If there is one regret I have about how I built my brand agency and the three other agencies in my mini-empire, it would be the following. I did not build these companies with the idea of building a real business asset. What I mean is, transferrable business asset that I could exit for a high value (or that could just provide cashflow without me doing most of the heavy lifting.
Not only were these companies not exitable (I did get something for some of them, but nothing close to what I could have), they were not designed to work like cash-flowing, preditable, scalable businesses. And the same is true of almost every agency.
The far majority of agencies stay stuck at $1-5M in revenue. And of those that grow past this threshold (which is an extension of the owner), they struggle with profitability, because the business model is not scalable. So they just scale up the problems with the model. Bloated overheads, thin margins, and a circus of an operating system. All mostly because you cannot scale custom services, you cannot build a scalable business when you serve different clients with different needs in different ways.
The Problem with the Agency Custom Service Model
Most agencies and consultancies operate on a “goodwill” model: they listen to client problems, say yes to almost anything, and create custom solutions for each engagement. While this might be creatively satisfying, it’s a recipe for stress, operational chaos, and a business that’s hard to scale or sell. You end up:
• Reinventing the wheel for every client
• Running a business that’s dependent on a handful of big clients
• Feeling overwhelmed as the owner, constantly firefighting and unable to step back
Cost Structure: What are your fixed and operating costs?
A thorough diagnosis of these drivers—especially using the 80/20 rule—reveals where your biggest opportunities (and risks) lie.
I use a tool called The Money Equation to diagnose how money flows in and out of the business. The equation has six core drivers that directly impact your agency’s revenue and profit:
Lead Generation: How many leads are you generating, and where do the best ones come from?
Conversion Rate: How effectively are you turning leads into paying clients?
Average Price per Transaction: What’s your typical deal size, and how can you increase it?
Transactions per Client: How often do clients buy from you in a year?
Profit Margin: How much profit are you keeping (ideally measured per project)?
Cost Structure: What are your fixed and operating costs?
A thorough diagnosis of these drivers—especially using the 80/20 rule—reveals where your biggest opportunities (and risks) lie.
Agency Positioning: Get Specific or Get Ignored
Most agencies have vague, overly broad positioning. Tobias argues for niche positioning: be crystal clear about who you serve, what problems you solve, and why you’re uniquely equipped to do it. Avoid “full service” or “360” claims—these are unownable unless you’re a global holding company.
Proposition: Move from Selling Time to Selling Outcomes
Transition away from billing for time and custom work. Instead, build your business around a few repeatable, productized transformation journeys—front-end offers that deliver big, consistent results for a defined client segment.
Productization leads to:
• Higher margins and predictability
• Easier sales and onboarding
• Simpler operations and delivery
Agency Business & Revenue Model: Productize and Systematize
Shift from “done for you” custom projects to a model where 80% of your offering is standardized (with up to 20% customization). Consider hybrid models: “done with you,” templated services, online courses, or even SaaS tools. The goal is to control your margins and deliver value at scale.
Client Acquisition Machine: Build, Don’t Rely on Luck
Most agencies rely on random referrals. Tobias stresses the need for a systematic, documented client acquisition process—from lead generation to nurturing, sales, and follow-up. Become a thought leader in your niche and use creative, repeatable tactics to keep your pipeline full.
Operating System: Standardize Delivery
Think of your agency like an assembly line (in the best sense): standardized, systematized, and repeatable. This doesn’t kill creativity—it liberates it by freeing your team from chaos and enabling you to deliver transformational outcomes at scale. Build a conveyor belt business. You might not love the idea at first, but trust me, you will.
Scale and Optimize: Multiply What Works
Once your core systems are healthy, focus on scaling what works. Tobias recommends identifying “growth multipliers” in each area of the money equation—adding new lead sources, increasing deal size, improving retention, or boosting margins. Small improvements compound for exponential growth.
Exitability: Build a Business Buyers Want
To maximize your exit value (or simply gain freedom as an owner), address these factors:
• Reduce owner dependency: Build a leadership team and professional management.
• Diversify your client base: No more than 20% of revenue from any one client.
• Systematize everything: Buyers want a “cash machine,” not a chaotic custom shop.
Final Takeaway
The punchline: The only way to build a scalable, valuable agency is to simplify, systematize, and productize your business. This shift not only makes your life as an owner easier, but also creates a business that’s attractive to buyers and resilient in a changing market.
Stop selling time. Start selling outcomes. Build systems. And get ready to scale.
If you want help with this, I have programs where we work through these topics to help you transform you agency or consultancy.
Book a discovery call.
