Many agencies are born from a talent for “the craft” they will deliver. A talented designer founds a creative agency, a gifted programmer starts a development shop or a PPC expert starts a paid media agency. Each of these founders (and scores like them) shares a common starting point: a profound expertise and passion for their particular skill. But as many quickly discover, having a deep understanding of the craft is just the beginning of their entrepreneurial journey and in no-way a guarantee of success.

Turning expertise into a successful business requires more than just technical skills; it requires a fundamental shift from craftsman to entrepreneur. Even founders continuing to work “on the tools” in their new agency will find their role changes very rapidly and demands a host of new skills and knowledge. Most founders know this when they plan their change, yet most still either underestimate the size of the shift they are about to experience or lack visibility on the detail of what that means.

The priority gaps to fill

My role as an agency advisor often involves filling some of these gaps: bringing commercial and operational experience to complement the founder’s craft skills and vision. Through this article I want to lay out what I see as the most common overlooked areas that founders need to strengthen quickly. I’ve presented these in a vague order of urgency for most new founders; giving new founders a roadmap to beating the odds and making a success of their new venture.

1 : New Business

Priority one is New Business. Even if you are lucky enough to start up with a client or two in the bag, your new agency will not survive unless you can work out how to bring in more work. You can’t be over reliant on too few clients who could churn at any time and you probably have aspirations to grow beyond those initial clients anyway. New business becomes even more important if your model is project based rather than retainer based and requires a constant stream of new contracts just to stand still.

The demands of new business is often one of the biggest shocks for new founders, particular those who have come from roles where they were previously sheltered from it inside a larger business. You’ll need a plan that can bring in quality leads at a suitable pace but that suits your skills and resources. You’ll also need a process to turn those leads into paying customers.

However much new business activity you think you need to hit your targets, I would advise doing 50% more. Building redundancy in to this activity gives you the opportunity to select the best clients to suit your goals and also helps you ride through periods where issues in the wider economy suddenly tank your conversion rates.

2 : Basic Financial Control

Finances are the area that founders love to ignore. Don’t. Even if you  have great support from an accountant you need to have your own eye on the basics. At the very least you need to have visibility on:

  • Cashflow
  • How profitable your clients/projects are
  • Your overhead and liabilities

These things can seem daunting if you are not used to dealing with them, but they shouldn’t be. Assuming you don’t have an Advisor or FD helping you with these things, have your Accountant or Bookkeeper set up clear reporting and explain how to use it. I frequently see businesses neglecting this aspect. A common issue is believing that because they have an accountant handling their annual return they have this covered. Unless your accountant is producing monthly management accounts and you are having a monthly meeting where they go through them, that almost certainly isn’t the case. That means that any issue can take months to come to light, after which it can be incredibly challenging to fix.

Getting control of your finances is vital, but doesn’t have to be complex. A simple spreadsheet could track all of these things, or learn how to read it from your accounting package. I advise agencies I work with to actively go over the numbers with someone monthly as the act of discussing them ensures they don’t get ignored.

3 : Strategic Thinking and Planning

When you own a business you also own the big picture. That doesn’t just mean having a vision of what it could be, but testing that vision, building a plan to make it happen and having contingencies in place for when it doesn’t. It’s common for businesses to pin down their vision quite early, but not connect it to the daily business as usual for some time. Sometimes even years. To connect the parts you need a robust vision, a realistic plan and process in place to make that plan happen. These things require a mindset that many people don’t learn until they run their own business, so get working on it early.

One way of tying vision to action is to use a system that encourages focus on short term goals that are aligned with the long term objectives. We used EOS (The Entrepreneurial Operating System) in my own agency, although I now favour a process based on OKRs. The method is less important that setting aside regular to time to focus on this “Important, but never urgent” work.

What else is missing?

No matter how good you are at the craft of what you do, business with be tougher if you don’t build those three critical skills. 60% of new UK businesses cease trading in their first three years, and I wholeheartedly believe that blind spots in the three areas above contribute significantly to that number. As the business grows the need to build new skills will continue to grow with it. You’ll likely have to go deeper on the three areas above (or bring in others to do so), but you’ll also be called on to answer challenges in Operations, HR, leadership and more. It’s no surprise that many founders find themselves occasionally longing for the simpler life of focusing on their craft that they left behind!

The shift from expert to entrepreneur is a continuous journey of learning and development but shouldn’t be an overwhelming one. Start by using this guide to help identify the gaps in your current skillset and prioritise what is most important and urgent to your business. Dedicate time to making regular small improvements and closing those gaps. It will probable be difficult to honour that time you set-aside when clients get demanding, but if you have gaps in these areas closing those gaps might be the most valuable work you ever do in your business.

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