5 Strategies to Strengthen your Financial Foundations

If you own or manage a marketing or creative agency, you already know that tracking revenue alone isn’t enough. Too many agencies focus solely on hitting revenue goals but neglect the big picture, profitability and cash flow. These are the two key indicators of a healthy business. Financial success requires the right tools, clear systems and a proactive approach to solving problems.

The good news? With today’s technology solutions and smarter ways to manage finances, it’s never been easier or more important to rethink your agency’s financial setup. In our blog this month we wanted to explore five practical strategies that will help you to build a thriving, scalable business.

1. Rethink your Pricing Strategy

When was the last time you reviewed your pricing? Many agencies hesitate to adjust their rates, especially when business is slow, or sales are challenging. But undervaluing your services can leave money on the table and hurt your profitability.

Start by reviewing your rate card. How much revenue does each team member generate based on their utilization rate? A 5-10% increase in rates can significantly boost your revenue and profit margins without requiring drastic changes to your services. According to?McKinsey & Company, even small pricing improvements can lead to a 25% increase in overall agency profitability.

ACTION:?Conduct a pricing audit to evaluate your rate card and calculate your revenue potential. Understand how much each team member contributes and simulate the financial impact of increasing rates by 5-10%. This exercise will provide a clear picture of how even a small adjustments can significantly impact revenue and the bottom line.

2. Build Resilience in Cash Flow

Cash flow issues can derail even the most promising of creative agencies. Many agencies still operate with razor-thin buffers, leaving them vulnerable during times of delayed or reduced cash inflows.? Cash flow management isn’t just about watching your bank balance it’s about understanding the full business cycle in your agency: from signing a client, project delivery, to payment collection. With client payment delays becoming more common, it’s crucial to prepare for the unexpected. While we can’t predict the future, a robust forecast and financial processes can prepare agencies to weather potential challenges, seasonality and maintain stability.

ACTION:?Create a 12-month cash flow forecast to map your income and expenses, identify gaps and set up a reserve fund to cover shortfalls. We typically recommend a 3-month buffer to cover all costs. Streamline your sales and invoicing process to shorten the time between signing a contract and receiving payment.

3. Empower your Team for Financial Success

Your team is one of your biggest assets and can be a game changer in achieving financial stability, but only if they’re aligned with your financial goals. To do that, involve your leadership and management teams actively in the planning cycle where you set the business objectives and financial goals. To get your team further involved in the running of the agency is a proven approach to improve engagement and drive performance.?

Train your team members to understand pricing, project profitability, utilization rates and how their work impacts the agency’s bottom line.

Equally important is hiring financial support you can trust. Whether it’s a financial controller or outsourced CFO (this is where we can help), having a pro on your side ensures better decision-making and takes the financial stress off your plate.?

ACTION:?Implement regular financial reviews with your leadership team and create clear performance dashboards with target metrics, like revenue per employee and project profitability. Use a shared scorecard to track progress and make goals visible across all of your teams. Additionally, look for ways to benchmark yourself against other agencies, and those that are best-in-class. Remember that transparency fosters accountability and ensures everyone is aligned with the financial goals of the agency.?

4. Harness Technology to Streamline Processes

Running an agency without the right tools is like sailing without a compass. Agencies often juggle multiple systems for billing, payroll, and reporting. Without the right tools, you risk inefficiencies and costly errors. Implementing cloud-based systems like QuickBooks or Xero is no longer optional, it’s essential. Pair them with other specialised tools like?Scoro,?Accelo, or?Float?for project management;?Apron?for supplier payments;?Chaser?for credit control; and?PLEO?for team expenses. These are just a few examples of apps that can significantly speed up how you manage your financials. The financial landscape is changing rapidly and agencies that adapt by leveraging these tools will position themselves for greater efficiency and resilience.

ACTION:?Review and upgrade your financial toolkit to integrate cash flow, project profitability, financial reporting and credit control systems. Choose tools that suit your agency’s specific needs and automate as much as possible.

5. Focus on Profitability with Smarter Client Management

Let’s talk about growing your existing accounts something many agencies overlook because they’re often too focused on chasing new business. However, your current clients often hold the most potential. Regularly analyse those accounts to spot opportunities for upselling, expanding services, or offering complementary solutions. Train your team to not just manage these relationships, but to actively look for ways to add value and boost revenue.

Of course, growing accounts isn’t enough if they’re not profitable. This means you’ll have to dive into a detailed profitability analysis for each client. Compare the revenue they generate against the direct costs of servicing them. This helps ensure your efforts align with your financial goals and that every account positively contributes to your bottom line.

ACTION:?Conduct a profitability analysis by client. Start by listing all clients and categorising revenue generated versus the costs associated with servicing them. Next, analyse metrics like time spent on projects versus the revenue they bring in. This doesn’t have to be a time-consuming process. Start with 2-3 projects or client accounts. Results of such analysis often leads to surprising results and are eye-opening!

The Key to Agency Growth

Running an agency comes with its fair share of challenges and headaches, juggling cash flow, team challenges and keeping everyone on track with financial goals. Balancing creative output with financial realities is tricky and it’s no wonder many agencies struggle with inconsistent profitability even as revenue climbs. But better financial oversight can fix this disconnect.

Strong financial foundations don’t stifle creativity—they make it possible.

If these strategies resonate, it’s time to take a deeper dive into your agency’s financial health. At CFO for Growth, we offer a?Financial Health Check—a free tool designed to provide actionable insights into your agency’s strengths and areas for improvement. You’ll get a personalised scorecard and expert guidance to streamline your financial operations. Click HERE to find out more.

At CFO for Growth, we specialise in empowering agencies with tailored financial solutions, by building their financial foundations to help them to scale. From pricing audits to cash flow management and advanced forecasting, our team is here to guide you every step of the way. Let us help you turn financial complexity into growth opportunities.

Click HERE to book a free strategy call today and let’s build a strong financial future for your agency together.