Business Owners: Are You Making These 10 Mistakes? Don't let mistakes with simple fixes hold you back from growing your business. Here's what to avoid.
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We all make mistakes as business owners. Most likely, it is your willingness to make mistakes that got you where you are now.
But in a highly competitive environment with more small businesses being formed than ever before — U.S. census data shows that 5 million new business applications were filed in 2022 — anything your agency can do to dodge some of the more common pitfalls will help you stay ahead of the pack.
Having run an agency for ten years, and in my current work helping agencies get super organized, I've found most agencies have the same pain points — and they're avoidable too. I wish I'd known then what I do now.
If you read this article, you've already got an advantage. Don't let mistakes with simple fixes hold you back from growing your business. Here's what to avoid.
1. Working without a contract
Too many new agencies dive right into delivering work without having a client sign a contract first. It can very easily be an afterthought until you get burned.
The fix? Draw up contracts for every project and every client, every time. You might feel like it'll slow you down, and you know it'll require an initial investment to iron out the legal details, but once you have a strong contract template in place, you can edit and reuse it with all of your clients. Building this habit and process early on is vital if you don't want clients to ghost you.
2. Billing upon project completion
Don't wait until the deed is done to send an invoice. Not only can it disrupt your cash flow, but it can also put your business at risk.
Always ask for payment upfront. For smaller projects, you should ask for 50% upfront and larger projects, break it down into 33% upfront, 33% midway and 34% at the project end. Not only will this protect your business, but you'll see it also gets clients more invested in the project from the get-go.
3. Prioritizing the wrong clients
It may seem easier to bend over backward for the clients making the most noise, but it's not sustainable in the long run.
What you should be doing is using data to help identify the clients that are most deserving of your time and attention. A project management platform built specifically for client work teams can provide you with visibility into exactly which clients are bringing in the most revenue and which are draining precious resources. You should also pay close attention to the projects with the most urgent deadlines.
4. Letting scope creep set in
If you've worked at an agency or done client work, you've experienced scope creep and probably let it slide too.
This might sound harsh, but the best way to limit scope creep is to charge clients for every task outside of the original project scope and make sure extra charges are described in their contract. Remember: you can and should charge more for urgent or last-minute asks. Keeping projects within scope is the key to staying profitable and protecting staff from burnout.
5. Failing to update your website
When you run an agency, you spend all your time making other companies and brands look good. Odds are, you've neglected your brand!
When mapping out your year ahead or during an agency lull, set aside time to update or redesign your own website, bank content for your blog and fill up your social queue. At the very least, make a goal to update the case studies on your website. You shouldn't be surprised to see more significant, better clients coming in when you highlight your best, most up-to-date work.
6. Not maximizing profitable work
Most agencies work heads down but often forget to look back to see which projects were the most profitable and figure out why.
The most successful agencies I've worked with use project management software to show them at a glance what types of projects provide the best ROI and which people and teams are top performers. With the right insights, you'll know what to prioritize and perhaps charge more for work that historically hasn't been as profitable to make it more with your while.
7. Taking any and every client
Especially when you are starting, you'll be inclined to take any work that comes your way. The simple truth is you have to know when to say "no" to grow. For many agencies, it takes far too long to realize the value – and profit – in specialization.
By choosing a niche and getting good at what you offer clients, you're setting the stage for better results across the board. If you are working on similar projects for similar types of clients, you can more easily build out repeatable processes to improve your efficiency and help you grow and scale.
8. Not knowing your worth
The answer to more profitability isn't always more clients. More often, it has to do with undercharging for work. This mindset shift can take years to achieve, but the faster you understand how your prices should reflect your reputation and the value you bring to your clients, the faster you will grow.
When we finally increased the pricing at our agency, customers were shocked by how long it took us to make the change. When you charge enough for your services, you'll have the flexibility and confidence to turn down clients that might not be a good fit in the first place.
9. No invoice management
When you're focused on growing and scaling your business, administrative details like proper invoice management can seem boring and unimportant.
My advice: Don't wait. Hire someone to manage invoicing or use a tool that can send invoices out for you and follow up on overdue payments. Using a project management tool with built-in time tracking and billing is how the most profitable agencies seamlessly stay on top of invoicing.
10. Not offering easy extras
Once agencies correct the mistakes that can drag their business down and margins start to improve, it's time to think about maximizing profits. But how can you do this without drastically increasing workloads? Offer easy extras.
Small add-ons to projects you are already delivering (and including them in your proposal) can create a ton of value for your clients. Be sure to carefully assess which are low effort and high return to help improve your bottom line without increasing the team's workload.
Some of the world's best leaders have made truly epic mistakes. The rest of us aren't immune to a miscalculation here and there. By having more open and honest conversations about where things went wrong, the hope is that you can fast-track your way to success with fewer bumps along the way.