Growth for growth's sake is not a sound business practice. Instead, it's better to take a calculated and controlled approach to scaling your agency.
If you grow too quickly, you risk not having the right leadership team in place, stretching your current team too thin, relying on processes that can't scale to accommodate growth, and jeopardizing your ability to meet payroll.
"Agencies are bound by the limitations of human resources." - The Marketing Agency Blueprint
Forecasting, on the other hand, gives you a firm pulse on your agency's capacity. It ensures that accounts are properly staffed and workloads distributed, as well as helping you make smart hiring decisions-when the time is right.
As a rule of thumb, each consultant is capable of doing approximately 120 client-service hours per month. Note that this includes both billable and non-billable time on an account.
That said, position and other responsibilities within the agency have a direct impact on this number. For example, the CEO and other senior-level staff will have less capacity for providing client services as they are also responsible for day-to-day operational activities like finance, HR, business development and general agency management.
Understand that as a service business, your agency's ability to grow is directly tied to human resources. If you grow too fast or don't have the right people in place, you risk under-delivering on client expectations, increasing staff turnover and losing accounts.
For these reasons, it's important to have a system in place that helps you forecast employee time across accounts and ensures that workloads are evenly distributed. We recommend pairing historical and predictive data to get a good idea of where time is being spent.
Forecasting is both an art and a science; however, proper systems and processes can improve accuracy. Moving toward larger clients with campaigns rather that single projects can also help with forecasting, as one-off projects lead to greater variances from month to month.
The exact time and type of hiring will vary from one agency to the next. But if you have a forecasting system in place, you can more readily see if your team is under or over staffed, and make smarter hiring decisions.
This article has been written by Tracy Lewis and reprinted with the permission of Marketing Agency Insider. Tracy is the community manager for Marketing Agency Insider, and a senior consultant at PR 20/20, where she is involved in client services and account management activities.