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What Makes a Successful Agency and Why You Aren’t One

April 21, 2024

Development Agency Owners, a question for you:

What sets an Agency charging 30 USD/hr apart from one charging 100 USD/hr?

Here’s a roadmap for how most Agencies go about:
1 – You start providing services
2 – You figure out how to win clients
3 – You figure out how to scale a team
4 – You keep getting engagements – you sell more than you can handle
5 – You burn out and stop

I come from the Freelancing world. And this is the perspective anyone will have who is trying to go from being a Freelancer to an Agency. But at the same time, I have worked extensively in Corporate as well, and the Agencies you see in the corporate world – don’t feel like this at all. 

Why? Because they have figured out the following:
1 – They DON’T take on whatever comes through the door
2 – They prioritize quality over quantity
3 – They know their niche, they don’t sell to ‘Everyone’

There’s a reason why the lifespan of an average Freelancer turned Agency company is around 4-6 years. A lot of Agency owners will see a massive increase in their revenue, try to maximize the profits, and fail to understand the long term effects of the mishaps that keep happening.

Now if you’re reading this and nodding your head. Then here’s how I can help you out. My experience in developing processes for several agencies has allowed me to have a blueprint which you can use, starting today.

I will focus on helping you with the core fundamentals that will make you stand out in the Red Ocean out there. High competition means it’s high time you pick a lane and stick to it. But you can only do that once you have the basics covered.

The fundamentals any Software Dev Agency Needs to Have

Here’s the answer to the question at the beginning of this article:

What sets an Agency charging 30 USD/hr apart from one charging 100 USD/hr? – Process; 
And what sets apart an Agency charging 100 USD/hr from one winning quarter million contracts? – Branding

Source: Process Prognosis for Software Dev Agencies

And before you go focusing on your branding, you need to nail down the basics. Having the basics covered allow you to not worry about dying out. And then you can worry about how to brand yourself to reach the next scale.

This article is designed to help you establish the following fundamentals in your Software Development Agency:

1 – Standardize procedures for processes that happen on repeat
You need consistency where possible, automation where necessary. Standard procedures will help you maintain constant value on repeat.

2 – Manage your day to day and your team effectively
Services business is all about the team you have. Your team’s performance is your performance. Knowing what to care about and what not, is crucial to your success.

3 – Onboard clients better than ever before
Your clients will appreciate you discovering their problems before jumping to payment and execution.

With integrating these 3 into your operations – you will quickly see the increase in value you’re providing to clients in need.
And the equation then becomes simple

Higher Value = Higher Value Clients

Taking on 50 projects every year, failing to deliver 20, and burning out before you hit 10 years – should not be the way your Agency goes out.

Lemme get some assumptions out of the way first. Since this is an article and not tailored advice, below is what you need to consider while reading the remainder:

Everything I talk about below is for ‘Software Development Agencies’ working on delivering Websites, WebApps, Mobile Apps, and similar projects. Although a lot of it can be applied to other Services focused businesses, that is not the goal here. 

This Article is meant for small scale Agencies who are early in their existence averaging around 10-30K USD/month revenue. If you’re larger than that, you may not find this applicable to you, and if you’re smaller – then you need to up your sales first. And if you’re an outlier, then you gotta tell me your story, hit me up on LinkedIn.

Lastly, this Article isn’t be all and end all – what it is, is a compilation of the top process categories most Agencies struggle with or lack behind in. If you’re one who doesn’t you can still take inspiration or unlock a new perspective from the read.

Standard Operating Procedures for your Agency

As an Agency Owner you are constantly split between 3 main categories of duties in my experience.
– Getting new customers and managing the sales cycle
– Managing the resources on the team ensuring project success
– Keeping track of all the projects and looking out for delivery

Sounds easy in three lines, is way more complicated when you dive deep. It is not humanly possible to balance quality and quantity when you are taking on so many duties. Hence the first step for any Agency is to figure out where the fat is, and trim it. Or more specifically lay out an easy to understand set of rules by which your team can operate by.

Let’s take a standard small Agency Setup.

We have the Owner, we have 1-2 Project Managers, we have 3 designers, we have 3 developers, we have 1 QA tester, and we have people helping with Sales and Marketing.

When it comes to developing SOPs for the whole team, the expected outcomes of your should be as follows:

1 – Have a clear understanding of how the team should communicate with each other
2 – Have consistency between how your clients are being managed across projects
3 – Any blockers should be red flagged and visible to the whole team
4 – All projects getting worked done on should have easy to visualize progress tracking

Given that base layer of understanding, here are the key focus areas for developing SOPs from the get go.

Communication SOPs for an Agency

Communication makes or breaks the efficiency you bring to the table. And from what I have seen, a lot of agencies make it too complicated. The number one reason why comms fail is inconsistency.

One day the Owner will email their team for something and the next day they will slack them, and the third day they will call them only to find out the team member responded them on email 2 days ago. 

Keep it simple, keep it structured. Have dedicated channels of communications based on priority, and then have dedicated cadence of communications based on requirements. Here’s what you need to set up:

– Have the necessary channels for all your team members to report anything in order of importance:
– Highly Urgent: Direct comms like Slack or Teams, etc.
– Documentation Only: Project Management Tool, Basecamp, Asana, Monday, etc.
– Client Communication: Email or Client Management Tool.
– Check Ins and Daily Comms: Slack or Teams, etc.
– Have a way for everyone to be notified whenever a task is assigned to them.
– Make sure everyone is checking their pending notifications and communicating efficiently where needed. Use tools that support the ‘Assign’ function for tasks on your projects.
– Have a way for team members to submit company feedback – Always!. And ‘DM me’ for issues is not the right way.
– Schedule a daily standup (if small team) or twice a week check in (if large team). The purpose should be to clear out blockers on the work being done, that’s it.
– Make sure the respective teams have their own check-ins happening to discuss issues in larger detail.
– Lastly, for every project that is being handled, the communication space needs to be dedicated for that specific project – don’t mix and match!

Project & Task Management SOPs

You’re delivering projects, and you need Project Management. As cliche as it is, a PM tool is a must have to run an Agency. I don’t care what tool you use, as long as the basics are met.

What are the basics you say?
– You have the requirements laid out
– You have all the tasks drilled down
– You have all the team assigned
– You have a way to post updates and manage tasks
– You have a way to flag issues and blockers
– You have a way see what’s happening from a bird eye view

Without going full Agile – never go full Agile, everything you put in your PM tool should be straightforward. 

Any task needs to have a definition, criteria, and end goal. It needs to have a due date and it needs to be attainable. If a task is not able to be completed, there needs to be a reason why.

And then the most important thing, anything related to a specific task, MUST be documented on the task. Not in email, not over slack, not on a call. Document first on the ticket/task, then mention it elsewhere, otherwise you’ll lose track faster than you can count to 3.

Lastly, there should always be a place that is a ‘look at me, I am in trouble’ for your Project. These items should always be the priority of your daily/weekly check-ins.

Project Management is tricky, and a lot of folks adopt massive frameworks for 5 pager websites. My advice to you would be to start small, then scale big.

If you’re working on very complex software, invest upfront in documenting everything that needs to be built out before committing to the work. You can find help with that here.

Client Management SOPs

Managing clients is the bread and butter of any Agency. After comms and projects have been flushed out, now you need to decide ‘how much’ the client should know about.

Here’s the number one mishap most fresh Agencies commit – communicating ‘too much’.

Too much?

Isn’t that a good thing?

No it isn’t – here’s why. If you are sending your client 10 messages a day during the project with little or no beneficial information. What will happen is
1 – They will get into an habit of expected an update every 2 hours
2 – They will get desensitized to the importance of the update

Think of notification fatigue, similar concept here.

What you send to the client should be meaningful, impactful, and a good use of your and their time. Sending meaningless updates might be good in the short term, but what will happen in the long term is you burning out figuring what to send next.

Managing a lot of clients can be done efficiently. Below are the top areas of improvement if you want to manage your clients better:

How many check-ins to have with your client?

Have at least 1 (no more than 2) check-ins a week. This MUST be over a call and the client MUST show up. This will ensure accountability from both sides while giving the team enough time to come up with valuable progress updates.

The Agenda of the check-ins should always be this:
– Here is what we have done so far
– Here is what is up next
– Here is what we need from you to progress on XYZ
– Any other discussion items the client might have (keep em short)

Once the check in happens, ALWAYS send a documented message with the recording of the call to your client.

Ensure the right team members face your client

Always ensure that the client is meeting only the team members who are able to manage clients. Don’t put your developer or designer directly in front of the client without anyone to protect them. The dev and designers job is not to talk to your client, their job is to work on the requirements.
You need a PM (or someone with similar responsibilities) to shield and filter what gets passed on as a requirement. Too many agencies put people on the frontlines who have no business being there – good luck retaining good talent that way.

Now this isn’t to say ‘never’ put devs or designers on the call, this is just to say to always have someone on the call who will ‘manage’ the client.

Documentation is the key to your client’s heart

Document every word – sort of. Clients love changing their words. And it’s usually never intentional. They are just excited about their next big project, they are excited to see updates, they are excited to see what you deliver – and that excitement can sometimes incite miscommunication. Anything that needs to be on the record, needs to be recorded. 

If you’re using a PM tool like Basecamp, it’s super easy, if not, then documenting them in a doc is the next best thing. Have a record of every requirement the client has made and give them visibility on what was discussed.

This document can be updated every week during your check ins as well.

Progress Tracking for your clients

Learn how to show progress when there is nothing to show. During the design process, everything happens fast, designers tend to work fast, and the results being visual makes the client think the same speed will be there during development. 

It won’t be.

Given the designs get approved fast, development then actually becomes the more extensive part in most projects. Because there is no such thing as code once and run once. You will run into countless issues when doing development and that may stir up concern in your client.

You and your PM team need to learn how to space out updates to give enough time for all team members to perform their best. You also need to pace out feedback appropriately so that the client is not overwhelmed and gives you the approval – only to reject it later.

If you have 10 designs ready, share 2

If you 3 modules have been developed, share 1

And repeat every 2-3 times a week to keep the feedback steady. This number again, is for small agencies, working with small clients/teams.

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Team Management – The Day to Day for You

After you have put in some time developing the SOPs for what happens with your comms, your projects, and your clients – here’s what’s next – how does your team work day to day?

Let’s go back to the standard setup – It’s you, the PM team, the design team, the development and QA team. These teams need to work together in order to generate maximum ROI for the business.

The number one pain of these teams will be this – context switching.

Most agencies will take on multiple projects, and will have team members working on multiple things – at the same time.

Take out process and organization from this, and what you get is constant chaos of deadlines being missed due to unknown reasons leading to confirmed client dissatisfaction.

If you got this far reading, chances are you are tired as well, of taking on too many projects and managing a lot of hassle. Here’s how to optimize for success – with some basics.

Below are the list of activities that you need to take on as an Owner. These activities will serve as proof if your SOPs are performing or not. And where you need to adjust and iterate.

First of all, it should be clear to never take on more than you can chew. If that’s done then here are the things you should consider integrating in your day to day.

Have a bird eye view for all your projects

Depending on the tool you use for PM, this can be done in several ways. The key thing that should be visible in your bird eye view should be the following:

1 – List of all active members on the project
2 – When did the last client check in happen, is it documented? Where?
3 – What is the current workload on the project
4 – What is the expected delivery of the current phase (design, dev, etc)
5 – Is anything pending feedback or approvals?
6 – Is anything on fire and needs immediate attention

These points can be achieved in various format, but you should get an idea on what to focus on for each of your projects when you start your day.

 Say Hi to the team

It’s simple, it’s effective, it’s helpful. Now if you’re doing daily standups, the Hi can happen there, but if you’re not, then you must take some time to write a Hi and ask for any issues or blockers from the team. I have mentioned before also, everything should first be documented on the task/ticket then shared on Slack or Calls – this Hi can help you gauge if that is happening or not.

Prioritize 2 Projects

As an Owner, you will already have your sales calls, and your internal calls setup. So with the only time you have left, take the chance to give some love to 2 projects that matter the most. 2 a day, 10 a week. Easy to manage for any one person. The goal of this time should be for you to do a deep dive and make sure everything is running smoothly within the Project. If you find issues, DO NOT micromanage and start a message war – instead gather your findings, and save them for your weekly check in. This way you allow some time for correction, and avoid unnecessary headaches.

Check Recent History

Any tools you use for dev, design, and PM should have an Activity or Updates history tracker. I am against micromanagement, but a keen eye on tools being used is always optimal. What you need to look out for is ‘lack’ of any activity rather than less or more activity. Again, if you see massive gaps anywhere, document, compile, and discuss with the team after an appropriate amount of time has passed.

Gather Feedback

The best way to improve working with your team is to ask them what needs to be improved. As an Agency owner your ears must always be open for feedback that can help your team. You are already working in a small team, so don’t worry, they won’t ask you to buy a 10,000 USD CRM, most blockers the teams usually have are related to transparency or documentation.

As an Agency Owner, you need to keep an eye on a lot, with time you can hire people to keep an eye on you. But till then you need to know where the gaps are so you can fill them. The day to day time commitment you make to your Agency should be productive in nature. If you find yourself diving deep into every line of text written by a team member, it means a failure of process or a failure of competence – simple as that.

You need to install checks and balance on all developed SOPs, at first it will be manual effort by you, and then it should be outsourced effort by either your team or the tools you use.

Standing Out as an Agency

Now, you’re an Agency, and I work with Founders. Here’s the number one complaint I have heard from founders burnt by agencies:

They went straight to development without any discovery. And then they failed to deliver on what was promised. I felt like I was lied to.

And how can you blame them?

A lot of Agencies out there claim ‘we do everything under the sun’. And unfortunately a client would often fall for that kind of claim. This painful cycle of over-committing and under-delivering is frankly the biggest reason why Agencies get a lot of hate.

If you dive deep you quickly find out that the Agency they worked with had no process, no visibility, no communication and just had a fancy website which convinced them into paying up hundreds of thousands.

As an Agency Owner you might be dumb founded if these clients even exist, and yes, they do, and what they just experienced is working with an Agency on the verge of an exit.

You can only have so many dissatisfied clients after which your road is blocked. You close up shop, and perhaps decide to sell courses on how to run agencies.

But if you don’t want to have dissatisfied clients, here is my proven process.

You gotta start off on the right foot, which means, you gotta understand your clients as much as possible. Which also means, you gotta stop working with clients that won’t be a good fit for you.

How do you do that?

Questionnaires and Intro Calls

You can easily prompt AI or google how to build onboarding questionnaires, and how you handle calls can be covered in another article some day. But the main goal should be to get an understanding on:

– What is the background of the client
– What is the client’s past experience working with Software Development
– Are there ample resources available for Project success
– Is the project in an industry you can deliver on
– How many stakeholders are on the project
– Will the client commit to providing feedbacks and approvals on time

See, when starting out, Freelancers and Agencies take on anything they get. But if you have to level up, you have to niche down.

The number one strategy that works for any business, any product, and yes, any agency is to figure out what they are good at, figure out who needs that, and then sell a whole lot of it.

And saying you are good ‘at everything’ means you aren’t exceptional ‘at anything’.

Onboarding the right clients matters a lot as you grow since you get to decide, who to choose, and will it align with your long term goals.

My advice to you as an Agency Owner is to figure out your core capabilities and build your services around it. Target clients based on your core and once you get them – THEN – upsell them extra services if needed.

But in your branding, your process, your messaging, your everything – you should have a consistent goal of delivering a solid solution to a defined problem.

If this guide was helpful in figuring out how to evolve your Agency, great! 
If not, then I am always here to help – shoot me a message.
And as always –

With or without my help – I wish you the best.

As your business matures, you need someone to come in and offer diverse help

  • You need someone who knows enough to “execute faster”
  • You need someone who “gets the job done”
  • You need someone who adapts to “how you work”

I am your best bet for quicker results.
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