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5 Deadly Mistakes Keeping You Stuck in the Agency Trap

In this post I want to break down the 5 most common, deadly mistakes that leave digital agency owners stuck in the “agency trap” plateauing far from their intended life and business outcomes.

This article is based on my experience working closely with hundreds of agencies inside our premium and accelerator programs, ranging from $5K to $500K per month, as well as my personal experience starting and scaling multiple agencies to multiple 6-figures.

This article and strategies described below are most relevant for digital agencies selling creative, marketing or consulting services for at least $1,000 per month.

If you are a freelancer with a few clients looking to transition to agency life, this will be relevant for your upcoming transition.

The Harsh Reality of the Agency Trap

The traditional agency model is a broken business model that leaves many stuck as victims of the ‘agency trap’. When business owners are trapped by a business that cannot operate or grow without them, this is the agency trap.

This is a problem because your business does not serve you in the way that it should. Instead of providing you with an abundance of time, money and freedom, the agency trap robs you of these things.

Personally, this leaves you feeling unfulfilled, empty, trapped, overwhelmed, stressed, busy and often times, feeling like a fraud. Speaking from experience here, so don’t feel bad. You’re not alone.

But, surely freedom is why you started your business to begin with, right? The agency trap surely wasn’t what you were hoping for when you finished the final chapter of The 4 Hour Workweek, amirite?

The core fundamental problem of the agency trap is that your business relies far too heavily on you. The old agency model relies on manual labor instead of repeatable systems and automation.

Now let’s dive into the deadly mistakes agency owners make that keep them stuck:

Mistake #1: You have a generic AF or non-existent niche

Sorry, but eCommerce is not a niche. Neither is “small to medium sized businesses who want to grow their online business”. Neither is “tech startups”. The more specific your targeting, the higher your conversions.

A lot of agencies avoid choosing a niche because they don’t want to “restrict themselves”. The reality for a services business is that if you don’t set restrictions to who you work with, you’re digging yourself in a deep, dark hole.

Working with a wide variety of clients increases the number of variables involved in each and every process of your business, dramatically enhancing business complexity, reducing scalability and sacrificing profit margins as well as quality of life.

What do you think is easier to scale profitably and sustainably? Serving 10 different clients with 10 different problems OR solving the same problem for 10 clients with the exact same problem?

Mistake #2: Your lead generation strategy is “hope for referrals”

As you know, this is a very unpredictable and non-scalable approach to generating leads for your business that can lead to some very tight, cash-crunched months. No bueno.

Leads are the lifeblood to any services based business and 99% of the time, relying on inconsistent lead flow from referrals and networking simply won’t cut it.

While this approach leads to inconsistent lead generation, it consistently leads to burn out and frustration, especially when you get those tire kicking prospects!

Mistake #3: Proposal ping-pong! (Changing sales process from client to client)

When agencies lack a target niche and/or lack a sound lead generation strategy, they can find themselves in some pretty weird situations, like dealing with endless sales cycles and “proposal ping-pong”.

The ‘work with anyone who pays you’ approach results in long, drawn out sales cycles as well record setting low conversion rates. In the rare case that a prospect says yes and becomes a client, it isn’t long before the less than stellar operations and delivery process gets all funked up.

Mistake #4: The delivery process changes from client to client

When you constantly change your delivery process, everything suffers. Quality of work is inconsistent along with client results. As a result, profitability sucks and clients rarely stay longer than a few months and instead of setting growth records, you’re setting churn rate records.

This means you’ve got to refill that pipeline that disappeared when you spent all your time on delivery and operations instead of growing the business.

Given that you have no predictable way to generate qualified prospects on demand AND are stuck with random AF sales cycles, that is no easy task. Enter 100 hour workweeks! The agency trap is now living up to its name!

I’ve talked to way too many upset agency owners who could have had 7+ figure agencies if it wasn’t for sky-high churn rates.

Mistake #5: Relying on manual work and systems that only exist in your head

Many agency owners have systems but most of them cannot be executed independently and require constant input, training and guidance on behalf of the agency owner.

This is the core problem of the old agency model and why it becomes a deadly trap.

The Solution to the Agency Trap: The New Model Transformation

Thanks to the new agency model, there’s a better way to operate your business and a superior way to live your life as an agency owner, without making the mistakes that keep you trapped. Transitioning from the old agency model to the new model is essential for profitability, scalability and quality of life.

Want to setup a New Model agency powered by systems and automation? Join the premium membership waitlist here.

There are three key steps required to make the agency trap a thing of the past by implementing the new (and better) agency model …

1) Setup your Automated Outbound Lead Generation Machine

Setup your high ticket client acquisition system to acquire ~2-5 high ticket clients per month. Start with organic channels (LinkedIn, Facebook) that don’t require ad spend. This will force you to validate your messaging as you are essentially converting your organic channels into direct response landing pages. After you close at least 3 new clients from these channels, you can then ramp up confidently. Now that you have a working model, you can incorporate other channels like advertising and retargeting.

2) Productize and define your New Model Offer

Iterate on your core offer and systemize your delivery process so that your team can execute it for you without slacking on quality. You should be able to automate the entire delivery process from the point of sale until your new client becomes a case study. This can be achieved using about 80% tech and 20% labor (ie. contractors or in-house team). Have your team re-create and optimize your processes FOR YOU as they implement, while you oversee and manage them for the first few implementations.

3) Replace Yourself from Delivery

Replace Yourself to truly become the Owner, not the Operator of your business. In the same way you systemized your delivery, do this to remove yourself from ongoing business management and operations so you can focus on biz dev or whatever you want.

To help you get started with this, follow this process:

Identify the (2-10) critical KPIs required to run your business. If you’re not sure, steal these to start (leads, calls booked, conversion rate, client results, net profit).
Setup weekly reports (80% can be automated with tech like Google Data Studio) to be generated
Book weekly + monthly internal strategy sessions to review progress and design the strategy for the upcoming week/month.

I hope this was helpful. Let’s put an end to burnout and 100 hour workweeks in favor of businesses that serve your wealth, impact and wellbeing.