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Why Most Start-up Agencies Fail, and How to Avoid the Same Fate

In my experience more start-up agencies fail because they spend too much time planning and not enough time executing.

In this blog I intend to share a few thoughts that I expect to dramatically shift your thinking and thus the course of your business.There is this story from Art and Fear by David Bayles that I think of when talking to entrepreneurs who are planning, planning, planning, and yet more planning to succeed.

Here’s the excerpt:

clay being molded to a pot - know what you have to do“The ceramics teacher announced on opening day that he was dividing the class into two groups. All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality.

His procedure was simple: on the final day of class he would bring in his bathroom scales and weigh the work of the “quantity” group: fifty pounds of pots rated an “A”, forty pounds a “B”, and so on. Those being graded on “quality”, however, needed to produce only one pot – albeit a perfect one – to get an “A”.

Well, came grading time and a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity. It seems that while the “quantity” group was busily churning out piles of work – and learning from their mistakes – the “quality” group had sat theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.”

Now, it is absolutely a good idea to consider what you’re about to do it before you do it. If you don’t even know you plan on making a pot and not make a mug you won’t own the tools or even know that you need to watch a couple of YouTube videos on how to make a pot.


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person writing a plan for their businessPlanning absolutely has a place. There is another quote that goes like this: “The faster a business grows, the faster it dies.” -Yvon Chouinard. There are advocates of creating a 100-year plan. I even took our sales team recently through a book that recommends making a Life Plan. Planning is a good idea otherwise we can easily DRIFT into a life of stagnation or situations we don’t want to be in.

But, let’s be honest. We can’t plan for every eventuality that may take place in 100 years. If you were to complete a PESTLE analysis (P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental) or a SWOT analysis (S for Strengths, W for Weaknesses, O for Opportunities, and T for Threats) you would find that everything simply changes way too quickly to plan in comprehensive detail that far out.

Not  that long ago Smart Phones (sorry alarm clocks, GPS, and numerous other industries), Uber (sorry taxis), Airbnb (sorry hotels/motels), Amazon (sorry the little guy), Google, or the internet weren’t even thought of. Do you think newspapers which have been around for hundreds of years really thought that they would die out?

My goal isn’t to say planning is bad. However , I will say it can easily become the distraction from doing the real work, the grunt work, the work you don’t actually want to do. Nevertheless, it’s the work that is actually going to bring in customers/revenue and pay your bills so you can keep growing your business. Trust me, it’s a lot more fun fantasizing about all the clients and money you’ll be making. But doing what it takes to get that ad campaign up and running, or making that cold call, etc. simply isn’t as fun. That’s where I find a lot of “entrepreneurs” fall under the unfortunate category of wanna-preneur.

Long-term & Short-term

As a result, I propose a mixed approach for most of those out there that are looking to get their agency off the ground (a lot of our customers fall into this category) I recommend applying long-term thinking to short-term decision needs.

What I mean by that is when you decide to do something a certain way or build a certain process inside your business you should ask yourself, “Is this scalable?” If you wouldn’t be comfortable with a future employee making the same type of decision, or if it’s a way of doing things that requires a high level of trust due to lack of proper verification, then those aren’t sustainable systems of conducting business.

The first step, however, is planning for survival. I’m a big fan of survival games (State of Decay, Minecraft, etc.) The goal in these game is acquirinhg enough resources to ensure that you will be okay for the day/night, and then that begins to extend into being able to survive for 2 days, a week, a month, 3 month, a year, etc. When starting an agency, plan your survival first. How much money do you need each month in order to be able to pay your current bills/expected near-term bills? $3000 a month? $5000 a month? More?


survival hunt - be ready to get into survival mode. I have worked with a lot of people who decided they wanted to start up an agency, but they don’t have a sense of urgency to achieve their survival quickly. The problem is they don’t know what they don’t know. If I had a nickel for every time I was on a phone call with a new agency owner who thought starting up their own agency was going to be “easy”, I could have retired by now. (Okay, not really, but the point is many people underestimate the effort and overestimate the rewards.) Seriously, I’ve met people that thought they could cold call a couple of companies, and they’d have their first client within a couple of days. (They had never cold called anyone. They had no tested script, offer, nor experience of what kind of sales cycle this industry has, etc.)

I urge you, have a sense of urgency. I don’t care if you have $1,000 or $100,000 stored away for your bills. Until you have it “figured out” I’d rather you pretend you have to make it happen NOW then to take a relaxed approach.(Time has a funny way of slipping by, and you’ll end up in a really urgent situation). With that said, plan for your survival. Start by answering the following questions:

Who are you going to serve? Define your target market. Hint: I’ve found selling a $500 product is just as difficult if not more difficult than selling a $5000 product. (Why? Because people who buy $500 products are customers who don’t have a lot of money in the first place and they’re the type of customers who want to call you every 5 minutes about the $500 they gave you, also it’s usually the business owner pulling the money out of their pocket, vs selling to a marketing executive who is spending someone else’s money.
What services are you going to offer them? PPC Management? SEO? Social Media? Reputation Management? Email Marketing? Website Development?

Why are they going to buy from you?  We provide our customer’s sales support, so we help establish the why through building a credible experience. People buy from people they trust, so we introduce them to a system that builds trust with a stair step approach. Small asks followed by larger asks. ( I don’t necessarily mean in terms of price point, I mean in terms of length of commitment to take the next step.)

How are you going to market to them?  Facebook ads, Cold calls, Google ads, Direct Mail, Connection referrals?

Once you have survival down, then you can really start the long-term planning. If there is one superpower I could give you it would be speed. The speed to do things quickly,. We can perfect things along the way, but if you don’t get to a place of survival you will find yourself quickly looking for a job again. If I know you like I know most of our white label partners, you are tired of working for “the man”, and you’re ready to be the man/woman.

In my experience more start-up agencies fail because they spend too much time planning and not enough time executing.

Some agencies fail because they executed poorly. Most successful agencies succeed because they executed, failed, created small wins, learned, executed, failed, created small wins, learned, and continued the process until they created big wins and began to scale their business.

Written by: Michael Knorr – VP Marketing & Sales


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