Seth Godin recently published a blog post entitled, “Questions for a new entrepreneur.” It’s a concise and powerful read for marketing agency owners, and those considering taking the leap. For example, consider the following passage:
“Are you trying to build profit or equity? A business that builds a brand, a footprint, a standard and an audience might end up being worth millions (witness Tumblr, which has many millions of value but zero profitability). On the other hand, a business with no exit value at all might spin off plenty of profit (consider the local doctor’s office). It would be great if you could simultaneously maximize both the value of your company and the profit it produces (in the short run), but that’s unlikely.” — Seth Godin
I wrote extensively in The Marketing Agency Blueprint (Wiley, December 2011) about knowing what you are building, and what you are willing to risk. The following excerpt from chapter 2 offers an entrepreneurial audit of sorts with questions that can help you determine your agency’s direction, and your personal goals as an entrepreneur.
Are You Building a Disruptor Agency?
Building a dynamic, full-service hybrid agency designed to grow beyond 10, 20 and even 50 employees, requires incredible drive, remarkable patience and an undying belief that you are creating something of great significance. Money cannot be the primary motivator.
It is the need to create change, to push boundaries and to positively impact the lives of others. Professionals who choose to build disruptors believe they have a higher purpose. It is not the right career choice for everyone.
Historically, many agencies have been built by professionals who excelled at their work, and wanted the freedom and financial rewards that came from owning their own business. They were practioners by trade, not businessmen and women. But, in order to construct a disruptor agency, the practioner function must become secondary, and your passion has to be for building and running a business.
Like all entrepreneurs, agency principals have to make sacrifices in the early years, especially if you have a vision for growth. This includes working endless days followed by sleepless nights, taking smaller paychecks (if at all), investing profits back into the agency, fighting with increasingly conservative lenders to secure capital, dealing with mundane details such as healthcare benefits and taxes, putting employee and client needs ahead of your own at all times, and learning to live with and embrace the unknown.
In order thrive in the new agency ecosystem you have to start by being honest with yourself:
- What are you willing to sacrifice?
- What motivates you?
- How will you define success?
- What type of agency do you want to build?
- What are your greatest strengths?
- What are your greatest weaknesses?
- Are you a leader?
- Are you in the financial position to take the risks needed?
- Do you have the ability to recruit and retain top talent?
- Will you be happy running a business, rather than doing the work?
If you plan to build a disruptor, you will come to spend 90 percent or more of your time on three things: 1) recruiting and retaining talent, 2) setting and pursuing the vision, and 3) driving growth. If you do not have the desire or ability to excel in these areas, you either need to find a business partner who does to assume the role of CEO, or you should consider pursuing a different path in the ecosystem.
So, What Are You Building?
What are your thoughts? Have you made difficult choices to invest in the long-term value of your agency over short-term financial gains? What advice would you offer to marketing agency entrepreneurs who are just getting started?
Transform into a Hybrid Marketing Agency
Download chapter 2 — Transform Into a Hybrid — to learn more about hybrid agencies, and the opportunities that exist in the emerging marketing services ecosystem.
