This is a tough topic during times when we're all struggling to break even. Clients are tentative with their marketing budgets, and it's hard to find really good talent on a dwindling budget. You can't pay the salaries without the sales; and you can't get the sales without the people and track record. Inbound marketing agencies are faced with the special challenge of selling services that are relatively new to most businesses while getting paid on a timely basis. If this sounds familiar, please read on. I'm going to make a few suggestions to help you achieve profitability before it's too late.
Most marketing agencies are owned and operated by marketing people, people who have worked with clients for years helping them generate sales revenues through a variety of marketing strategies and campaigns. Most marketing people have limited sales experience and zero accounting experience; that's a deadly combination. You can be the best marketer in the world, but if you can't generate sales and manage your expenses, you're going to face some tough sledding. Successful agencies make sales a top priority and include at least one "numbers person" as a Partner or Senior Manager to keep an eye on the bottom line. Your business plan must be carefully thought out so that your services pricing and delivery costs are in balance with a reasonable profit built in to keep the company in the black. You must consider:
Create a multi-year business plan with reasonable projections for your expected revenues, costs and profit—then create both pessimistic and optimistic scenarios to bracket your most likely case. You will probably need to adjust your plan at least once a year to update new services, trends and performance data. Have an experienced colleague (outside your company) review your plan and give you feedback.
If you monitor your finances every month, you will know when things are getting out of hand. While keeping expenses in check is challenging, it pales in comparison to sales performance. A strong sales pipeline gives you the confidence to move forward with your plan on schedule, hiring good people to meet the growing demand for your services. Building that sales pipeline requires having a tested sales process in place that is fed by warm leads from inbound marketing. Key components include:
If you're an inbound marketing agency, these are services you are providing for your clients, but don't forget to apply them to your own sales and marketing efforts! If this is always your last priority, you will have a hard time keeping the coffers full and your staff on the payroll.
If you're an entrepreneur, no doubt you're already putting in way too much time each week at a fraction of your desired compensation. You're probably already wearing too many hats, as well. You can't be a great marketer, sales person, HR person, designer, copywriter, big brother and accountant at the same time without giving something up. I think most people stick to what they know and hope the rest takes care of itself. Unfortunately, the profit thing is what drives everything else. At least consider hiring a professional business consultant to help you evaluate where you are now and build your strategic plan for going forward. Outsourcing your sales, marketing and even services delivery could be cost-effective alternatives, as well. In any case, this strategy would allow you to focus on what you do best and preserve a modicum of sanity (and family).
FYI, I'm blogging about this because it's top-of-mind right now. I'm no Suze Orman, but I've been there and done that. Please feel free to share your ideas - we're all in the same boat!
Photo credit - Aaron Friedman