Business models
The agency business model
The agency business model: a team does skilled work for clients, usually on projects or monthly retainers. You sell expert time, such as design, marketing or development.
How it makes money
You sell expert time, such as design, marketing or development. Profit comes from the gap between what clients pay and what your team costs, so being fully booked matters.
Real examples
- WPP and Omnicom are large advertising groups.
- Many small design and marketing studios run the same way.
The numbers to watch
- Billable share of the team's hours
- Profit per client
- Share of revenue from the biggest client
Who it fits
People with a skill that businesses need, and a talent for selling it.
What goes wrong
One big client leaves, or the owner never gets out of client work. Growth often means more people, with thinner margins.
Try it this week
Pick one service and one type of client. Saying no to the rest makes it easier to sell.
Then give it a time: one block of 90 minutes this week, in your calendar. Our playbooks have the next steps for finding your first customers.
Questions
What is an example of the agency model?
WPP and Omnicom are large advertising groups.
What is the biggest risk with the agency model?
One big client leaves, or the owner never gets out of client work.
Plan your first week of building it
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