Why Culture and Cash Flow are Crucial for Agency Growth
Think skillsets are all that matter? Need help building a team aligned around your mission? Skills and experience are important, but it's your culture that will really make or break your agency. It's that culture and your attention to healthy cash flow that can make or break your agency's growth.
In this episode we'll cover:
- Why your digital agency's culture is so important.
- What to consider when hiring new team members.
- How to create a healthy cash flow for your digital agency.
Today I had the chance to talk with Jim Flint of Local Search Group, a Houston-based marketing agency in the automotive industry. Jim began his career working with agencies from the corporate side at brands like Nike and Toyota, before ultimately deciding he wanted to help clients through an agency of his own. He shared what he's learned along the way so you can create a successful agency culture and increase your cash flow.
Why Your Digital Agency's Culture is So Important
Before Jim realized the value of culture, he was hiring smart and capable people who weren't necessarily aligned with him in important areas. This created challenges within his agency, and he quickly learned the importance of building a team of people who are on the same page and headed in the same direction.
"It's not about the company and the person—it's about the company and the person and the client and the job," Jim says. If the fit doesn't go both ways, and if an employee isn't passionate about the purpose of the agency, you'll end up holding each other back.
Poor fits can lead to toxicity, which can take longer to undo than it takes to start. When toxicity takes hold at a company, the good employees will end up leaving, making it even harder to turn the ship around.
What to Consider When Hiring Agency Talent
Creating culture starts with your team, and your team starts with the hiring process. Instead of only looking at a resume, try to learn who the candidate is as a person. Learn what they do outside of work and get a sense of where they are in life. Does it align with where your agency is headed?
Another consideration is whether a candidate has a side-hustle. Side-hustles used to be considered a red flag. However, Jim views them as indicators of ambition and initiative. They also tell you what a candidate is truly passionate about—and, if it's an area related to your marketing agency, it's a good sign they may be a great fit.
How to Create a Healthy Cash Flow
While culture may be the more overlooked aspect of agency success, it's not the only piece of the puzzle. Another important component of digital agency growth? Capital.
Your cash flow is the lifeblood of your agency, and when it's running low your forward momentum can grind to a halt. What are a few ways to boost your agency's cash flow?
- Change payment terms, so clients pay you pre-month instead of post-month.
- Beware of "scope creep" on your deliverables.
- Make sure you're charging enough for what you're providing.
- Be diligent about getting paid on time.
Another way to benefit your cash flow is to get rid of the high-maintenance clients. They cost you more than you know — and beware of bringing on those clients from the outset. "A high-maintenance skinny deal is a really poor vanity play," Jim says, "and it hurts the company in ways you don't really understand until you come to actually experience it."
By cutting those clients loose, you'll free up your resources for more of the clients that are actually helping your agency turn a profit.
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