How to efficiently scale an agency by niching down
The goal of any agency should be to profitably scale it.
It seems easy on paper… Sign new clients, deliver results, hire employees, and you’ll be set.
But, the reality is, scaling an agency is hard unless done properly.
The main bottleneck when scaling a business is efficiency, because being able to provide value to each client takes time and effort.
And if your clients are in dozens of different industries, you’ll be running on an endless hamster wheel of client work.
To avoid this and have the bandwidth to scale, it’s key to work with one niche at a time.
Here’s how our agency figured out how to properly scale our operations:
1. Sign clients in all industries
Before we started working with just one niche, we took on clients in all types of industries to see which ones we could deliver results for.
If the client was interested in our services, we sent them a contract and signed them on even if we weren’t fully confident they’d be a good fit.
2. Find which clients we delivered the most value to
Once we signed on a handful of clients, we’d audit of each client to see which ones we were delivering solid results for.
For example, say we had clients in the ecomm, coaching, marketing, paid ads, and email marketing industries.
We noticed we were delivering average results for 4 of these 5 industries, but really overdelivered for our ecomm clients.
3: Work with only that niche moving forward
Once we dialed in on the ecomm space, we changed our entire sales process to only sign on ecomm clients.
If a prospect from a different niche wants to work with us, we either downsell them to ListKit, our B2B prospect data product, or downsell them to our “catch and release” service where we build the fulfullment system for them and let them manage it themselves.
Staying disciplined working with just ecomm clients can be hard at times, but it’s important if we want to scale efficiently.
By working with just one niche, our process can be easily replicated, systemized, and outsourced.
This saves us tons of time on the fulfillment side, and gives us time to focus on high level strategy rather than day to day operations.
4: Become the go to agency for that niche
Now that we’re fully committed to serving one niche, it’ll become easier and easier to sign clients in this niche.
Since our offer is so well-defined, the trust level with prospects in this niche is immediately there. They know we dedicate our full attention to businesses like theirs, and have tons of case studies with businesses like theirs.
Makes it increasingly easy to sign on new clients, and the effect compounds.
5: Cash flow or sell
Once we grow our agency to a certain point, we can either let the business cash flow to support our other ventures, or we can look to make an exit.
Agencies are especially hard to sell because they typically require the input of the founders, but with just one niche being served it’s much more attractive to buyers.
They can step in and follow a series of SOPs, and know exactly how to bring results to the niche we work with.
6: Choose a new niche
Once our current agency reaches the point of passive cash flow or being sold, we’ll look to serve a similar niche and start the process all over again.