The fourth stage of the Life Cycle of Agencies framework is Scale Mode.
This is the third inflection point for an agency. At this point, your agency has made the decision that they don’t just want to be a successful business; they want to be a big business, too. Making this transition requires a fresh approach to thinking about systems and leadership. Your priorities and metrics are highly dependent on your goals for this stage.
You want to scale beyond seven figures in revenue.
Success at this stage is far less prescriptive than in previous stages. At this point, the experiences really start to diverge - some agencies choose to scale through horizontal integration (same service, different markets), others through vertical integration (same market, different services), and others still through acquisitions.
There’s no playbook. The choice is a function of the strengths of your leadership and your ultimate goals.
But if you’re finding yourself approaching eight figures of annual revenue and you’ve made the conscious decision to pursue growth beyond this mark, there are several things to consider and prioritize.
First, do you have the right team for your growth plans? For instance, if you’ve chosen a roll-up strategy to scale into eight figures, do you have anyone with acquisition and, more importantly, integration experience? If not, you’ll need a solution in that area. In scale mode, the stakes grow, as do the cost of mistakes. You’ll want to bias toward hiring people who have “been there, done that.”
Next, do you have access to the necessary capital? Will you need outside debt or equity to finance your growth plans? Do you have revolving lines of credit to supplement working capital? Does your corporate structure support your plans? These are critical components of the plan to resolve before you hit the gas pedal.
Finally, does your infrastructure support additional growth? Is the service model replicable, and can it support a double or triple in client size? Do you have mature training, development, and HR to support rapid onboarding of team members? Are your processes documented, and are redundancies identified?
There is no single path through scale mode, but all roads start with preparation. Owners need to define their strategy and ensure the team is positioned to execute against it. And if you’re in this spot but unsure how to start, we’re here to help review options and select what’s best for your business.
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