Why Your Top Line Revenue Doesn’t Mean Sh!t
So many agency owners become consumed by their top line revenue and what they need to do to make it better. Incase you didn’t know, top line revenue isn’t everything and yours means absolutely nothing in the grand scheme of things.
In this episode, we’ll cover:
- Why top line revenue isn’t everything.
- 2 ways to tackle profitability.
- How to get past the excuses and be a content machine.
I’m super psyched to have Joe Apfelbaum as my guest on the podcast today. Joe’s the owner of Ajax Union, a 7 year old, $4 million dollar agency. In addition to being a successful agency owner, Joe is also a mega content producer. He tells us all about what he’s done in order to get to the multi-million level, what he stopped doing to stay there and how in the world he has the time to create so much content.
Top line revenue isn’t everything
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When they started seven years ago, Ajax Union was operating as a full service agency. They would do anything/everything for anyone/everyone. They experience significant growth while revenue doubled every year for the first 4 years. They were also on the Inc. 500 list as the fastest growing agency. BUT, top line revenue and quick growth isn’t everything if you aren’t managing profitability…
Back then the agency had 350 active projects at any given time, which meant 75 full time employees to service their growing client list. They were building their top line with no regard to the bottom line. Joe knows firsthand – you always have to be working on your bottom line.
In early 2015, Joe decided to take a hard look at where his agency was heading. After He restructured his agency and his approach to business. He made two huge decisions which impacted business dramatically:
2 Ways to Tackle Profitability
1- Focus on a specialization
Instead of being a full service, “me too” agency, Ajax Union focuses now on B2B lead generation. Doing this meant deciding who they can and cannot serve… and willingness to turn away work that is not ideal and specific to their niche.
Defining a niche not only meant targeting specific businesses with their outbound strategy but doing this also created a built-in screening process for inbound. The result was a cut in full time staff and outsourcing more work in order to manage profitability.
It’s scary when you define who you are and who you’re not, because it means eliminating opportunity. Now, Joe says he turns away 90% of his prospective clients but it hasn’t hurt revenue one bit.
2- Build relationships
Joe says he also realized building relationships was going to be the key to sustainability. Rather than just driving leads and competing with every other agency, he has now created a network of agencies that have complementary skills and developed a referral community. He is sending business to other agencies and they’re reciprocating.
Relationships and networking is a great business building strategy. In fact, I interviewed one agency owner who doubled their business by referring work to other agencies. When you stop competing and start trusting your connections, everyone wins.
The other huge benefit to having great relationships with other agencies is for your future. You may want to buy another agency as a growth strategy – you may want to sell your agency to someone you trust. If you have established relationships these transactions are much easier.
How to Get Past the Excuses and Create Massive Content
Content is king, for sure. And Joe’s a big proponent of helping without selling. He believes great content helps serve your target and they will remember you for it when it’s time to work together.
Even though he produces a ton of content now, it wasn’t always like that for him. He says he started and stopped several attempts at blogging, email marketing, podcasting and video production. Like all of us, it’s hard to make time to write or record yourself. Life gets in the way -plus- there’s all the usual reasons not to do it: camera-shy, fear of speaking and general lack of confidence. Joe had all those reason (excuses) too, and that made it nearly impossible to commit to content creation.
2 Steps to Being a Content Machine
1- Define your goals to grow to your agency.
It’s all about clarity. Getting really clear about where you’re going means you’ll get there a lot faster. Joe says it took him a long time to understand and appreciate his ‘why’. But, once he got clear about his personal purpose he was able to create a personal brand.
When you aren’t sure who you are, you end up hiding behind a facade or some notion of who you should be… so, figure out who you are and why you’re doing what you’re doing.
When Joe got clear about his purpose, he realized it’s about being helpful and inspiring to others. He merged that with his business goals and knew he had to start putting himself out there.
2- Commit and make it priority.
Don’t allow it to take a back seat.
With crystal clear purpose, Joe’s done a complete 180. He shed his excuses and now has a weekly podcast, internet TV show and posts daily inspirational videos on Facebook. He also sends a weekly blog-style email to the top 100 ideal clients he’s targeting. He writes for Entrepreneur, Forbes, Business Insider and more.
It’s not really about how much content you can create it’s how much you can you share, re-purpose or re-package it. I live by the 80/20 rule. Spend just 20% of your time on on content creation and 80% on distribution.
Is time the problem? Don’t let time be your reason. Make time or hire someone dedicated to content creation and agency marketing. Commit to a content schedule and block out time to crank it out. Or, delegate to a team member who can make it a priority if you can’t. It should be a non-negotiable growth strategy.
#1 Strategy that Drives 100% Agency New Business
I asked Joe how much of his business comes from his content. His answer? “ALL.”
And if you think about it, it makes sense. He says he’s got stuff everywhere. So every brand that’s working with Joe’s agency has seen or heard something from him prior to working together. He has done the groundwork and built the know-like-trust factor.
His best advice is to just get started. Be on a predictable schedule and be patient while momentum from your content builds. Whatever you do, don’t his the pause button – it’s just too hard to get motivated to get going again once you give yourself permission to take a break.
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Next Steps For Your Agency
Has your opinion on top line revenue changed?
I hope it’s starting to sink in for you that your top line revenue of your agency doesn’t mean anything and it has encouraged you moving towards the next steps of growing your agency. But what’s next on the list?
If you need support and advice on any topic, I have most likely experience them myself and can help. From what to do with your sales processes, ways to increase your profit margins or how you can build authority for your agency.
I can show you how to stop losing money on projects, why solid processes for performance based pricing can be the best pricing strategy and how having remote working or freelancers in your team can be beneficial and the best ways of managing them.