In this episode, we talked about the six core areas of your agency’s numbers and how they can be used to drive growth and increase profits. Even if you’re not a numbers person, using data rather than your gut can help you make better decisions as an agency owner and get to your goals faster

My guest is Ben McAdam, who runs his own successful profits coaching practice. He is also the profits and financials specialist coach in the Seven Figure Agency program, where he has helped members get results ranging from clarity on their numbers to an extra $200k ARR from a simple raising prices process (while upsetting very few clients in the process).

You can watch the whole video now below:

Outline of This Episode

  • [1:07] Learn more about Ben McAdam
  • [5:12] Key Area #1: Goal Numbers
  • [12:50] Key Area #2: Personal numbers
  • [17:14] Key Area #3: Offer numbers
  • [30:55] Key Area #4: Marketing and sales numbers
  • [37:01] Key Area #5: Monthly numbers
  • [44:16] Key Area #6: Future numbers
  • [50:17] Which area do you prioritize first?

Key Area #1: Goal Numbers

The idea is to know what you want, know what that realistically looks like, the few key projects to focus on, a plan to get those projects done, and a regular review to stay on track.

One of Ben’s favorite clients runs a seven-figure business. When they started working with Ben, they were losing money. They’d run the business for six years. Their end goal was a $10 million exit. But they were getting burned out and going broke.

Their previous coach didn’t ask why they wanted a 10-million-dollar exit. It wasn’t actually what they wanted. They wanted $150,000 a year from passive investments to sustain them after selling their business. Knowing that changed everything.

It meant that they only needed a 4-million-dollar exit. They were able to cut back on some of the things they were spending money on. They went from running at a loss to having a $100,000 profit at the end of the year. Goals and the plans you make to achieve them is a huge lever in profitability.

Give yourself one point if you’ve addressed each of these questions:

  • Have you set SMART goals and asked why? 
  • Have you visualized what the agency looks like once you’ve achieved those goals?
  • What 3–6 things will get you from where you are now to that picture? 
  • Do you have a sustainable plan over the next 12 months?
  • Are you reviewing your progress and making course corrections monthly? 

Key Area #2: Personal Numbers

Your personal finances and personal productivity can hold your agency back. If you tune your personal productivity and performance to support your agency’s growth and satisfaction, you’ll see more success.

Shawn spent a lot of time on operations and got stuck at $44,000 a month in revenue. So Ben helped him shift his time to spend more time on sales and delegating operations to his team. Seven months later he hit $85,000 in revenue.

Some people are great at marketing, others are great at sales. We tend to lean into those preferences, but it can be detrimental to your business. How much time are you spending on sales? Is it enough? It probably isn’t.

Give yourself one point if you’ve addressed each of these questions:

  • Are you clear on how much money you need to cover your personal expenses each month?
  • Is there little waste in your personal expenses? 
  • Have you got a 3–6 month personal savings buffer? Are you building your personal wealth?
  • Do you know when to work on different tasks for the maximum amount of effectiveness? 
  • Do you have a framework in place for supporting your productivity? 
  • Have you removed waste from your to-do list or calendar? 

Key Area #3: Offer numbers

Does the service you’re offering and the price you’re offering it at lead to profits and growth? This is done well in all rapidly growing agencies.

One of Ben’s clients, John, was running an agency making $30,000 a month. If you’re making $50,000 a month you should be able to pull $10,000 a month for yourself and allocate $15,000 for profit. John wasn’t near that. He wanted to invest in building the business to the next level.

So they worked to increase his gross profit margins. Gross profit margin is the percentage of your revenue that’s left over after you’ve paid for client work and communication to be done. His entire team is aligned on those margins and their profitability increased.

What is your current monthly revenue? Let’s say you improve things to keep an extra 5% and improve your margin to 55%. How much extra money do you have? Where does it go? You can put that in your pocket. But what if you spent it on marketing? If you got a decent return on that, you could see an extra $7,000–$10,000 a month.

Give yourself one point if you’ve addressed and/or solved each of these questions:

  • Do you have a spreadsheet calculating your gross profit margin?
  • Do you know what your gross profit margin is?
  • Does your team help you maintain or improve your profit margin?
  • Is your gross profit margin 66% or higher?
  • Is your gross profit margin 80% or higher? 

How do you improve your profit margins? Listen to hear Ben’s key strategies!

Key Area #4: Marketing and sales numbers

Are you trying to fix the wrong part of your funnel? Maybe you’re great at converting but keep trying to improve it. Maybe you just need more qualified people on a sales call. You need objective numbers showing you where you need to improve.

Joe loved content marketing and preferred that route to increase his sales. But he wasn’t tracking his numbers. He just assumed that the more money he spent on content the more he’d make. Turns out, the problem was that very few people showed up for his sales calls.

He stopped booking sales calls three weeks in advance. He changed it so they could only book three days ahead. He saw dramatic improvement. Then they dropped the amount he spent on content. He knew his numbers and fixed what was actually wrong.

Give yourself one point if you’ve addressed and/or solved each of these questions:

  • Are you looking at your metrics weekly?
  • Are you looking at your metrics daily?
  • Do you know what your targets are for each metric?
  • Are you always working on improving the metric that’s the most impactful?
  • Does someone on your team look at the metrics and work on them?

Key Area #5: Monthly numbers

You can’t just look at bookkeeping reports. You want to monitor your business from a higher vantage point to see things you might miss in the day-to-day. It’s easy to stay busy and miss trends. One of Ben’s clients was spending thousands of dollars a month on software they weren’t actually using. No one was thinking about it and it had slipped through the cracks.

No one wants to look at the financials but it’s important. It’s your fiduciary responsibility to look for and remove waste consistently. It’s helpful when you find someone like Ben who can help you review this.

Give yourself one point if you’ve addressed and/or solved each of these questions:

  • Are you looking at your P&L monthly?
  • Are you looking at your balance sheet monthly?
  • Are you looking at your reports by the 7th of each month?
  • Do you know the targets for your main numbers?
  • Are you trimming your expenses every three months?

Key Area #6: Future numbers

This is more critical for people who have inventory-based businesses but is still applicable to agencies. This will allow you to make more aggressive growth plans with less risk.

  • Maybe you found a rockstar team member who’s asking for a higher salary than you planned for.
  • Or you can sponsor a conference at a discounted rate.
  • Maybe you want to spend more on Facebook ads.
  • Maybe you want to launch a new service

Many people dive into opportunities without checking the numbers first. Others might not take the growth opportunity because they don’t know if they can afford it long-term. You need to know what you can afford to do without going broke in the future.

Give yourself one point if you’ve addressed and/or solved each of these questions:

  • Do you know what your payroll is each month?
  • Do you have a rule of thumb amount to keep in your bank account?
  • Do you have a cash flow projection or budget in place?
  • Are you reviewing your budget monthly and adjusting estimates accordingly?
  • Do you have non-financial numbers feeding your budget?

Listen to the whole episode to hear Ben cover every section in detail!

Resources & People Mentioned

Connect with Ben McAdam

Connect With Josh Nelson

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