Why an 8-Figure Agency Profit Shares 50% of Top Line Revenue

By Jason Swenk on July 10, 2019

Looking for an innovative way to inspire your team? One agency has broken the mould on bonuses and profit share systems. Instead, they’re inspiring their team with 50% of top-line revenue. If you want your already amazing team to be inspired enough to hustle harder, check out this incentive program that has an agency team out-earning the leadership team.

In this episode, we’ll cover:

  • 3 ways to identify bad clients.
  • Creating a unique and inspiring employee profit share model.

Today’s podcast guest is Shaun Sheikh, CEO and Co-founder of Jump 450 Media. Shaun has been on Forbes 30 under 30 list, and his agency has blown up tot he tune of 8 figures in just a few years. Like most young agency owners, Shaun has introduced some creative strategies and innovative operations processes into his agency. Today, we talk about a few of those including an exciting employee compensation model that he calls his secret sauce of success.

3 Ways to Identify Bad Agency Clients

Learning to say no to bad clients is one of the major pillars of agency growth. When you start out, you want (and need) to take what any and every client you can land. That’s fine! You should be taking on all clients and discovering who your agency really is. Who you can help and who you can’t. What you’re good at and what you’re not. What you love to do and what you don’t. But, once you get established and learn the hard lessons, it’s time to get really focused so you are only working with ideal clients that pay what you’re worth.

So, where do you start? How do you figure out which clients are good and which ones you need to “swipe left”?

1. Start with culture.

Before you even think about cash, think about culture. If a prospect isn’t a good fit with your agency’s culture, you’ll know. A good pre-qualification process is the key to identifying them. Remember, there’s no such thing as a bad client ~ only a bad prospect or bad process. There’s no strategy involved here. Trust me; you’ll just know. Get rid of these prospects/clients ASAP. They’re a terrible fit, and you will almost certainly run into issues with them in the future.

2. Analyze client spend.

Does the client’s time-to-value ratio make sense? Some seemingly high-value clients end up taking up too many agency resources. When agencies first start, naturally they want to land high ticket clients. A $50k client may seem like a dream-come-true. But, if you can service seven $10k clients with the same amount of effort, that $50k pain-in-the-a$$ client no longer makes sense, right?

3. Map out future potential.

This is the hidden client statistic no one ever talks about. What does their future potential look like as far as upsells, future campaigns? Is this client adapting to their changing environment? Are they innovating in their industry? Does their potential look as though it will support your goals? If not, then don’t spin your wheels.

Using a Unique and Inspiring Employee Profit Share Model

There are several schools of thought on employee profit share programs. And, I know a lot of agencies who swear by this type of monetary incentive. However, Shaun has a pretty interesting and unique profit share model you’re going to love.

Jump 450 gives its agency employees 50% of the top-line revenue!

That seems like… a lot, right?

Here’s the catch… Employees can only earn that incentive if they outperform their own salary. They have to hit their salary goals first. Then, they start earning additional revenue based on performance.

And, he does this on a monthly basis!

This profit sharing structure helps agency employees feel as though they co-run the company. They get involved with every client and try to outperform themselves. Some of Jump 450’s employees out-earn the leadership team… Crazy, right?!

Keep in mind, to get qualify for the profit sharing bonus the team has to perform like crazy. And, all of that extra performance means better profit margins profits for the agency. In reality, the team is getting 50% of the profit they hustle for. This is the above and beyond stuff, they aren’t expected to do. Late nights, next-level pitch prep, and after-hours client meetings, etc.

And, when the employees earn big, so does the agency. It’s literally a WIN-WIN.

Will this work for every agency? Maybe not. But, if this kind of incentive program fits into your existing business model, it can be a great way to get to the next level.

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Building a Business

I hope this has opened your eyes to the benefit of creating a profit share and bonuses structure for your team to motivate them in creating the best work and agency possible. The key to being a good agency owner is being able to recognise issues within your agency that are preventing you from achieving the full potential of your business.

Through my own experience as as agency owner, I have experienced all if not most of the different struggles you are going through and I can help you. Whether it’s how to deal with bad agency clients, the process of developing agency products as well as how you can build authority for your agency.

If it’s challenges growing your business that you are experiencing, I have agency growth hacks, the best ways to improve management of your business as well as why building a remote team can be beneficial in the long run.

Learn more about my career as well as tips, tricks and insights by checking out my blogs that cover a wide variety of topics.

You can hear about all my experiences as well as advice from other successful agency experts in my Ask Swenk series and more of my videos on my Youtube channel.

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