Eric Deeran explains why agencies stay stuck with one owner doing all the work. He shows the math: 3,000 work hours per year is your ceiling unless you hire. The fix is retainer packages with 70-80% margins, convert existing clients, then hire a salesperson to fill the pipeline so you can step back.
If you feel like your business would stop working if you took 2 weeks off, this video is for you. And I see way too many agencies in the same position where they say, hey, if I took 2 weeks off, you know, I would, I would, my business would completely obliterate. And the truth is, is that's not a business, it's a job. And I was in that exact same position before. And so like, I know what it feels like, but we need to talk about how to get, how to actually get out of that, right? right? Because if this is you, and I just did a sketchpad on this, so I'm gonna kinda show you some of this. You're probably doing all of this stuff. You're probably doing editing, client calls, admin, sales, upsells, delivery, revisions, everything, right? And the problem is, is that everything gets capped on your hours. So like, once you run out of hours, you run out of time. You become the bottleneck, right? And the trap is, is that like, you probably can't read this that well, but it's like you can't hire, you're too busy to sell, and you can't afford to do any of these things because you're too busy doing everything yourself because you don't have enough margin. And it's this kind of like cyclical loop that just goes around and around and around and around and just puts you in a really tough position to where you're kind of at this revenue ceiling that you can't break. If you take a vacation, you have to work most of the vacation. I've done that, it sucks. It's I would not recommend it. You have no systems because nothing works unless you do. And you kind of feel like you've built this like cage for yourself where like you're making some money, like maybe $10,000, $15,000, $20,000 a month, but it's not really like enough for you to be like, it's worth all this time. And then God forbid you have a family, kids. Like I just had my daughter 7, 8 months ago. And like, I couldn't imagine if I was still doing that grind because like, it is a tough position to be in when you have family that you want to spend time with as well. Because they don't really understand why you're working so hard too, and it's like you're just going around and around and around. And like, I just make this video to show you that there like is a better way, and I wanna kinda explain how you can go about doing it. First, I wanna talk about how it gets worse though, sorry. Like, it gets worse because as you scale in revenue, you reach this like ceiling where you can't do anymore, and you basically run out of hours up here to where you have like no more time, right? And then that's where you're like, I'm busy, I'm making some money, but I hate my life. And like, I just want to burn it all down. And like, you kind of have this, like, I had like a crisis when I was like, dude, I hate this. I don't even want the money anymore. I'm just tired of working every hour that I'm awake, right? And I think it's a tough position to be in. And the math works out to be like, if you have 60 hours a week, right, that you work, and then there's 50 weeks a year, that's 3,000 hours. Like, 3,000 hours a year is what you're going to cap out at. So whatever you get paid hourly, so 3,000 times your effective hourly rate is what you cap out at, at your revenue ceiling. And like, that's where you literally can't make any more unless you hire somebody to buy some of their time as well. Um, now I want to kind of talk about what you can do to fix this, right? Because it's not all doom and gloom. Step-by-step plan to actually fix this. Number 1, we want to package and price a retainer-based offer. Like, most of you guys are selling based off of what you feel you should charge and not what you actually need to charge to make money to hire other people to do the work, because you do all the work yourself, and so you feel like you should charge less. But when you were going to— if you were going to look and actually hire somebody, it would cost you a lot more, and you'd have to price a lot higher. And so I want you to do this exercise. I want you to look at your packages and say, do I have 70 to 80% gross profit margins on my packages? Meaning if you sell a $10,000 package, does it only cost you $2,000 to $3,000 to fulfill on that $10,000 package? If that is the case, then great, you're at 70 to 80% margins. If you're not, you need to likely raise your price because we need margin to hire people and then still take home money. In the business. Um, number 2, we need to be able to convert clients and then hire our first couple of people. And so what I would do is go back to all your existing clients and basically pitch these retainers that you've made and try to close 2 to 3 of these so we have some cash in the door to then be able to go and hire these people and pay them. And then number 3, we need to build an inbound system and then finally step back. So we need to launch ads, hire a salesperson to call these leads, talk to them on Zoom, close them on our package. We need to fill that sales rep's calendar, and then we need to repeat this cycle over and over and over again. That's an overview. I hope it helps, but most of it comes from you're not charging enough, so you can't hire people to do the work for you, so then you have to do the work, and then you still don't charge enough, and the cycle just goes around and around, and around and around and around again. And it's— it— I can tell you from experience, it's exhausting. So if you take away anything from this video, try to get to 70 to 80% profit margins. Otherwise, you will continuously be stuck in the business with not great margins. Your overall profit margin in the agency should be 45 to 50% after all of the expenses. And so like, look at your P&L, and if you're not there, you likely just need to raise your price. Like, that is the easiest lever to pull. And obviously, maybe some structural problems within the business as well. That's something we help with. So if you want our help doing that, there should be a link below this video. You can book a call, see if we can help. And hopefully this video was helpful for you. We'll see in the next one.
