TL;DR
“Playing business” is when you do work that looks and feels productive—but doesn’t move revenue, profit, or durability. The cure: focus on the hard, high‑leverage activities (pipeline, account farming, margins, leadership accountability), hire when it hurts, fix process before tools, and build a thrifty culture. Profit first; then purpose scales.
The Problem: Busy All Day, Nowhere to Show for It
If you run a creative or marketing agency, you’ve been here: the calendar’s packed, the to‑do list is heroic, but pipeline and profit don’t budge. That’s playing business—choosing the easy “candy” work over the hard “nutrition” your firm actually needs. It’s human, it’s common, and we’ve been guilty ourselves. But it’s also fixable.
We’ve worked with agencies for 13+ years. We’ve watched owners burn out, margins vanish, and in worst cases, businesses fail. The patterns repeat. Here’s how to spot them—and what to do instead.
Red Flags You’re Playing Business
1) Spending Ahead of Growth
Leadership layers for an eight‑person shop. A gorgeous office your distributed team won’t use. Overhead you hope growth will justify. We call it out because it quietly kills runway. A better rule: hire when it hurts—when demand is already pinching delivery.
2) Shiny‑Tool Chasing
New PM suite, new CRM, new workflow tool…again. Tools can accelerate good process, but they won’t turn a non‑activity into activity. Fix the workflow first; then let software save minutes, not your model.
3) Capital‑Market Cosplay
Sub‑$10M agencies “raising a round” or buying a firm because it feels like big‑kid business. Most small service businesses are fragile, people‑heavy organisms. Integration risk is real; predictable cash flows are not. “Everything is hard.” Acquisitions aren’t shortcuts.
4) Coach‑Collecting
We love great advisors—but outsourcing judgment is dangerous. No consultant knows your context like you do. Use outside input; keep the decision rights.
5) RFP Lotteries & Pipeline Neglect & RFP Lotteries
Open, cattle‑call RFPs look like progress and rarely convert. More dangerous: waiting until the pipeline is empty to “get serious” about biz dev. Treat the pipeline like oxygen, not a side project. If you’re in a mid‑year lull, try these ideas to reignite your sales pipeline.
6) Owner Lifestyle Creep
When the firm becomes an identity projector, not a durable business, costs swell and decisions skew. The company should outlast any one person—including the founder.
What Winning Agencies Do Instead
1) Focus as a Moat
The most profitable firms keep the main thing the main thing. They say no to distractions that dilute positioning, time, and cash. They get better at their core craft every quarter.
2) Hire When It Hurts
Staffing follows demand. This protects gross margin and discipline. You already know the profiles you need; the hard part is demand. Solve that first.
3) Thrift as Culture
Our highest‑margin clients (30–35% net) share a DNA trait: relentless thrift. For a playbook to get lean without hurting growth, see our guide to recession planning for agencies. They scrutinize every dollar—even at eight figures. Needs‑based spend beats nice‑to‑have every time.
4) Known for Something
Be the straight‑faced best at a specific thing a market needs now. “We’re great at everything” is forgettable; a clear calling card is referable.
5) Account Farming > New Logos
Healthy agencies retain and expand existing clients. See our take on annual account planning for how to make this systematic. As a rule of thumb, target ≥50% of annual revenue from current accounts. Make account planning a ritual.
6) Deputies and Swim Lanes
Owners of durable agencies don’t carry everything. They push responsibility to leaders with clear swim lanes, a weekly scorecard, and egoless collaboration.
7) Process Before Tools
Write the workflow. Run the reps. Once it works, pick the lightest tooling to make it faster. Tooling follows proven process, not the other way around.
8) Profit First, Then Purpose
We’re mission‑minded, too. For more context on frameworks, here’s why Profit First can hold back scaling agencies—and what to do instead: Profit First is Holding Back Your Agency. But we have to do well to do good. Profit is what protects people and purpose during the next downturn—and funds the impact you want to make.
Benchmarks to Run By (Sanity Check)
-
Gross Margin: ~45–50% (model‑dependent)
-
Net Margin: ~20% baseline; 30–35% with discipline
-
Revenue Mix: ≥50% from existing clients annually
-
Hiring Rule: “When it hurts,” not “in case it grows”
Common Objections (and Our Take)
-
“We need leaders to grow.” True—after demand is real. Leadership without load just erodes margins.
-
“The right software will save us.” Only if your process is solid. Otherwise, you’ll just do the wrong thing faster.
-
“An acquisition will jump‑start us.” It might—if it’s your core competency, you have an integration plan, and you’re realistic about churn. Otherwise, expect disruption, not lift.
For more on this topic, listen to the full Creative Outcomes Podcast episode: