Every industry has a set of challenges that businesses must overcome in order to achieve greatness, and digital/creative agencies are absolutely no exception. We’re no strangers to these challenges either: thanks to our work with digital/creative clients, we’ve become clued up on what they must overcome every single day.
During the snazzy re-design of our website, however, we had the opportunity to experience these challenges first hand. We sat down with the ever-amazing branding experts at Project Simply and our brilliant website building friends, the Profitable Firm to discuss the issues most common for agencies sharing their arenas and received some interest nuggets of information.
Once our discussions had finished, it became clear which were the eight most prevalent challenges, but now we want to know: which of the eight is the greatest challenge for your agency? Read on and then tweet us at @MyAccountancyPl to share your thoughts!
Time
The main issue with time is that there’s simply not enough of it! Although this isn’t a worry exclusive to digital/creative agencies, it’s more profound in that you simply can’t rush creativity and expect great results. Factor in the day-to-day running of a busy agency and the need to keep on top of your workload, and it’s easy to see that time really isn’t your friend.
We found the greatest aspects of this challenge were:
- Managing time effectively and productively,
- Recovering time spent on bookkeeping and accounting,
- Understanding the difference between value added and time spent,
- Learning to prioritise and organise projects effectively,
- And tracking the team’s time, to better measure productivity.
Tech
Software and technology form the backbone of your agency – without them you can’t really be a digital creative or deliver the services your customers require. But tech isn’t just for the creative side of things: it’s more than likely that you’ve used tech for the business side of the agency too – and it’s sometimes a hindrance more than a help.
We found the challenges in tech involved:
- Keeping up to date with the latest software and technology releases,
- Being swayed by what’s cool over what’s useful,
- Automating more menial tasks successfully,
- Integrating all your apps and software effectively,
- And customising tech to address the needs of your customers.
Team
Your agency team really ARE the business – they’re the driving force and without the right people on board, quality of work is quickly compromised. Focusing on successful recruitment and engagement is a huge element of running an agency, but it’s still a huge challenge for many.
Some agencies struggle to:
- Find the right creative and support people to join the team,
- Make a choice between employees or freelancers and contractors,
- Offer the right incentives – both financial and non-financial – to potential employees,
- Cope with a poor fit from a new employee,
- And keep a clear focus on keeping teams happy, motivated and working hard.
Tax
As we know better than most, there are only two certainties in life: death and taxes. With that in mind, having a good long-term plan for your tax strategy is not only necessary, but a crucial part of making sure the agency is profitable and able to grow successfully.
The challenges around tax involve:
- Withdrawing income in the most tax-effective way,
- Retaining enough cash in the agency to pay your tax bill,
- Understanding relevant tax relief (the R&D Tax Credit, for instance),
- Staying up to date with changes to tax law,
- and having a workable tax strategy in place, complete with clear tax planning.
Cash
Cash is the petrol in your agency’s engine – without it, you’ll quickly lose your forward momentum and grind to a serious halt. That’s why it’s important that you understand how cash flows into and out of the agency – and the best ways to keep that cash pipeline looking topped-up and healthy.
The main areas of this challenge are:
- Making enough money to pay yourself and your team’s wages,
- Knowing how to invest and save when you do have a surplus of cash,
- Being tough on late paying clients so that you don’t rack up debts of your own,
- Considering cash flow, not just what’s in the bank.
- And maintaining a Plan B in case more cash and funding is needed.
Profit
This one speaks for itself; if your agency is going to achieve financial stability, and find the funds to expand and grow, then you need to be making a profit. Creativity may be the main driver, but profitability has to be built into your agency model too.
The challenges with profit are to:
- Understand your margins and set the right price points,
- Generate enough profit for the business to survive and grow,
- Know the difference between cash flow and profit,
- Think smarter about profitability ,
- And measure profitability using the right metrics and objectives.
Growth
You may have started out with a home office for one, but ultimately your goal is likely to be to expand and evolve the agency into something bigger, better and even more creative – and that means growth!
Our discussion told us that the challenges with growth are:
- Pinning down key growth goals and their importance,
- Creating a workable growth plan with clear milestones,
- Balancing the need to make profit with the funding needed to grow,
- Building scalability and systematic processes into your model,
- And creating a team that shares your vision and can deliver growth.
Pivot
We’ve got ‘pivot’ down as a future buzzword, but for now you may be more familiar with it as the feeling when your agency begins moving in one direction, only to change course as new opportunities make themselves known. Essentially, what remains is your base business model (or products/client/idea), only it’s now pivoted to a new area of focus.
With a pivot, the challenges are:
- Being alert to new opportunities and take advice on their impact,
- Considering what you do well that can be extended to other needs your clients have,
- Evaluate how to make exchanges with your customers more valuable for both parties,
- And review recurring revenue options beyond the initial project.
Know Your Challenge and Conquer It!
So, which of those eight challenges rings true for your agency? Knowing where you need to make changes is the first step to bringing about that change, so if any of these challenges have jumped out at you, you’ll know exactly where to focus.
The key with tackling these challenges is to take things one step at a time; prioritise your challenges and focus on one area of improvement, rather than getting bogged down with mass change all at once. It’s that kind of timely, systematic approach that will help bring true success to your agency – and show those challenges who’s boss!
Is keeping on top of your accounting and bookkeeping a challenge for your digital/creative agency? Feel free to get in touch, and we’d be happy to discuss how we can help!
