First Steps For Scaling Your Agency Operations

With growth in any company, the amount of admin work goes up, and agencies are no different. Founders are busy selling and hiring people, so operational scrutiny is conducted late in the evenings and last-minute. The business is growing, but the lack of leading with data starts to hurt profits, and efficiency goes down.

What are the exact problems that start to occur in the first place?

Project overruns

It might be that you’re constantly selling projects with too small a price tag to begin with, losing dollars already before the project has started. Alternatively, you might have more subtle overruns in specific types of tasks that hurt profits over multiple projects.

Revenue leakage

When headcount grows, human errors increase. People might be logging their time on the wrong projects, mistaking learning a technology as internal work as opposed to client work, and so on. This is what we call revenue leakage. Someone in the company needs to monitor planned and actual hours.

Decisions made with no data

You’ll (still) need a human to decipher your numbers and make suggestions on how to improve. When to make a hiring decision, what are the most typical project overruns etc. No one knows the answers, so decision-making is slow, and not based on data.

How to improve?

You’re faced with a tough decision: should I have one of my consultants step up as the COO of the company or hire someone from outside? Both approaches mean you’ll end up with more overhead. We recommend trying to do that as late as possible so your core team is focused on the three most important things: consulting, sales, and hiring.

You still need to keep an eye on the ball, so how do you do that? Here are our suggestions.

Implement bottom-up processes

Instead of management updating project numbers and resource allocations top-down, create a company culture where consultants have more autonomy and responsibility over their own planning. This will diminish administrative overhead.

Have simple and intuitive tooling

No one hates anything more than the complex spreadsheets you’ve built over time. Everybody is afraid of making changes, trying not to break the delicate structure. Intuitive and simple time tracking, project management, and capacity forecasting tools will make it simpler for the team to manage their work.

Hire a fractional COO

There are ways to scale your administrative team without hiring for an internal role. Fractional COO services like Sirvan Jackson, The Arithmetic offer experienced agency COOs as part-time resources, so you can be smart about scaling your company. You’ll get operational clarity flexibly based on your own requirements.

As agencies expand, managing operations and core tasks gets tougher. Founders juggle finances, sales, and hiring, risking project profitability and efficiency. The fix involves possibly appointing a COO from within or hiring one, both increasing costs. Agencies can instead boost consultant autonomy, streamline with easy tools, and bring in a part-time experienced COO (fractional COO). This strategy helps scale effectively without bulking up the team too soon.