For some creatives, starting their own agency is a dream come true. It’s also one that comes with the massive burdens of entrepreneurship, pouring your blood, sweat, and tears into your passions, and often coming up with some pretty empty pockets for a couple of years.
It’s likely that you knew this before you started. But that doesn’t mean you have to just accept that you’ll leak money for a while. Here are four simple tips to improve your agency’s cash flow by avoiding these costly mistakes that creative agencies make.
Trying to be Everything to Everyone
While it’s important to have a future-focused approach to agency growth, many small agencies make the mistake of trying to juggle every creative task for every industry out there. Without the skills and manpower necessary to back this kind of approach, smaller agencies can end up watering down their service offerings, rather than focusing on excelling at a few specific services or industries.
If you want to differentiate yourself in a sea of creative agencies, find something you’re good at, and become one of the best. Once you’re blowing clients’ minds with your skill, you can start to flex other muscles. It can be incredibly hard to say “no” to client work when you’re just getting your agency off the ground, but honesty about your capacity and capabilities will have better results than taking on more than you can chew.
Undervaluing Your Rates
Particularly for agencies in their early stages of growth, you may find there are times where you’re tempted to reduce agency rates in order to gain new clients. Undervaluing your agency’s work is harmful in the long term because you’re setting a new relationship off by saying you aren’t worth the work you perform.
Work on honing your value-based pricing strategies and really work to improve your budgeting strategies so that you aren’t undervaluing or running over budget. A skilled project manager armed with a robust creative agency project management software like Function Point can build pricing strategies that help you grow.
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Not Tracking Time
Strong time tracking starts at the top of the company. It’s all too common to meet creative agency leaders who can’t get their creative team to track time but are not accurately tracking themselves. You know you were in the office for 9 hours, but how was this time allocated? It’s time for agency leaders to set the tone for the rest of the group by accurately tracking time.
Inaccurate time tracking is one of the biggest villains your project managers will face when trying to budget projects. Looking for tips to encourage your creatives to track time more frequently? Check out our recommendations.
Not Managing Your Clients from the Start
Your client relationship begins during your first conversation, whether or not you end up signing with them. The communications you have with them set the tone for the rest of your relationship, from onboarding through to payment. Managing client expectations and setting up a mutually respectful relationship from the start is far easier than trying to transform an unhealthy client relationship later on down the road.
Looking to improve client relationships? Read our 9 tips to hone your account management skills from client onboarding through to project completion.
Natasha Carter is a Communications Manager at Function Point with a background in market research and strategic communications. She enjoys building high-value experiences for customers along their path to purchase.