in Events

T&C 2020: Grow Your Agency in 2021 by Fixing 2020 Profit Leaks

by Christina Hooper.
Last Updated on May 8, 2022

This article is part of a series breaking down the top takeaways from the key speakers at T&C 2020.

What Was This Session All About?

Is your agency struggling financially? Are you having trouble pinpointing the problem? It could very possibly be profit leaks. 

Agency Leader Karl Sakas spoke at the T&C Summit and dove into the issue of profit leaks. During the presentation, he taught us how to identify them and advise us about them. 

Even if you don’t have financial issues, you could still use plenty of advice in your agency. But, first, let’s take a look at who Karl is.

Who is Karl Sakas?

  • He is the President and Agency Consultant of Sakas and Company.
  • He is known as an “agency therapist” because of his expertise.

What We Learned

Karl taught us three things. 

  1. How to use agency industry benchmarks to pinpoint where you have profit leaks today.
  2. How to envision your ideal future agency so you can work backward to get there.
  3. How to prioritize which profit leaks to fix first as you grow your agency in 2021.

“Profitable agencies are all alike: every unprofitable agency leaks profits in its own way” -Karla Sakas (via Leo Tolstoy)

Pinpoint Profit Leaks via Industry Benchmarks 

Where does your industry fall concerning these benchmarks?

Agency Benchmarks (Where Your Business Should Be)

  1. Net Profit Margins = 20=30%
  2. Labor Spend= 50-60%
  3. Revenue per FTE (Per capita revenue)= $150-2AQ00k
  4. Client Attrition =Max 10-20%
  5. Employee Attrition=Max 10-20%
  6. Proposal Win Rate=50-70%

“Begin with the end in mind” -Steven Covey

Envision Your Ideal Agency

Advance Retrospective: Envision your ideal future as if it’s already happened. 

A Guided Meditation

Imagine what your ideal day is like in about five years: Dec 31, 2025. This date is far enough away, so it can be perfect since you don’t necessarily know what will happen then. Turn your phone off during this meditation. 

Close your eyes if you feel comfortable. Start by taking two deep breaths, slowly. Now, move to Dec. 31, 2025. You wake up, and it’s your ideal day. It’s a Wednesday morning and the last day of the year. As you wake up, there are some things to consider. First, think about what is coming up today. What’s your schedule like? Is today structured or flexible? 

Think about who you are interacting with today. Are these people you knew in 2021, or are they new people? Now, think about the decisions you’re making today. What have you decided this year, and what’s coming up next year? What are the decisions you are making? 

How are you feeling? If you’re happy, what is making you happy? Are you stressed? Are you feeling good about the future? Why or why not? 

Keep your eyes closed for a little longer. Take a deep breath as you come back. Open your eyes. 

Now, do this writing prompt, and write whatever comes to mind. Spend several minutes thinking about this. 

Writing Prompt: “Today is Wednesday, Dec. 31, 2025. It's a great day because….” 

Common Themes: Your Ideal Future Agency

  • Build a stronger sales pipeline
  • Charge more
  • Pay yourself more
  • Reduce stress and hours
  • Improve your team 
  • Sell your agency

There are no wrong answers. 

Priorities: What to Fix First in 2021

Choose 1-2 problems to fix first in 2021. Common issues include the following. 

  1. Client budget cuts
  2. Over-staffed for 2021
  3. Struggling to raise prices
  4. Old services aren’t selling 
  5. Need more sales leads
  6. Or something else…

Write down which problems you want to fix. (1 or 2)

How to Solve:  Client Budget Cuts

Use the Negotiation Framework (Reason-Options-Choose)

  1. Cite a Reason
  2. Give 2-3 Options
  3. Let the client Choose

How to Solve: What if you’re over-staffed?

Agency Role Categories (Agency Structure) 

Make sure you always have coverage in all six of these roles. 

  1. AM: Account Management: Keep clients happy, identify ways to expand the relationship
  2. PM: Project Management: Deliver client projects and retainers smoothly and profitably
  3. SME: Subject Matter Expert: Bill their “craft” (design, development, writing, analysis, etc.)
  4. Strategist: Recommend how to maximize each client’s results while staying within their budget
  5. BizDev: Marketing, Sales, and Partnerships: Generate leads, close sales oops, and build partnerships
  6. Support: Operations and leadership: Ensure the business runs smoothly, both short and long-term. 

How do we raise prices? 

Use Reasons-Options-Choose. 

For existing clients, give them notice when raising prices. With new clients, just increase your expenses. You can also offer temporary discounts, but make sure they are limited. 

What services will sell best in 2021?

Be intentional about the services you offer. All of your services fit into three categories or Karl’s strategy triangle. 

  1. Think (Strategy)
  2. Teach (Training and Empowerment)
  3. Do (Implementation) 

How do we find more sales leads in 2021?

Potential clients/CMOs want your help, but they have trouble getting back to you. They’re busy and distracted. They have a lot of things pulling them in different directions. 

 As an agency, use your services in your marketing. For instance, if you do content marketing, make sure your blog is updated. If you do video, use it in your marketing. 

Free Opt-In

Get Karl’s Advance Retrospective template and his newsletter for agency leaders. 

Get a free opt-in: bit.ly/fixprofitleaks, or email karl@sakasandcompany.com


With all the great ideas you are getting from T&C, apply those ideas. Take at least one thing you have learned, and start applying it in the next week. Then, share it on Twitter with #TCS2020. 

What Do You Think?

If you watched this presentation or are familiar with Karl’s work, I want to know what you think. Leave a comment or tell a story below.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Available Now

Free Assessment:

Which Type of Expert Are You?

Take this FREE 3-minute personality test to find out what your expert type is and get a to-do list of things you can do to turn your superpowers into sales.