Running an agency involves much more than just completing tasks and billing clients. There's a vast array of unseen expenses that are essential to keeping the show on the road. In a recent conversation with Kevin Gibbons, we delved into the often-overlooked aspects of agency operations. If you're involved in SEO or contemplating setting up your own agency, this article will illuminate those hidden costs and explain why they're crucial for not just staying afloat but flourishing in this industry.
The Reality of Unbillable Costs
Many newcomers to the agency scene might think it's all about executing the work and getting paid. However, Kevin highlighted the multitude of behind-the-scenes costs. For instance, if you're an SEO doing the grunt work, you might wonder why the agency charges so much when you're only seeing a fraction of that in your pay. The explanation lies in the unbillable costs necessary to keep the agency—and by extension, its employees—in business.
It's a Team Effort
When a client signs up with an agency, they're not just hiring a freelancer; they're securing a team. This squad could consist of strategists, analysts, project managers, account managers, copywriters, content creators, and digital PR experts, among others. Each team member plays a pivotal role in delivering the results promised to the client.
Additionally, there are essential roles within the agency that might not bill clients directly but are fundamental for the seamless running of the business, such as:
Project Management: Keeping projects on track and meeting deadlines.
HR: Supporting team growth, career development, and ensuring talent retention.
Finance: Handling the flow of money, both in and out. Without timely client payments, the agency can't operate effectively.
Sales and Marketing: Bringing in new business to sustain and grow the agency.
The Costs You Don't See
Certain costs may not directly contribute to client projects but are critical for maintaining high-quality service. These include training, learning, and development expenses, crucial for keeping the team sharp and competitive. While not all agencies have a brick-and-mortar office, those that do face significant overheads such as rent and utilities.
Why Clients Should Care
Clients are ultimately paying for outcomes, but these results come from a broad array of inputs, not just the direct labour of those working on their projects. The supporting infrastructure is just as important as the frontline work in delivering the high standards clients expect.
Keeping the Agency Vessel Sailing
Kevin's insights highlight the need for a holistic approach to agency management. It's about more than just the work itself; it's about running the business in a manner that supports the team, delivers client value, and secures the agency's future.
Practical Advice
Inform Your Clients: It's vital to help clients understand the full value they receive from an agency, encompassing not only the direct work but also the supporting expertise and infrastructure.
Invest in Your Staff: Training and development should be seen as investments in service quality, not mere costs.
Handle Your Finances Smartly: Solid invoicing and payment processes are essential. Effective cash flow management is the lifeblood of any agency.
Recognise the Value of Support Roles: Acknowledge the importance of non-revenue-generating roles that are vital for the smooth operation of your agency.
By recognising and managing these hidden costs, you can position your agency not just to survive but to thrive in the competitive digital marketing landscape.