Drew McLellan from Build a Better Agency calls most agency founders "accidental business owners." They started as copywriters or art directors, got made redundant, picked up a client, and ten years later found themselves running a 50-person operation with no formal training in how to do it.
Drew has worked with thousands of agencies and mapped the exact headcount points where things tend to fall apart: 12 to 15, 25 to 30, 45 to 50, and 75 to 80. Before those thresholds, everything works on tribal knowledge. After them, it doesn't. "Nobody can keep it all in their head anymore," he says.
The agencies that handle these transitions share a pattern. The owner stays out of the day-to-day delivery and focuses on three things: winning new work, deepening existing client relationships, and developing the team. "Agency owners that stay in those lanes can consistently deliver double digit profit," Drew explains.
He's equally direct on revenue. "60 to 70% of your net new revenue every year should come from existing clients, and most agencies don't come anywhere near that." The instinct is to chase new logos. The money is in the accounts you already have.
On remote work, Drew is clear that the agencies retaining people are the ones investing in bringing teams together in person, even if it's only a couple of times a year. "There is no substitute for that," he says. "When they don't have that connective tissue to their coworkers, that's when you start to see that revolving door."
Listen to the full conversation with Drew on the Happy Teams podcast.
