The 10 FTE Wall: How to Scale Your Agency Past 10 Team Members

Hello, hello, hello, everyone, and welcome back to Agency Journey. I am very much not yet bored with saying that. Still super excited to be hosting this for you today and a lot of other times Besides, my guest today is Gray MacKenzie Zenpilot, founder, CEO and previous agency Journey host. Gray, how are you doing today?

I'm great. You saying hello. Hello, hello. Do you think there's a point in time where you would let that go?

Let that?

I mean, not. Not say it anymore? Like, can you foresee that point.

If I become old and jaded?

Yeah.

Disappointed with life. I asked.

So we moved to Mars a year ago, and. Yeah, almost exactly a year ago. And I still will say jokingly to people when they ask where I am, I'm in Mars. But I'm not saying it. I'm saying it jokingly, but also not jokingly. It actually is serious. We moved to Mars, Pennsylvania. And nobody really quite knows how to respond. Some people have laughed right away, and they're like, ha, ha. So it's crazy week, huh? Other people have been like, is there a punchline that. I'm like, did I miss the punchline? Are you just terrible at jokes? Do you not understand how this works? We're in Lars, Pennsylvania. You know, we're outside Pittsburgh. But I think I'm. I think I'm hitting the, you know, the. The best buy date on that joke, and I think I need to let that one drop here pretty soon. But I think you should stick with hello, hello, hello. I think that's a great. Like, it's awesome to have something right away that gets one. I think it's. If you've never heard you before, it's exciting. Two, it pulls you right back in if you got it. So it's a great tool.

Yeah, you know, it's like, it's an accidental personal brand, to be honest. Like, I didn't think this would become my thing, but I was snooping on one of our Arvoma recordings recently. It was one of our team hangouts, and I joined two minutes late. And Sean on that call said, hello, hello. And then somebody responded like, oh, watch out. You're almost encroaching on Kuba's territory there. Yeah, I found that so funny, you know, but. Yeah, exactly. I even put it in my. In my LinkedIn tagline. Your line about Mars. Yeah, I can see how that might get a little bit old. You can start calling yourself a Martian. I don't know if that's what people from. From Mars, Pennsylvania do, but the high.

School mascot is the Planets, so You got Martians for sure.

That's cool. That's cool. Okay. Awesome. Awesome. Well, I wasn't expecting this episode to start in that way, but yes. Welcome everyone. Welcome back to Agency Journey and let's start talking about agency stuff. We've got a very special episode planned here today because we'll be talking about a very particular point in time in an agency's growth. We want this episode to be like a perfect fit for somebody in a particular stage of their growth. And the topic for today is the challenges of scaling your agency past the point of 10 FTEs. So kind of where we'll be on the timeline and hey, maybe this will become a series. Let us know if you like. This is, we'll be talking about the point where you're reaching 10 FTEs. Maybe, you know, 12, 13 FTEs, full time employees. You would say equivalence, right? Because it might be like two half time people equals one full time equivalent. I would like to pick your brain gray about this to talk about what changes in the mindset, what changes, practically speaking, for an agency of that side. So it can be almost like a handbook. If you're right before that point, you can prepare. If you're at that point, you can self diagnose your business, you can check the problems we'll be talking about today, which ones you've got, and hopefully find solutions. So that's how I would paint the topic of the episode for today. Great. Where would you like to start? You know, how would you start painting that picture of what changes at that point of an agency's, pardon the pun, journey of an agency's growth.

I hope that this is, I hope for folks who are listening, who are well past 10 team members, this is kind of fun to look back on. Wow. I did, I grew up, I went through that. And for the folks who are listening and they're at, you know, 2, 3, 4, it's just, it's just one person starting this thing and they've got some contracted help. I hope that this is also a helpful peek ahead and like, oh man, this is what I have to look forward to and I can get a jump start on it. And for folks who are going through it right now, I'm hopeful that this resonates with them and that they shoot you a message or shoot me a message on LinkedIn and say, hey, that was exactly what I needed to hear right now and I've got a question about XYZ from that or I totally disagree and that has not been my experience. So send us all Those.

Yeah.

What are the challenges as you reach that point in time? I think this is going to break down into two main categories. I think you've got like what's happening to your psychology to say all of the problems, all the issues in an organization stem from the psychology of its leader. So I think that that is one of them. And then I think there's the kind of the tangible, like what day to day in the more physical sense is changing. So do you have a direction you'd rather go down first or anything else that you'd rather go point out? Before we take one of those two.

Paths, let's lay down one small thing first. Tell me about kind of the state of the agency, the likely state in terms of the org chart, maybe kind of the composition of their clients. Is this an agency that is likely to. I feel like that's like a watershed point for a lot of agencies pre positioning or like niching down and kind of post, you know. So take me through. I'm particularly curious about like we're talking 10 FTEs, 12 FTEs, but like who are these people? What kind of roles, what seats are filled, what hats are still on the agency owner's head? Take me through a little bit of that and then we'll kind of pick one of the two paths you mentioned.

Yeah, I'm going to say let's just assume this is, and this is the majority of people who are listening. This is the first time agency owner. This is not someone building this business for the second or third time.

Right.

They still have their fingers in a lot of different parts. Almost certainly most of the sales are going through either the owner or a partner in the business. If there's multiple owners, probably some of the marketing, if there's any active marketing work that's happening is on their plate as well. It is rare at this point that they're 100% out of delivery. They never touch a client account unless there's multiple partners. But most likely they're sitting in the account management position or strategy position at a minimum for at least a couple of key accounts. And then most of what's happening operationally is falling on their shoulders. So they're the person who's figuring out, oh man, how do we do workers compensation insurance. And I've gotta, I've gotta figure out, you know, that random thing and you know, I'm, I'm working with the bookkeepers to scan through the numbers each month or I'm at least checking my bank balances every day to figure out, figure out if things are good or not. So they're, they're touching a lot of different things in the business. When someone sends back a. A contract that got sent out to a prospect and they come back with changes, that's almost certainly going to this person to make whatever decisions have to get made about, oh, yeah, we're fine changing that or not changing that or, you know, deciding on terms.

Okay, so you're saying they're not completely out of delivery, but part of that org chart, part of those 10 FDs is you've at least managed to delegate some of the delivery.

Much more common that out of those, out of the, out of 10 team members. Yeah. Seven or eight are on the client services side for sure. If not, pretty much everyone.

Okay. Yeah. So I was curious about that because I was wondering, like, we're. I kind, I think we're kind of leaning into the psychology path to, to begin with of, you know, what is still kind of a direct burden on their shoulders, the agency owner's shoulders. So let's go in that direction then. You've hit this point, maybe had a little bit of a celebration, like, hey, employee number 10 just joined, or number 11, number 12, maybe. Sometimes I see those kind of growth spurts where it's like three people at once because you've decided to scale. So what changes in the mindset or what should change? What are the thoughts that are kind of going through that owner's head, and are they the thoughts that should be going there, or is there something else that they're typically not paying attention to that they should be?

Right? So this, the number's not exact, but 10ish is a sticking point for most teams. A lot of teams scale very quickly to 10. 30 is another big transition point. And that might be, you know, you might be feeling a lot of this and resonating with this at seven people, and you might be at 12 people and resonating with us, but it'll be somewhere in here. So a couple things are happening. One is just the general feeling of overwhelm. There's too much to be done. You can't do it all. The way that you got here, especially if you've grown quickly, is because you delivered a really good service. Now you're not doing as much of the servicing yourself. And results are not as good as they were originally for many folks. Some folks, by the time they're at 10, 12 people, they've got better, more qualified folks. But often results are slightly worse for your clients. And, you know, the potential's still there, but you haven't unlocked. Like how do we have this consistently happening for clients? It's really frustrating to not live up to your potential from a client services perspective. And part of the overwhelm is knowing the same way that you might not be fulfilling at the level that you want to for your clients, you're also not supporting your team the way that you wish that you were, especially if you're a solo owner. This is a stressful period of life because there's a lot of folks who could really thrive. They've got a lot of high potential. Often hiring people early on, you're taking bets on folks who have hopefully some high upside, but they may not be a conventional. You're not hiring the account manager who's been an account manager for 15 years. You're hiring the junior account manager from another firm or somebody who wasn't even an account manager before. And you're bringing them in and trying to, trying to push them into a role here. So those people need a lot of support and coaching to reach their potential and you don't have the bandwidth to give that to them. And so that's happening on one side. On the other side, the big pat on the back that you ought to give yourself but most don't is you never thought when you were starting this thing that you'd be at 10 people someday. And so the type of revenue that's there, the type of profitability and what you're earning looks very different. And this has downsides as well. But these are all good problems to have the fact that you've grown to this rate. Now I'm as we're talking today, I'm not primarily talking to the person who says 10's the limit. I told myself I could have 10 people on the team and then that's it. We're only, we're serving seven clients. That's all we'll ever serve. And when we lose one, we'll be rotating in the next one. But we're always going to be in this five to seven client space. So I'm not talking to people who put artificial caps on their growth. I'm talking to people who are either in the boat of and I'd say this is the vast minority. But hey, we are building this to be a huge thing. I'm building, you know, an eight figure agency here and that's like I'm going to get there, I'm not going to do it. Or much more commonly, hey, there's no artificial cap on growth. I Want to be ambitious, I want to reach my potential. I have no idea what it is. And so I'm going to try and keep growing. But you know, if that means that we are at 20 people next year or if that means we're at 12 people next year, that's totally fine either way.

So kind of connecting a few of the things that you said is on the one hand they're overwhelmed with the current situation already you mentioned like they were delivering directly with excellence, but now they need to of teach the team to direct to that level. Also like they wish they could spend more time on coaching high potential team members, but they're not finding that time. But the appetite for growth is still there. They're not done growing yet. So they might be thinking okay, but 10 is so hard and overwhelming already. How the heck do I get to 30? How the heck do I keep growing? Is that, am I on the right track here?

For sure, Yep. And part of that appetite for growth is happening because you're being exposed to all throughout life we break through different mental caps that we have and we have new unlocks. And one of those is I was making nothing. My only job was could I pay my for my salary by going out on my own. And now I'm almost certainly working a lot more hours, I'm more stressed. But I've at 10 people I, I've unlocked a level of income that I didn't even think was possible. Like if I took what I was making before and I doubled it, I could see a path to that. I couldn't see a path to making what I was making before. And then 4Xing that and now I'm making a lot more money. And this is not always the case. Sometimes folks are at 10 people who should not be at 10 people and they're making exactly the same amount of money that they were before. But hopefully you are also unlocking new personal income streams that are, that are feel like oh my goodness, I've made it at first. And then just like anything else in life, the longer you're there, the more that your burn of that starts to increase, your awareness of the problems that come along with that start to increase. And so, and your exposure to people who are in that same level, like who are playing at that level also increases. And so then your appetite gets bigger and you want to more because that's the natural path of, of humanity is like we get exposed to something, it seems like it's the best thing ever. That high wears off and then we're off to the next hit of dopamine that we can get. And so all of that is happening at the same time, and you're now at a place where to just do this again. To keep playing on repeat at 10 people is not for most people. It's the very unusual person who. Who got into this business, grew to 10 people, and then says, okay, that's it. Like, I'm. I'm staying right here. Most folks want to grow and feel a need to grow to maximize their potential. They say, hey, I've not tapped out on what I can do as a leader. So those are some of the things that are happening to us mentally at and around this phase of 10 team members.

So what I'm curious about is, and I wonder if this is the kind of format you want to go with here. But what immediately springs to my mind is you painted the picture, I think, beautifully, of what's going through the mind of an owner like that. I mean, I could feel that even myself, even though I've never actually been in that situation. So they've got, you know, they've unlocked this level of income. They've got this appetite of. For growth that you mentioned. At the same time, there's this overwhelm. What would you say to them or what would you like to put in their heads to, you know, for that psychological stress or, you know, that emotional burden to lessen or, like, how would you steer them that.

Yeah, well, so I left out one of the key stressors, which is they also have a payroll that is equal to or higher than any amount they've made annually before in. In a lot of cases or. Or close to that on a. On a monthly basis. And so they're feeling the fragility of. In some cases, boy, this grew really fast. I got here in two years, or I got here in a year and a half. Shoot, what if the revenue goes away? And now I'm responsible for these people. And now, like, this could. This is all here. This is awesome. That it' I'm realizing how much bigger I could be playing. My appetite has been wedded, and at the same time, this could all disappear very, very quickly. And I've got all these people who I'm responsible for. So that's one of the additional stressors to it. And that's augmented by the fact that I'm not coaching people as well as I could be. There are much better coaches out there they could go work for. They could go find and make those connections, and they can go work there. And I'M not serving my clients as well as I'd like to be. And they could go find other solutions and go take their business somewhere else as well. And so you're, you're feeling the fragility as well. And so the first thing that I would like, the main thing that I would say is absolutely true. It's all fragile. Absolutely true. You've done great work to get here. Congratulations for this. Absolutely true. You can play much bigger. All those things are true. The bigger lesson is what's the skill sets that you're learning? Like, how are you developing and approach this as a, hey, I'm developing and improving my capacity. This all might continue. I might 10x this business and be at a hundred people in two years and make like. I might look back and just laugh at the fact that I thought this was a lot of money now.

Right.

Also, this could all crash and burn. And either way, I'm developing a skill set. And so what I'm really here to do is work on myself and maximize the potential that I've been given to impact the world. So some people that will not relax them at all, hopefully some people that helps to take some of the pressure off and say, that's what I'm really doing here is I'm stewarding my potential and not stressing about what are the results that are going to come from this. I'm going to create the highest probability, you know, situations for success according to the vision back to our Clarity is Kindness episode that we did recently. You know, I want to, I want to create the maximum odds of us reaching the vision that I've set out for people. But it may or may not work out that way. And like, we just kind of need to surrender that and say, hey, we're. We. There are things we cannot control. The stuff that we can control is how we work on ourselves and, and our own potential.

I've got a friend who used to say, every day is a school day. That comes to mind. And I think it's a cliche phrase, but at the same time, maybe that's not going through the mind of an agency owner in that kind of situation. And from what I'm hearing from you, it should. I wanted to dig in just a little bit deeper here. So you're saying, you know, they should be looking at and focusing on the skills that they're building. Can you say a little bit more about what these skills are? Maybe list them, maybe own also kind of prioritize them in your mind.

So a couple of the skills that stick out right away. One is prioritization. You have to choose between things. The you are. If you haven't hit this point in life before, you're coming face to face with the reality that you've been gifted with a lot of gifts. You also have some weaknesses that have been made really apparent by this process. And there is not a. Up until this point in life, you might have thought that there was a world where you could of perfect balance that existed, where you showed up perfectly at home, you showed up perfectly at work, you showed up perfectly in your personal fitness, you showed up personally in all the different areas in terms of your relationships and things that you care about. And you had just this sweet spot of having just enough time to give to everything. And now you're being confronted with the fact that that's not reality.

Right.

You are not going to have, you know, it's, it's not. Life is not okay. 30 of my time goes here, 20 goes here, 40 goes here, and it just stays there and everything just works out. And that's not how life plays out. And so you're having to deal with, oh, I have to prioritize. And that's a dynamic exercise that I have to do on an ongoing basis. I've got to prioritize and put my work and effort towards the highest impact areas and the ones that will need the most impact. And I'm balancing time horizons too. What needs my attention most for this week or for this month, or for this year, for this decade. So prioritization is one that's there. The ability to predict is huge. The ability to make decisions like decide and commit, or some people say commit and decide, but decide and commit, like make decisions with incomplete information. If you're here, there's probably a good chance that you are more of a risk taker than less of a risk taker.

Right.

But regardless, I think almost everybody wants more information than they will ever have for making the decisions that they need to make. And so you've got to be building that skill set to say, hey, we've got incomplete information. That's okay. I need to make a plan and I need to lead people well. And then giving like clarity is kindness. To go back to that theme. The ability to be more direct, more clear and more kind in your communication is huge at this level. Both for your interactions with prospects and clients and internal team members and partners and vendors and everyone who you're interfacing with.

I love that. I'm really glad I asked that question. We're almost Building a curriculum here. I wrote down the list. Prioritization. You said predicting. So, like forecasting. Then the next one was decide and commit, or deciding with incomplete information. Like, if I were to point at myself, that is the one that I need to work on the most. I always want more information, always ask for more details, but I should decide and commit. And then being direct and clear, yes, I do recommend watchers and listeners. You go back to our Clarity is Kindness episode for a lot more on that. I really like that episode. So go ahead and check that out. And I feel like we spent a fair bit of time on, like, we talked about, like, two sides of this coin. The mindset side and then the operational side. So how about we flip the coin at this point? Unless you really want to stop me here. So tell me, you know, aside from the agency owner's head and mind and brain, what is happening, kind of practically speaking, in their agency on the operational side, where are they probably looking at?

Yeah, you're hitting the, like, you got too many people to manage directly now. So if you're a solo founder and almost all of that team is reporting directly to you, you're spending a good chunk of your week just trying to unblock your people or you're not serving them well. And you need fewer direct reports, almost certainly. So that's one of your top priorities. You hit this. The messy middle for most professional service firms is 10 to 30 people. You need the next layer of you've got too many people to report to you. You need the next layer of leadership. At the beginning of that range, you can't afford to pay the next level of leadership and have that, you know, the next layer there. But you need them to grow through it. And then they need time to bond. They need time to work together as a cohesive unit. And you'll make mistakes in hiring, for sure, and then some of those people will not fit and need to transition. And, you know, there's just all the challenges. And so you're starting to feel that here at 10 People, where it's like, man, I really need somebody else to come in and lead this. So. And at the same time, the more time that you step back with, because most of the work of growing the business, bringing on new clients is falling on your shoulders. And even managing key accounts, you really can't take that step back because this is a time where you need to be spending even more time investing in growth. And it's hard to create that amount of time and space for yourself as well. So. And that will be your unfair advantage as an owner is the ability to jump on a sales call and build a different level of connection, have a different quality of conversation than someone from your team. Most, most likely it feels like that's.

One of the quicksand kind of traps for agency owners. Again, not having been in the seat myself, I still heard so many stories of like. It feels like there's this element of like inertia or maybe it becomes a habit or, or a temptation where it's like, I've always got that in my arsenal. I know if I just join this call, I can close that client and my salesperson might not be able to. And I really care about that revenue. I mean, you made it really clear why the payroll, the fragility of it. All. Right. How can I afford to, you know, to actually let go of the wheel here a little bit? Let go of the wheel is not, not being the right analogy, but I think you get my general point. Shall we start kind of addressing already or is there more symptoms to look at here?

No, no, I think we can kind of take some of the symptoms as we, as we roll through it. So I've got a couple prescriptions. I'll let you interrupt me anywhere. I'll try and I'll try and pull you back in for a couple of these.

Okay.

First thing that I would say is if your desire is to keep growing, you want to look at this bucket of time, like, where does time need to go? And you want to maximize the amount of time going towards the growth side of the business versus the delivery side of the business for you personally and even leading team members, coaching and managing team members. That's one of the more impactful things that you can do. But you can't get out into a world where 10% of your time is going into growing the business. If you, if you've got ambitious growth goals, that needs to look more like 40, 50 plus percent of your time going to the growth side of the business. So the piece to move out of is client services, what we call delivery as quickly as possible. That's super hard to do. Some of this is tied to your own desires. What do you want? A lot of folks are in this space because they had a skill set that was desirable by the market and they were really good at whatever web design or copywriting or video production or something. If you love that and you're not willing to let that go and you thought about what you value and you want to be a creative or you want to be A developer you want to be whatever else. Like that's what you should go do and you should figure out how you're going to balance those things. And in that case, you need to minimize the time you're spending on sales or anything else. But if we just looked at a hundred firms, 50 of them have an owner who loves delivering on the work themselves and doing the work they love executing on the work. 50 of them have an entrepreneur who loves building a business. And that's the thing that they're building and that they're being creative with. And they're going to focus their time on growth and hire a team. There's going to be a much higher growth rate, a much higher ultimate enterprise value of the business out of the 50 who are more growth oriented.

Right.

We can argue whether that's right or wrong. That's just the truth.

Okay, I gotcha. So my notes are saying kind of on the operational side, your prescriptions, one is create the next layer of leadership. And the second one that I've got thus far is move out of delivery ASAP and focus on the growth side. You mentioned there might be a couple more there.

Yeah. So along those lines, getting out of delivery is challenging early on. And so you need strong systems. That's the gap that Zenpilot fills for a ton of teams is 100%. You need to free up the owner to get out of that space. That can't happen when you don't have mature systems in place. On the growth side, you want to spend as much of that time growing the business, creating quality conversations and having quality conversations, and you need to figure out how you can augment that stuff. So can you spend on. Can you run ads and put money into ad spend to buy back your time doing whatever else you need to do from a marketing perspective to create those conversations with dollars rather than your time. Know that and realize that the value of an hour of your time if you're growing is never going backwards. And it's quite a bit more. You probably have a blended rate. If you are bidding stuff out hourly or you're just pricing projects and it's all project based or retainer based. But you're saying, hey, roughly, this would be 30 hours of work. So we'll charge, you know, $4,500 a month for it. On average, your hour of time is worth more than that. And so this is a very challenging place when you're used to being the person who can just create unlimited supply of hours because you're willing to push in as much time as possible.

Right?

And you've got to be the person who jumps in and solves problems. When you have folks who they got hired to be a developer, they didn't get hired to go figure out how that hosting problem works. And so your mindset might be, it's unfair of me to ask them to do that, but the reality is the value for the business and ultimately, you know, the future that they can have as part of this organization as well. They're better off if you aren't the one who's figuring that out. So you need to understand that and then push to get out of delivery as soon as possible. So you need a strong hire who can be your head of delivery, whatever you want to call that. Head of client success, director, you know, VP of operations. There's a million different terms that people use for this, an account manager. But you need somebody who can be ultimately responsible for all of client success. When we made a promise, when I made a promise to a client that we were going to do this, I handed it off to this person ultimately and their team delivered it and we kept that promise. And when issues pop up and we can't keep those promises, they can deal with that. And I am the very, very last resort. That's the number one place that I push most people on and then I want them to reallocate that time towards growing the business and towards the people development that needs to happen. That hit of delivery, the common mistake is that person basically just becomes the coo. Sometimes they get brought in as a partner or something, but we kind of overwhelm them with, I need you to own all of client success and I need you to own all of the bulk of our people's success too. Now they're all reporting directly to you. And that's still a better solution than having you sit in that seat. Now we've created at least some redundancy and someone else there, but long term that won't scale and that will break as well. So there needs to be some way that the person who's responsible for all of client success is not simultaneously have everybody reporting in the organization to them. And now they're spending half their week just supporting individual team members and not paying attention to what's actually happening with, with client work. So those need to, to kind of go together or, or be sorted out. And so you will likely need someone else who's also tied to delivery. This is like the common pitfall of sales teams where we take our best AE and then we put Them as head of sales. And now we take our best, you know, our best clothes are off the field. And so you just gotta balance those things out a little bit and probably need to have two separate roles there at some point in time. That does not need to happen at 10 people, but certainly by 15 or 20 people that will need to be separated out.

Okay. What I love about what we're laying down, primarily you're laying down here in this episode is like it's a clear recommendation, it's a clear direction of, you know, you need to focus on delivery first to move yourself out of that. You also mentioned building systems. So I understand you're talking about, you know, there should be a hire. It should be, you know, somebody's whole world or like a big chunk of the world, client success and delivery. But you also talking about building systems to support delivery. So can you paint a picture of like before and after of, you know, before it was probably more of a, you know, handcrafted kind of thing that you were doing here. Now it needs to be more of an assembly line. This is kind of the image in my mind, although assembly line has some negative connotations. So to correct the record here as you, as you see fit. But like what where you're likely at, what were you doing thus far in terms of systems for delivery and where.

Do you need to get so to get here? Either you've been the direct point of contact. If you're serving fewer clients but larger engagements, you're probably the direct contact for a good chunk of those clients and maybe the smaller ones you've started to hand off, or maybe you've handed all of them off in terms of the account management. But the strategy is still coming back to you and that part needs to change. And this is a very intimidating thing to change. It's like, hey, I've hired all these people, I'm paying them. You know, I'm already at a pretty high payroll number, but none of them are at a experience skill set level where I can have them take over as the strategist here. And for me to go hire somebody who's got that ability to lead strategically is going to be much more expensive. And that's out of my range right now. There's a handful of solutions around that. Ultimately you've got to figure out how to solve for that problem though, whether that's upskilling your current team, getting part time help, or stepping up and making some other restaffing issue changes or restructuring changes to let somebody go. So you can afford to bring somebody else in. And that person who you're bringing in, you might need to be finding the right person who's willing to say, hey, yes, you're doing strategy for 30% of your week, but you're doing execution for 70% of your week as well. And you're, you've got to be executing tactically on this until we grow to a size where things change a little bit. And you don't want that to feel like that's a major demotion to somebody or a, oh, that works beneath me, but I can do it for a short period of time. You want somebody who's in it and they have a desire, they do have a hunger to be at the next layer. But there's no immediate dissatisfaction with being hands on. Like, hey, I'm into this and I've got the ability to prove and sharpen my skill set and build systems for the rest of the team. So yeah, you've got the people side of it. And then from the rest of the system side, most of how projects have happened to date have probably been either one account manager and then they're pairing with, you know, one other person, or you might even have them just working directly with whoever's delivering. If it's a website project, they might just be talking to the developer, the designer or whoever, or if you're a design shop, they're working directly with a designer. And for this to build, you probably need a separate layer there at some point. It's not the best use of an expensive developer's time to have them also leading all project management and account management and everything else. So there will be some tweaks that need made. But now we're also at the point of hiring redundancies for the same role. So, hey, we've got so many website projects coming in, we need to hire more developers. Well, now that process being consistent becomes super important. So this is where, hey, we're managing all of our work inside a project management platform. Our processes are defined and they're easy to follow and they're easy to find and deploy in the system. We have an eye on capacity. Now we're starting to worry about capacity. Up to 10 people. It was just, you bag it, we'll tag it like the, you know, the, hey, we'll figure this out as we go and we'll just push through it. And now we're bumping into like, hey, we're, we're, as we're building this thing out, the number has gotten large enough that we can't just commit to whatever and without any concern for capacity because we could be bringing in so much work that there's no way and we could be setting ourselves up for some disastrous outcomes with that. So a lot of that stuff needs to get in place. And part of hiring someone to lead delivery is going to be giving them a very clear scorecard and saying, here's what I care about, here's where. Here's how we measure customer success. And then that's the ultimately the metric that I'm holding you accountable for. Here's how we measure upsells or renewals and that's one of the metrics that you're responsible for. And so it's building out. Here's my expectations, here's how I'm going to know if it's working or not working. And then, you know, tied to that is what's the system that gets us all of those KPIs.

So I'm curious, one last question about this before we move on this new call head of delivery role. For simplicity's sake, would you make it part of their mission to, you know, take kind of the one off projects or like every project is its unique little beast situation and would you make it part of the new head's mission to turn that into actually repeatable SOPS templates? Is that part of their concern? Is this something that you're leaving on your plate as you're bringing them on? Because I keep thinking this is the point at which you should start thinking about SOPs. Right? Or am I wrong? I'm just trying to kind of build a picture here.

Yeah, for sure. This depends. Like by and large I'd say the same person who's great at getting to client outcomes consistently having renewal and upsell, this is like very much a strategy and sales conversation, is in many cases often not the right person who should be building the entire infrastructure. Like they're not also, or they're rarely also going to be enough of a tool nerd to come in and build your project management infrastructure. And they're like some, some combination of greatest strategy, great with clients and in touchy situations, great at sales for upsells and renewals, great at managing a team, great at project management software, great at process documentation, SOP creation. There's some unicorns roaming this earth and if you can last so one and create an offer intensity enough, enticing enough to to bring them in, that's a huge win for you. But that's not the reality for most folks. And so I would not try to put all that on their shoulders. And I would prioritize for what I want long term, which is the strategic sales client relationship and knowing when's a project going well, where's it going off the track. What's that? They've got that, that knowledge and the pattern recognition built up to understand what signs to look for in terms of things going on, going on. So I would either get help from the outside or take that on yourself or with someone else on the team to be more of the champion of building out that infrastructure and system. Obviously they need to understand how it all works. They're going to be part of enforcing it, but you're going to have a really hard time finding someone who has all of those things put together.

Yeah, I was just thinking that it's kind of unique in a company like ours where you mentioned this kind of unicorn kind of composition for this role. But what we deliver actually is project management tool nerdery and operations excellence and this whole knowledge about process management, process creation, change management. So actually our delivery team is here to fill in that piece. Go to zenpilot.com, find out more about what we do there. If you're curious, I've got one last question before we tie a BO on this episode. Just relating back because I feel like this might be like an unfilled gap for somebody listening. You also mentioned so we painted the before and after of the delivery side. I felt that was great. Can we leave the watchers and listeners with a little bit more on the growth side? So one thing that I heard, you know, one thing that if I'm this agency owner that's likely to change is I was creating quality conversations before in a certain way and I would love for you to comment on like what's likely been happening there. Now I need to think about scaling at the very least. You mentioned, you know, running ads might be something that's kind of becoming a thing on my radar. You know, with more income, more revenue, that becomes kind of more feasible too because you need to start with a certain budget. But can we finish with again before and after you've been doing this, you probably need to start thinking about doing this other thing, you know, as you're scaling past NFTs.

Yeah, I'm the least prescriptive on the growth side with teams because I realize that often we are not always working with marketing agencies. There's many different types of agencies, many different types of professional service businesses. But for folks who are running some type of go to market agency Marketing agency, lead gen agency, what, you know, whatever it looks like, I've got the strong belief that you ought to be leaning into your unfair advantage. So if you're excellent at SEO or you're excellent at running, you know, ads, or you're excellent at cold email or something like that is probably the main way that you're going to also generate conversations for yourself. I will say more often than not, the folks who I'm talking to at 10 people or around that space, they are still running the classic agency playbook and it's primarily referrals and network that is leading to their sales most of the time. That's also not a super high growth rate or sustainable growth rate, I guess I should say. So maybe they've gotten to 10 people, they're somewhere between a million and 2 million in revenue and so. And they've grown over the last couple years. 30% a year. Well, that's not hard to grow 30% a year when you're at six people. When you're at 20 people, that's a, a different number and a harder growth to achieve and sustain. And so as you're growing, you have to realize, hey, if I want to keep growing, if I expect this growth to continue or to ramp up, I'm gonna have to invest more here. And so at some point then you do want someone else working in sales alongside of you. You do wanna almost always fire yourself from sales at some point in time. Same thing on the marketing front and who's leading marketing for you. But I would say the lower the volume of clients that you need and the higher the deal value. Therefore, if you've got clients who are paying you $200,000 a year, so not a huge deal, but you know, we're talking about a $18,000 a month retainer and you've got 10 of those clients. Like, you know, we need to grow, we need to add three more clients and not turn anybody out. So if we have some churn, you know, maybe we need to add six of those. Maybe it makes sense to bring a salesperson. Usually it doesn't make sense to bring in a salesperson. You're not running that many sales conversations. You don't need that many conversations. You need really high quality conversations with the right fit prospects.

Right?

If you're running a much lower average value per client and it's a much, it's a more. Transactional is maybe not the right word, but it's a more volume based business, there's a lot more time that goes in on the sales side, not per deal, but in terms of hey, number of deals that need to happen to close enough business to keep growing. And so I base some of my. Should you do it all? Should you be hiring somebody on the sales front? I'd base most of that on what's your deal volume needed, which is a function of your deal size on average.

Okay. Okay. Awesome. Awesome. I love that. And pardon me for filling in my notes here, because what I was trying to. What I would like to do at the end of this episode. Well, first of all, insurance question. Is there anything else that's important that we didn't cover? Otherwise I'll be moving to the kind of summary.

We could come back at some point and we could talk more about operations and maybe like a more operational handbook. Like, hey, what are the. What are the short codes? If I'm in the US at least what are the tools I should be using? Or and how does handing off some of what I've been doing operationally? What should that look like? But I think that's a longer conversation than here.

Yeah, yeah, yeah, exactly, exactly. So I've been listening closely to what you were saying. That's kind of what I do here as a host. So let me try and summarize back to you and kind of build a curriculum, an action list for somebody who is hitting 10 FTEs, wants to move further, still has that appetite for growth. I mean we painted the picture of like the challenges. So here's what you should do. On the psychological side, on the mindset side, point number one is pat yourself on the back actually, you know, realize and celebrate that you got to this point and you probably at some point you thought you would never get there and you actually did in some cases quickly. In some cases it was, you know, longer slog. Either way, you deserve some, some self celebration here. But looking forward, realize that you're learning and that you need to focus on growing your capacity. And you gray gave a great curriculum of what the focus should be on. You should build skills related to prioritization, forecasting, deciding and committing, even with incomplete information and being direct and clear. You mentioned not just with your team members, but clients, stakeholders, partners as well, which I really loved. And again, for clarity, to learn more about that, go to our Clarity is kindness episode. That's on the psychological side. Did I miss anything there? Nope.

I think that's great.

So on the op side, the kind of action list that I've got for you, the watcher or listener and. Or listener, maybe you watched it first and you switched to an audio medium. Never mind is you might be looking at creating the next layer of leadership because you have too many direct reports at this point. You might want to move out, try and move out of delivery as soon as possible unless you're really passionate about it. And then building systems to support delivery particularly there's, you know, a piece related to consistent hiring and delivery system for delivery systems for like for redundant roles because you're starting to repeat certain roles. What I also caught between the lines is like build a way to see capacity and workload because it's going to become more important. And then on the growth side, lean into your unfair advantage higher sales load because it's going to become more important. And then on the growth side lean into your unfair advantage higher sales. If you've got a low deal size or more calls need to be happening, you might need more support there. That's what I noted from that side. Again, checking if I missed anything.

All good.

Okay. Awesome. So I hope this episode was useful to you watchers and listeners and great. I feel like we covered a lot of ground a short amount of time here, so thank you so much for sharing your expertise here. If you want more, follow Gray on LinkedIn and follow Zenpilot. Follow Agency Journey as well. Subscribe to Agency Journey, where you listen to podcasts and find ZenPilot on YouTube too, where we talk a lot more about agency operations and how to get the most out of ClickUp and a bunch of other things besides. And so thank you so much watchers and listeners for joining us here for this episode. Don't Forget to check zempile.com if you want help with your agency operations and learn more about what we do there. And for now, thank you so so much for joining us here today. That's all folks, and we'll see you in the next one.

Bye bye.