Small agencies can often face challenges when growing their business. Chip Griffin joins me today to give insights and tips for those small agency challenges and how he provides management, consulting, and coaching advice to help them scale. Hear insights about:
- The most important financial lesson that Chip has learned as an entrepreneur
- The main financial mistakes that Chip sees business owners making
- Why it’s imperative to understand how to calculate your profit margins
- Why Chip is passionate about educating agency owners with his podcast
- The best way to figure out the right pricing model for your business
- Time-saving tips that Chip recommends to small agencies
- The importance of creating an open and honest company culture as the owner
Know Your Numbers
The most important thing as a business owner is to know your numbers. My guest this week, Chip Griffin of Small Agency Growth, joins me to discuss why far too many agency owners don’t have a comprehensive profit and loss statement to use as a reliable source of information to manage their business better.
Chip is a serial entrepreneur who has focused his business expertise on serving the PR and marketing community for over 30 years. He is passionate about educating other small business owners and sharing the insights he has gained (and the mistakes he has made) during his career. His company, the Small Agency Growth Alliance, supports agency leaders to take control of their own businesses to get the results that they want.
Chip explains how he works with small agencies to help them grow their profitability by breaking financial information and tasks down into smaller chunks. He shares the importance of educating entrepreneurs about putting individual project budgets in place, regardless of how much money they see sitting in their bank account. We dive into the long-term perils of ‘checkbook accounting’ and why small business owners get caught in that mindset instead of truly understanding that you need to know your numbers to make sound business decisions.
Think About Your Profit Margins
Once you have an overview of your numbers as a small agency owner, you have to dig down into the details to understand what your profit margins are.
And how you calculate that profit margin is significant whether you’re targeting 15% or 30%. Many agencies struggle to find an accurate number for their own compensation, which can then dramatically skew their profit numbers. Or they don’t accurately account for the difference between the income and reimbursable income, primarily in the form of digital media.
Chip shares why failing to count those two things correctly makes your percentages way off base, which has the knock-on effect of making it almost impossible to calculate your profit margins accurately.
Growing the Business
Agency owners can often be penny wise and pound foolish — particularly when it comes to talent and labor. Chip and I discuss some of the mistakes that small agencies make when trying to figure out how to be as profitable as possible. We talk about the dangers as an owner of either overworking their team to make the numbers look better or holding off on investing in additional team members.
As an owner, you need to ensure that your time is freed up to focus on higher-value activities, but so many entrepreneurs get stuck doing tasks that don’t allow them to make the best use of their time. If you fall into this trap, you will almost certainly hold back the growth of the business. Chip explores the necessity of a healthy company tracking finances accurately from the get-go to be on a strong growth trajectory.
How to Connect with Chip Griffin:
- Website: https://www.smallagencygrowth.com
- LinkedIn: https://www.linkedin.com/in/chipgriffin
- Facebook: https://www.facebook.com/chipgriffin
- Twitter: https://twitter.com/ChipGriffin
About Chip Griffin:
Chip Griffin is a serial entrepreneur with a track record of building businesses that serve the PR and marketing community. He founded the Small Agency Growth Alliance to help agency leaders take control of their own businesses to get the results that they want.
He has worked in a wide range of communications-related roles, starting as a junior account executive at a boutique public affairs firm and most recently serving as Chief Operating Officer for a global media intelligence agency.
As someone who has owned an agency himself, he understands the challenges and opportunities his clients see every day.
Chip lives in Bow, New Hampshire, where he can often be found officiating or photographing youth sports in his free time.