The challenges of scaling a fast-growing agency

Guest Writer's picture
by Guest Writer
Ryan Scaife, Netsells

Ryan Scaife, CFO of Netsells, the York-based digital product consultancy, discusses how to grow and scale while keeping an eye on sustainability.

Scaife was previously Director of Commercial Operations and Finance Director at Epiphany, overseeing its sale to Jaywing in 2014. 

From this, he’s learnt a great deal about helping agencies thrive - from retaining staff and carefully selecting clients, to focusing on the power of data.

 

The challenges agencies face when scaling

First and foremost, a scarcity of skilled staff will always remain the ultimate challenge for agencies. Attracting and retaining staff in a competitive marketplace is absolutely crucial to the success of any company - especially in our industry, where success is directly correlated to the strength of your people.

High staff turnover can be absolutely disastrous to an agency, not just in terms of the costs of recruiting but the loss in knowledge and productivity, impact on teams and client relationships.

Beyond this, a granular understanding of your proposition, what your USP is, and what customers demand, is a necessity. Agencies now more than ever need to be flexibly structured and agile enough to meet changing customer needs - be this as an extension of in-house teams, fully outsourced, or a combination of the two.

One challenge that agencies will face, especially during the pandemic, is to not think too short-term. Of course, there’s been the expectation as an absolute minimum to get through the last 12 months unscathed, but those who managed to look further ahead of the curve and exploit the opportunities will prosper.

One example of doing this is being incredibly selective of customers to partner with. Most agencies at some point will have prioritised income ahead of difficult working relationships, which inevitably leads to staff turnover and not the levels of profitability you anticipate.

How agencies can balance the need for fast growth and long-term sustainability

Being selective of clients is crucial here, to ensure long-term growth and partnerships.

I might be biased, but only with a laser-focus on data and the provision of reliable, forward-looking management information will an agency be able to commit to a concrete plan and reap the rewards.

Without understanding future revenue streams - and the cash this generates along with outgoings - will any company be able to commit to re-investing properly in the business to facilitate effective scaling.

Sustainability of income streams remains critical as well; few businesses want to exist in a boom-and-bust environment.

It allows confidence to invest in innovation, R&D, and general headspace for staff who will ultimately drive that growth. This goes back to aligning with the right type of client in the right relationship, without ultimately having to fill a leaky bucket every three months.

What I learnt scaling Epiphany all the way to exit

It’s really difficult - you need all areas of the business aligning and acting collaboratively and collectively. The earlier the structure is in place, the easier this allows for effective scaling without killing flexibility, creativity, and the confidence to pivot and follow through with change.

The more inclusive and communicative you are with all staff about the end goal, the easier it becomes to bring people on that journey. That's why, at Netsells, we present all commercials to staff quarterly in full transparency, alongside delivery against all objectives, to ensure we’re holding ourselves to account.

At Epiphany, we had very little exposure to one particular client or industry. In 13 years, we never had one client making up more than 10% of the overall revenue. This gave us huge future visibility of revenue streams, which was ultimately appealing to the acquirer, Jaywing.

Fundamentally, our people were our greatest asset. We built a team across the entire breadth of the business full of technically gifted people - but more importantly, genuinely nice individuals you want to succeed with and spend an unhealthy amount of time alongside!

What’s next at Netsells

I’m just coming up to the six-month mark here at Netsells - but commercially speaking, we’re in an amazing position coming out of the pandemic. We grew 25% during the past 12 months, which is a huge achievement for the business and testament to the hard work of our people.

We are still seeing really strong clients come on-board and approach us, and I’m pleased to say we didn’t succumb to the temptation to take on the wrong type of client during an extremely uncertain period. We’re also continuing our work with long-term clients such as Hiscox, who are using our expertise to really invest in their technology and platforms.

We’re also fortunate enough to operate within an extremely resilient market and sector as companies double down on their investments in digital transformation and accelerating digital initiatives.

In 2020, McKinsey reported that the pandemic accelerated digital adoption by seven years, which is huge. No surprise there that external investment, M&A activity and diversification into this sector will remain strong.

There is some discussion about whether this trend will fizzle out after the pandemic is under control, but we are yet to see any signs of things slowing down.

If anything, the last few months out of lockdown have demonstrated that there is a growing appetite for building new digital propositions across start-ups, SMEs and corporates. I’m excited to see where we and the market go next.

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