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building an agency and scaling it is super hard. only very few do it.
starting one is super easy.
thus, every idiot who thinks they can become billionaires without getting a degree and starting a business thinks this is an easy route.
i am dissing for a totally different reason.
ofcourse, the old jason wouldn't be explaining this since people know my position, but there 8k new people here.
so explaining context.
i saw someone saying he earned millions in profit within this many years running an ad agency.
i literally have friends who run agencies, bigger ones and everyone can tell me how fake that was.
just pointing a brutal fact on how hard it is to build and not easy like these wannabe influencers show.
let me give you an example.
you are running an agency which builds simple webapps for customers.
you have told the client that you'll deliver the project in 2 months.
for easy calculation, I am going to put some numbers.
let's say you have quoted them INR 1 lakh for the same.
you have 4 resources who can work on this. your calculation is,
you are paying 20k INR for each. so 80k INR is the cost involved. 20k INR is your profit after two months of work.
so you sign the contract.
50% advance is sent by the client.
you have been sent 50k INR to your bank account.
you have built half way, you are showing to the client.
client goes way off what was in the requirement document.
omg. you are learning about requirement docs now. you have never made one, and signed it as part of the contract and now you understand it as a harsh lesson that the requirement is either expanding or has completely changed.
90% of agency owners won't even find this mistake until they are already deep in trouble. customer satisfaction being the primary goal - they'll miss it.
deep in trouble on the sense, they'd have done this mistake for a lot of clients.
now let's come to the next problem.
no set time in reviewing drafts or timelines.
you send what you have completed. the client needs to respond back. because most projects involve talking to the client front and back so you can complete it.
what happens? you send something for the client to review. they'll review it and send an answer after one week.
lmao. you only have 8 weeks to finish the entire project.
what happens next?
even then when they get back to you, troubles that I explained due to lack of water right requirement doc. will eat you alive.
now,
the project extends to the third month.
your profit of 20k INR is no longer there.
first month expense - 40k INR
second month - 40k INR
third month - 40k INR
you are now in 20k INR net loss and profit loss.
this is dependent only if its for the third month. i have seen 2 month projects extending for over 10 months.
sometimes, clients will pay 50% and the next 20% at mid way of the project - and the last 20-30% becomes super difficult to collect.
collecting invoice dues is a separate headache in an agency business.
sometimes agency owners get super excited working for big companies and MNCs.
they would not know that vendor onboarding is a big compliance. nothing gets paid upfront and you can only get money after work is done.
they eagerly accept it because it's a brand they'd want to show on their customer list. they think this will attract them more other clients.
they also won't know that big co's are tough to work with, decision making times are super long and payment cycle? after you complete all the work - minimum 60-90 days billing cycle.
the compliance there will be another set of headache where you'd put much more hours into it.
all of this is for one project. multiply that over countless number of projects ?
you have a huge pile of steaming shit that gets complex to scale every day.
and retaining employee talent (which is the most crucial aspect of your business) is another hard work.
that's exactly why it's super tough.
when I am dissing, i do that with a deep reason. i exactly know what i am talking about. i know every mistake an agency owner will make in their first 10 years.
have been through them all. have first hand experienced it all.
show an agency owner my stories and ask them if all are true.
I'll wait.
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