2020 Behind-the-Scenes at Scoop Studios
What a wild ride this year has been, so today I’m taking you behind the scenes of my agency to share what’s been going on, and some of the lessons I’ve learned along the way.
It’s been a while since I’ve taken you behind the scenes at Scoop, and I figured it was the right time to do that as we’re in the middle of our series on all things agency.
So far, I’ve shared why it’s time for a new generation of agencies, and the entire backstory of my agency journey. If you’ve not listened to those episodes yet, go back and give them a listen. Both give you context for everything I’m going to share in this episode.
2020 has truly been a weird year, and when I think back about the last 10 months it feels like it’s been so much longer. This is comical as I’ve literally been at home most of the time since March.
Let’s Talk About Revenue Growth
Going into 2020, I had some big growth plans for the agency. I was ready to add more clients, and grow our team. That’s NOT what happened. But there are definitely a few big lessons I can take out of this year, along with some decisions I made in 2019 that have led to a solid year despite everything.
For Scoop revenue wise, I’d mapped out a plan for 30% year-over-year growth. Which, given how solid 2019 turned out to be, was pretty freakin’ ambitious. Right now, we’re on pace for the agency revenue to be up by 20% year-over-year. And as of the end Q3, we’ve done the same amount of revenue as we did in all of last year.
I want to acknowledge one key factor, as it would be irresponsible to talk about these numbers without these details. First, our clients are primarily in the tech sector, which, for the most part hasn’t been impacted. It’s not without its challenges, but our vertical market is a success factor. Yes, we’ve lost clients as a result, but we’ve been able to weather the economic impact of the pandemic.
Key Decisions for Stability and Growth
2020 has definitely been the result of decisions made over the course of the previous year to create greater stability and future growth. Last year, I recognized that in order for any growth to happen, we had to find small ways to maximize what we were doing.
My goal with each decision was to optimize what we were doing before we added to the team. Employees and contractors are the #1 expense I have as an agency owner, so instead of simply hiring more and more people, I wanted to increase revenue and improve internal processes first.
The #1 way I did that was with our pricing. I found ways to raise pricing where possible, with an eye on increasing our minimum retainer engagement. That’s led to us having fewer clients, and having more robust relationships with clients. Having a lower total number of clients means less complexity, better margins and fewer potential points of failure.
So many times, we think the only way to make more money is by adding more and more clients, but at a certain point, that doesn’t work anymore. The real power move we have is to reduce the number of clients, and increase how much clients are paying us. Having done this, there’s definitely been greater efficiencies thanks to reduced project management requirements and less context switching.
This has also meant a lower overall close rate this year, and I’m comfortable with that. We have capacity for the right client engagements, and aren’t needing to take on projects or retainers we’re not excited about.
If you’re considering reducing your number of clients on the roster, I do want you to think carefully about how to find the right balance between too many and too few clients. The goal should be not to have so few clients that losing any one client is catastrophic.
The Realities of Lead Generation
This has definitely not been a banner year for lead gen, and that’s not surprising at all.
In looking at the first three quarters of the year, our total number of leads is down by 50%. Then, we layer in the reality that our win rate has declined significantly due to increased pricing. We’ve gone from a between 40 and 50% (depending on lead source) win rate in 2019, to about 33% in 2020.
When the pandemic hit in March, I immediately pulled back from cold outreach, and then we won a significant contract, which then gave us additional breathing room. As a result, I’ve yet to resume that outreach, so that’s the biggest reason why overall lead gen is lower than the previous year.
Going into the fall, my plan was to pick cold outreach back up, but then two things happened. First, we had a major spike with one of our agency clients, and I literally couldn’t add another thing to the mix. Second, an old client (who we love) is talking to us about coming back soon, so I wanted to wait to see how that pans out.
Plus, to be honest, I’m a little resistant as I don’t want to be one of those cheesy people that are popping up in my own LinkedIn inbox. I need to get over that and get back to it at some point soon.
Finance + Operations What’s New and Next
A big focus all year long has been on managing expenses carefully in order to strengthen the cash position of the business. I’ve done a lot of work in the past couple years to ensure we’ve got a solid cash buffer, tax savings and more handled.
With reduced expenses this year in terms of travel and events, it’s been an opportunity to build that buffer further. The reality is that I don’t know exactly what 2021 will bring, and having more runway than in “normal” times, is simply a good idea. Plus, it means when we need to, we can hire quickly as it’s been planned for.
On the operations side, having fewer clients has created space for Sara, who’s my #2, to continue to step up in her role. She’s done an amazing job of firing me from things I don’t need to be involved in as well as taking the lead with our bigger clients. I can see clearly where the opportunities are for this to continue to happen.
Plus, I’ve been working my ass off to ensure I stay in a mindset of being the visionary for the business, not the owner or the big boss. That means letting my team make decisions and trusting the results. This will be an ongoing work in progress, but it’s definitely one of the best things I’ve ever done. It’s given me a sense of calm and relief about the business overall.
When thinking about this, one of the reasons we’ve been able to do that is that our work is very narrow in scope, and processes get repeated across every client. While our services are customized for each client, we don’t offer so many services that we have an endless series of potential scenarios.
This is exactly why we’ll continue to be super niche as a content marketing agency specializing in content production. By staying in our own lane we save time, and we’re ultimately much more profitable.
What’s Up for 2021
Naturally, I’m thinking ahead to 2021, and truthfully, I want to find a way to have a plan that’s flexible in light of uncertainty. If we stay the course on where we are right now through this recession, I consider this a win.
Plus, I have some questions I need to answer in terms of my time split between the agency and Small Business Boss. Neither one is going anywhere, but I want to focus my energy where I’m most excited and inspired, which is right now, is Small Business Boss. It’s not to say I won’t be focused on the agency, but rather, that stability over scale may be the priority in the short-term. Of course, it’s all subject to change as 2021 unfolds!
If you’re looking ahead and thinking about how to grow your business using the agency model, you may want to check out the Agency Mastermind. You can put your name on the waitlist now.