How Do You Launch an Agency That Will Grow Over Time?

Advice from a Veteran for a Couple of Young Upstarts

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Sometimes you get lucky and get to go back in time and see your own past from a different angle. That's how I felt when I recently visited a start-up social-media agency with a staff of 10, to discuss potential partnerships. I felt nostalgic for the exhilaration of trying to get an agency launched, and I was really interested in how a couple of Millennials would face challenges similar to those I faced almost 20 years ago when PJA Advertising was getting off the ground.

"How ambitious are you?" I asked the two partners, Matt and Brennan. One of them answered, "What comes after extraordinary?" Don't bet against these guys.

I fondly remember the tremendous advantages that a well-tuned 10-person agency offers. You can turn on a dime and work with minimal bureaucracy and systems. You can throw the entire agency against a challenge and move as a unit with incredible speed. These strengths can make you a formidable competitor.

Matt and Brennan also reminded me of the frustrations of those early days. For many clients you're too small, too young, or just unproven. You may win business from impressive brands, but you're still pretty far downstream from the role of lead agency. It can feel impossible to market the agency and get the work done. Striking a balance between workload and number of people can be daunting.

After taking care of business, we shifted gears and talked extensively about how to scale, win and manage bigger accounts, to build an organization that can grow over time. It made me wonder what useful advice I might have for guys in their mid-20s who were probably playing with Star Wars toys when I got my start and was worrying about how to pay the rent.

Through the filter of this young and growing agency, I looked back to what I had learned as I traveled the sometimes bumpy road from 10 to 60 people. Here's advice that I wish someone would have given me.

You're never too small or young to hire the equivalent of a Chief Financial Officer. He or she can foresee obstacles in your path and solve problems that you didn't even know you had. Most young agencies underestimate the value of a senior financial advisor.

Overspend on talent, even when money is tight. An extra $25,000 for a brilliant account or creative person may feel at any given moment like it's going to break the bank. But it's a small investment for someone who can help you crack new markets or produce award-winning work for your best client down the road. That's how you grow.

Think exponentially. Self-imposed barriers often slow you down as much as external factors, such as the economy and competition. Starting out, it's hard to imagine that you can win a piece of business twice as big as that of your largest client. Remember that we've all achieved goals that first looked impossible. We learned how to walk, right?

Keep the door open for senior people who have taken the journey before you. As you move up in size, it's hard to anticipate the changes you will need to make without a guide. That may mean creating new senior roles that didn't exist when you were smaller. This is where your CFO can be particularly valuable because he will help you figure out how to make these structural changes.

Enlist support from your clients. The best ones often talk about wanting a partnership with their agency. Take them up on it. Identify the clients who want to see you grow and will support you with strategic advice and additional opportunities. The more I shared with our clients the more support they offered us.

The mystery for me is whether or not the lessons that got us where we are today can help us take the next big leap forward. I'm going to test my own theories, but I'm also open to any and all advice.

Phil Johnson is CEO of PJA Advertising & Marketing with offices in Cambridge and San Francisco. Follow Phil on Twitter: @philjohnson.
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