Building an agency

Agency: Custom work, hourly or project pricing, scales with headcount. Productised service: Standard offer at a fixed price, e.g. "Webflow site in 14 days for $4,800." Consulting: Hourly advice, no delivery, scales with reputation.

Productised services are dramatically easier to sell, deliver, and scale than custom agency work. The reason most agencies stay agencies is that productising requires saying no to revenue — and that's psychologically hard.

Generic agencies compete on price. Positioned agencies compete on outcome.

The cheapest positioning move:

• Niche by industry: "Marketing agency for B2B SaaS" outperforms "Marketing agency."
• Niche by outcome: "We get B2B SaaS to $50k MRR" beats "We do marketing."
• Niche by ICP: "For founders who can't afford a CMO" beats "For ambitious companies."

The narrower the position, the higher the price you can charge. Always counter-intuitive; always true.

Most agency founders hire wrong. The order that works:

1. A delivery generalist — does the work you're currently doing, frees you to sell.
2. A project coordinator — keeps clients happy, manages timelines.
3. A second delivery generalist — capacity to take on the next 5 clients.

You don't need a sales hire until you're past $30k MRR. You don't need a "marketing manager" until you have 10+ employees. Generalists who deliver beat specialists who can't.

The agency-to-product transition:

1. Identify the repeatable 60%. What do you do for every client? That's your product.
2. Package it. Fixed scope, fixed timeline, fixed price.
3. Sell the package, not the hours. Resist customisation requests in year 1.
4. Train one person to deliver it without you. Test with a non-flagship client.

Most agencies that try this fail because the founder can't say no to custom requests. The discipline to stick with the package is the whole game.

Service-business founders track revenue. Service-business operators track two different numbers:

Utilisation rate — what % of your billable team's hours are billable to a client this week? Healthy is 60-75%. Below 50% you're burning gross margin. Above 85% sustained means people are about to quit and quality is slipping. Track it weekly per person, not monthly aggregate; the aggregate hides the senior person stuck on internal work.

Cash days — how many days of operating expenses do you have in the bank, accounting for unpaid invoices? Service businesses get burned by Net-60 payment terms with no float. The rule: 60+ days of cash on hand, always. Below 30 days you're one slow-paying client from a payroll crisis.

The lever both of these expose: deposits. A 30-50% deposit on signature, paid before kick-off, transforms cash days without changing revenue. Most agencies don't ask for one because they don't want to lose the deal. They lose 10% of deals and gain 30+ days of float — almost always worth it.