that trusted me and could hire me before I left my job at the agency
2. I created a pretty great outcome in my former role, 0 to 103,000 organics/month before I began consulting
3. I knew that 0 to 100k organics/month once is a data point, and twice is a trend. So I built the kind of projects I wanted to consult on for myself and grew Doggypedia from 0 to 116,000 organics/month in 13 months.

And it worked.

An early client wired me $5,000 within 24 hours of DMing on Facebook for the first time.

Even though I didn’t know him, he knew me.

And over the course of 18 months, I would go on to collect $90,000 in consulting fees from this client while growing them from 0 to 50,000 organics/month.

There is a lot to say about building an audience on LinkedIn and Facebook, but it comes down to:

• Connecting with 20–50 people in your target audience each day
• Posting engaging content 3–5x/week
• Spending 30 minutes per day engaging with your audience through likes, comments, shares, and DMs

Launch with a great brand, and you’ll skip years of grinding, hustling, and laddering up and away from small businesses.

Launch without a brand, and be prepared to spend several years grinding upwards towards bigger budgets.

Build the project you want to consult on, for yourself

I had left my agency job after growing their blog from 0 to 103,000 organics/month.

One time is a data point.

Twice is a trend.

Growing Doggypedia from 0 to 116,000 organics/month was cited as the reason DoNotPay chose us to run their SEO campaign.

And the campaign with DoNotPay would become the best SEO project on the internet in 2020.

Momentum creates momentum.

Ladder up as quick as possible

I believe that most small agency founders are not meeting their financial goals.

Regardless of where you’re starting your journey from, there are probably more lucrative deals than what you currently have. You need to move from where you are to where you want to go as quickly as possible.

This is especially true if you’re currently working with small businesses and solopreneurs. It’s a lot easier to service and make a profit on five clients at $10,000/month than it is fifty clients at $1,000/month. If you’re reading this and currently pursuing route #2, stop right now.

The easiest way to move up-market as fast as possible to create great outcomes.

But it’s not enough to do it once. You need to create great outcomes again, and again, and again.

Every project you take needs to lead a case study that will help you close opportunities twice as big in 12–18 months.

The momentum of consistently doing great work will make everything in your life easier.

If you can’t create great outcomes consistently, the next best option is to fail.

And fail fast.

I’ve seen too many early-stage agencies and consultants spend years making poverty-level wages because they never ladder up.

If you’re not earning, and you’re not learning, the next best thing is failing.

Failing allows you to move on, get a job, start earning and learning again, and sets you on a path towards trying again when you have a bigger bankroll, a more robust skill set, and a better network.

Say no to short-term revenue

One of the easiest ways to never move upmarket and hit your financial goals is taking on short-term revenue.

Short-term revenue is anything that doesn’t get you 2x bigger projects of the thing that you can deliver consistently.

That means if you’re an SEO agency, don’t take on website projects unless you want to build a website agency.

Because you don’t have any repeatable processes around building websites, your margins will be smaller, the work requires more leadership team involvement, and the risk of failure is higher.

And even if the short-term revenue project is successful, you’re building momentum in the wrong direction.

You’re an SEO agency. You don’t want to build websites. You did a great job at something you don’t want to do more of.

Not great!

More examples:

• A machine learning dev shop building a SaaS landing page
• An SEO agency doing Facebook ads
• A business lawyer doing family law
• A local CPA taking on a client with international business assets

Don’t do it because they asked you to.

Don’t do it because you need a few thousand bucks.

Don’t do it to build the relationship.

Don’t do it.

Document everything

Early-stage agency owners are busy. They’re hustling for business, meeting with clients, putting out fires, delivering work, trudging through bookkeeping, throwing together contracts, and a million other things.

Most will get stuck on the hamster wheel of working in the system versus building the system.

And if you’re growing without documentation, and it hasn’t caught up to you yet, it will.

Probably somewhere between $30,000 – $80,000 per month.

Once a lack of documentation catches up to you, you’ll begin to see growth flatten or even reverse because as you close one new deal, another client churns out due to inconsistent value creation and value delivery.

And at this point, creating the documentation is a lot harder than when you were smaller.

1. There are so many projects and so many edge cases to document
2. Your team is already spread too thin and is dealing with fires everywhere
3. The documentation you produce isn’t effective because you haven’t built this organizational culture and skillset
4. You’re stressed dealing with decreasing revenue, decreasing margins, and trying to retain the team you built
5. The loss of revenue growth has exposed all the problems in your business at once

At ContentDistribution, I began documenting everything after our first team member joined the company.

If you want to continue to grow, you need to enable people without your skill set and experiences to create outcomes that are as good or better than you could make yourself.

Working closely together and taking lots of meetings works when the team is a few senior-level folks.

Lead by example, create the first 10-50 pieces of documentation. Document how to create documentation. Then begin holding your team accountable for making great documentation too.

Today we have over 350+ pages of documentation across our organization contributed by dozens of team members.

Building a strong team

What’s the secret to building a strong team?

Reviewing more qualified candidates.

In 2020 we spent 50+ hours building hiring systems that enabled us to evaluate over 1,000 candidates in 2020. This investment allowed us to:

• Cast a massive net across the internet to bring in a diverse set of candidates
• Quickly identify qualified candidates
• Send and evaluate work sample tests
• Schedule video interviews
• Send offers and onboard new hires

In the beginning, when it’s just you, and you need to bring on more hands, lean on part-time freelancers and consultants before you hire full-time team members.

The more freelancers and consultants you work with, the better you will understand your agency’s needs and who might be a great fit to interview for a full-time role.

It will be more expensive, but the rapid iteration that working with multiple freelancers will bring is worth it.

I started working with Gordana as a freelance writer.

When I was ready to hire an editor, I interviewed all the writers that I had worked with recently.

Today Gordana is our Director of Operations, running our content team of 25 people.

Connect with Gordana on LinkedIn, Twitter and Facebook

And 80% of managers in our organization have been filled by people who were promoted from our most entry-level role — content writing.

Because of our focus on processes and systems, we can hire great content writers without any SEO experience and have them create great SEO outcomes.

After being a talented writer, the next most important variables are passion and consistency.

These also happen to be traits that we’ve found very hard to screen for in interviews.

Every single person we have promoted from within has gone on to absolutely crush their new role. Their raw talent, passion, and consistency allow them to learn anything and completely overcome any lack of experience.

This has worked really well

• 9 team members have been promoted at least one time
• 4 team members have been promoted at least two times
• 1 team member has been promoted at least four times

At approximately 15 – 20 team members, our organization began to require skill sets that we could not fulfill with internal promotions and began hiring externally.

1. Director of SEO
2. People Ops Manager
3. Growth Marketing Manager

Generate profit

In a service-based business, revenue is a false prophet.

Profit is the one true prophet.

Cash is coming in and out, you don’t have a framework for modeling and forecasting costs, accounting is the worst part about being an entrepreneur, and the pain of running an unprofitable business isn’t visible yet.

All you know is that everyone is under-compensated, overworked, there isn’t enough cash flow to hire the number of people you need to handle the existing workload, and you definitely don’t have the capacity to take on new clients.

Service businesses cannot scale their way out of bad margins. If your margins are bad today, scaling up will only make them worse. As you grow your client base and team, you’ll need to spend more money on managers, administration, and non-billable hours to manage your increased team size.

It does not work.

Here are the 3 most common reasons:

1. You tried to scale on small clients
2. Too much of your team’s time is spent on organizing work instead of delivering value and billable hours due to a lack of processes
3. You did not forecast or model a cost correctly: per unit, hiring, training, PTO, raises, software, administrative, etc

Blowing up your agency and starting over

If your margins are bad today:

1. Fire your lowest paying, least ambitious clients
2. Lay off staff
3. Rebuild on better clients

It’s going to be painful to lose the staff you want to keep. And it’s going to hurt your ego to admit to your business peers and mentors you went through a layoff.

But the alternative is way, way worse.

The alternative is trying to save face and fix your margins without terminating clients or laying off staff. This seems viable, but it’s not.

You will make short-term decisions to meet payroll at the expense of long-term actions that lead to a healthy business. You will limp along month after month in an organization where everyone is overworked and under-compensated.

It does not get better.

Final thoughts

Nailing the agency opens up a lot of doors.

We used the cash flow and the brand/audience we developed for the agency to launch a B2B SEO SaaS we’ve grown from $0 to $135k in 135 days.

In 2020 our agency grew from 1 to 25 FTEs. In 2021 we might hit 75.

None of us have ever done this before.

And we’re figuring it out in public.

1. Join our Remote Operations community
2. Follow Nick on Twitter
3. Follow Nick and Gordana on Facebook
4. Connect with Nick and Gordana on LinkedIn