Agencies remain cautious, but opportunity lies ahead

As we launch the first of this year’s BenchPress reports, State of the Agency Nation, we have seen confidence levels drop similar to the autumn of 2020 - when we were in the midst of Covid restrictions. But it’s not all doom and gloom. 

UK agencies are really feeling the pressure right now. A cost-of-living crisis, a recession on the horizon plus reduced growth means many are worrying about their businesses. Our State of the Agency Nation report goes deeper, revealing key insights. We’ve found that:

• Remuneration has fallen. Reduced growth, increased wages and squeezed profitability has meant agency owners are taking home less than the year before. 
• Agency owners are worried. 60% of £1m+ agency owners feel worried or anxious at least once a month, 14% every single day
• Profitability has been squeezed across the board, with agencies of all sizes reporting margins have narrowed in the last year

Whilst we don’t know exactly what 2023 will hold for agencies and the wider economy, there are things agency owners can do to turn the odds in their favour. With every challenge comes an opportunity, and it’s time to ask yourself, “How can I make 2023 my best year yet?”

The future is in your hands

Many of the successful things that happen in our businesses come from strategy and planning, but it’s the habits and mindset behind this work that really drives success and growth. We’ve talked about this previously on the blog, with Wow’s co-founder Peter Czapp taking us through five winning strategies for the year ahead. The State of the Agency Nation report adds to this with practical strategies that will really help you and your business to thrive.

Be clear on your priorities

Having clarity on what’s important to you will help you to create a strategy that guides your agency through what comes next. The report ranks the key priorities agency owners are working towards. Be it building an asset for sale, having more control over their time, fulfilling their purpose, or maximising the amount they earn, the owners of agencies need focus and clarity in order to make the right decisions. 

Focus on profit and cash

It sounds really simple to say that when you have more cash in the bank, you are less stressed. But that’s what agency owners told us when they completed the BenchPress survey. Both profit and cash mean you are better able to make those big decisions that will benefit the long-term health of your business, and not get sucked into decisions based on short-term cash pressures. 

In order to reach a healthy cash position, where you have 4 or more months of overheads as cash in the bank, you need to make sure you are running your business profitably - it’s the precursor to a healthy bank balance. The State of The Agency Nation report shows that overall profitability is down, which means that agencies have plenty of work to do to increase this again. 

Spend your time wisely

Over 80% of agency owners want to spend more time on strategy. This is critical to helping you lead your business through 2023 and beyond. These are the activities UK agency owners tend to split their time between:

• Business administration
• Account management
• Team management
• Billable client work
• Sales and marketing
• Strategy

If you run an agency and you’re still spending time on day-to-day activities, it’s important you take the time to examine this and objectively analyse whether it’s truly a “you” thing or if it’s something you could hire and train somebody to do. Check out more tips and tricks for time management in the full report.

Look after yourself

Having a healthy work/life balance is easier said than done, but its impact on our wellbeing is huge. You’re twice as likely to worry about your business if you don’t have a healthy work/life balance. Holding time in your diary, being strict about working hours, and exercising are all things that agency owners say promote positive mental health and that vital headspace.

“How can I make this the best thing that’s ever happened to me and my business?”

This phrase is a state of mind, and something we encourage clients to ask themselves whenever a challenge arises. Initially, you’ll have no answers, but it’s a great way of switching a fearful mindset into one of opportunity and hope. Check in with yourself, how are you feeling? What stories are you telling yourself? And are they going to help you navigate what’s coming next? You can learn more about this mindset from Five Recession Lessons, an antidote to negativity. 

Get the full picture

For the full stats, insights and to see how you compare to other UK agency owners, download the ‘State of the Agency Nation’ report for free. The report covers:

• The latest financial performance benchmarks
• Key trends, current challenges, and priorities for agency owners
  
• How agency owners spend their time