Growing an agency seems simple, get more clients, hire more people, and scale. But for most agency owners, reality hits hard. More clients don’t always mean more profit. More employees don’t always reduce stress. Instead of running a business, many agency owners find themselves trapped, working harder while making less.
Chris Martinez, CEO & Founder of DUDE Agency, has seen this cycle firsthand. Many agencies hit revenue ceilings because they’re focused on the wrong things. They scale without fixing operational gaps, mismanage their hiring process, and struggle to maintain profit.
In this episode of the Garlic Marketing Show, Chris breaks down the biggest mistakes agency owners make, the key revenue thresholds that hold agencies back, and what to do if you want to scale, increase profit, or sell your agency.
But before we proceed, don’t forget that this episode is brought to you by videocasestory.com. Click here if you need help collecting, crafting, and delivering customer stories.
Why Most Agencies Struggle to Stay Profitable
Many agency owners barely pay themselves while running a business that generates solid revenue. They assume that as revenue grows, profit will take care of itself. But that’s rarely the case.
Chris explains that hitting a million in revenue doesn’t guarantee financial success. In fact, many agencies make more money before crossing the seven-figure mark because they have fewer expenses. Without proper budgeting, hiring, and client retention strategies, agencies start making more revenue but keep less of it.
The Revenue Ceilings That Hold Agencies Back
Every agency faces sticking points, revenue levels where growth slows down, stress increases, and owners struggle to break through.
- $25K/month: At this level, owners are doing everything themselves. The challenge is balancing sales, fulfillment, and operations while trying to build a team.
- $60K/month: Owners have a small team but struggle to remove themselves from client work. Scaling becomes difficult because they don’t have department heads or a clear structure.
- $100K+/month: Agencies in this range often work harder but keep less profit. They have more employees but haven’t built strong enough systems, leading to higher expenses and lower margins.
Chris emphasizes that breaking through each stage requires different skills. What worked to hit $30K/month won’t get you to $100K/month. The key is understanding what’s holding you back at each level.
Hiring the Right People And Avoiding the Biggest Mistakes
Most agency owners struggle with hiring. They either:
- Hire too fast and end up with the wrong people.
- Hire too late and burn themselves out.
- Avoid hiring key roles because they don’t want to let go of control.
Chris explains that agencies should hire for the right positions at the right time. Many owners try to hire a salesperson too soon and expect them to build a system from scratch. Others hold on to employees who were great at the start but no longer fit as the business grows.
Knowing when to hire, who to hire, and when to let go is one of the most important skills agency owners need to develop.
Sales vs. Operations – Which One Do You Fix First?
Many agencies focus on sales, but sales won’t fix a broken business. Chris highlights that before ramping up lead generation, agencies need to fix their operations. If the fulfillment process is weak, getting more leads will only lead to higher churn rates and more frustration.
At the same time, agencies can’t ignore lead generation. The key is balancing sales, operations, and profitability so the business can grow in a sustainable way.
How to Prepare Your Agency for an Exit
Whether an owner wants to sell in five years or never, building an agency with an exit in mind is the smartest way to run it.
Buyers look at three things:
- Revenue: How much money the agency makes.
- Profit: How much money is left after expenses.
- Scalability: Whether the business can grow without the owner being involved in every decision.
Chris explains that the worst mistake agency owners make is waiting until they want to sell before fixing their finances. If you’re thinking about selling in the future, you need at least two years of clean financial records and a business that doesn’t rely entirely on you.
Growing an agency isn’t about chasing bigger revenue numbers, it’s about building a business that works, makes money, and gives the owner freedom.
If you’re thinking about scaling or eventually selling your agency, now is the time to start making changes.
Watch the full episode now, and make sure to leave any questions or comments you have about the episode.