As an agency, your primary goal is to help clients grow their businesses through expert services. However, you also need to ensure that your own business is profitable and sustainable in the long run.

There are several ways for your agency to boost its profits. In this article, we’ll discuss five effective strategies that can help your agency grow its profits.

1. Set Clear Goals and Metrics 

It's essential to set clear, measurable goals and metrics for your agency. This will help you track your progress and identify areas where you need to improve. 

Identify key performance indicators (KPIs) that are most relevant to your agency's profitability, such as revenue, gross margin, and net profit. Set goals for each of these metrics and track your progress regularly. This will help you stay focused on the big picture and ensure that you're making progress towards your financial goals.

Financial KPIs should be easily generated and monitored at least once a month. Also it is important to track these KPIs not only at  the company level but also per business units, services, or per clients or even per employee (choose the best indicator based on the specificities of your business).

Learn more about KPIs and Segmentation reporting from one of our previous blog articles on Management Reports here. 

2. Focus on Your Profitable Services and Clients

Once you have clear goals and are able to monitor performances, you have to identify your most profitable services or clients. Try to divide your company's customers/services into groups that reflect similarity in each group (industries, size, etc.). 

Look at your current contracts and evaluate which services or which clients group generate the most margins and profits. Once you've identified these services or clients, make sure to focus on them. 

If you notice most of your services or clients are not generating enough margins or profits, it is essential you urgently focus on your pricing strategy.

Based on experience, a lot of agencies do not price their services high enough, especially new agencies as they prioritize client acquisition and may lack confidence in their abilities. One tip would be to consider offering a three-tiered pricing strategy that can boost your agency's profits by offering different pricing options as it allows for upselling opportunities and enhances perceived value.

3. Streamline Your Operations

One of the most effective ways to grow your profits is to streamline your operations.

Look for ways to optimize your workflows, reduce waste, and improve productivity. This can involve anything from automating administrative tasks to reorganizing your team structure.

By streamlining your operations, you can reduce costs and increase efficiency, which will ultimately translate into higher profits. Implementing an Enterprise Resource Planning (ERP) software could be a good solution if your company has reached a critical size.

If you are still a young and fast growing company, think about outsourcing your accounting and finances tasks so you can focus on your core business. More information on outsourcing accounting and finance functions in these previous articles: 

What Is Outsourced Accounting And How Can It Help Your Growing Company ?

Hire an Outsourced CFO to Scale your Business

4. Invest in Talent Development

Your agency's success is largely dependent on the talent and expertise of your team.

By investing in talent development, you can improve the quality of your services and attract more clients. Offer regular training and development opportunities to your team, and encourage them to pursue certifications and advanced degrees in their respective fields. 

This will not only improve the quality of your services but also help you retain top talent and attract new hires.

5. Expand Your Service Offerings

Finally, once you are ready, consider expanding your service offerings to generate new revenue streams and increase profitability. 

This can involve anything from adding new services to your existing portfolio to developing new business lines that complement your core offerings.

Conduct market research to identify areas where there's demand for your services, and explore ways to differentiate yourself from competitors.

Proseso Consulting - The Finance expert for growing and international businesses

For more information on our Services or if you have any questions on how you can outsource your finance functions, contact me directly at ninoy@proseso-consulting.com.

Proseso Consulting provides business advisory and finances managed services (bookkeeping and accounting, outsourced and automated payroll, tax compliance, financial reporting, etc.). We are here to help you achieve your long-term business goals!

Ninoy Salmon is a seasoned business and finance professional with extensive experience working with both fast-growing startups and companies in the Philippines and around the world.

Get in touch with our team at contact@proseso-consulting.com or visit us at www.proseso-consulting.com for more information about our services.

 

This blog article does not constitute professional or legal advice. It is only intended to provide general information on a subject.