8 Most Common Mistakes of Agency Owners that Can Cost Big-Time

Mistakes are a natural part of being human, but as an agency owner, some mistakes can cost you dearly—leading to frustrated clients, revenue loss, or even burnout. Running an agency is no easy task, and along the way, you’re bound to hit a few bumps. Whether you’ve just launched your agency or you’ve been at it for a while, it’s easy to fall into traps that can cost you big time.

Here, we’ll discuss:

• The nature of those mistakes ranges from pricing problems to failing to define their position in the market.

• The potential consequences of making mistakes as an agency owner.

• How to avoid making the same mistakes in your own agency. 

Top 8 Common Mistakes By Agency Owners

1. Working IN the Business, Not ON The Business

If you spend most of your day-to-day dealing with the minutia of completing client work, you simply can’t expect your agency to succeed to any great degree.

Sure, you love the work you do, but you decided to start an agency for a reason, and handling all the project tasks yourself probably wasn’t it.

In fact, we hope that wasn’t it, otherwise, you’d be much happier closing the doors and focussing on a freelance or independent contractor career instead.

Of course, that passion for the creative process is still an invaluable asset, but only when it’s channeled correctly.

As an agency owner, your passion will serve you best when you’re using it to inspire clients to work with you.

That’s not to say you can’t ever get down in the weeds and get your hands dirty. Of course you can, that’s all part of the fun of agency life.

However, if you spend more time in the weeds than conquering the forest, you’ll quickly run into problems.

Think about it:

• What happens when this project that you’ve been spending all your time on comes to an end?
• Where is the next project coming from?
• What are you going to do if a once-regular client decides to shift their strategy and, thus, no longer need your services?

If thinking about those questions filled you with even a nano-ounce of dread, you may be guilty of making this mistake as we speak.

You can turn things around by freeing up more time to work ‘on’ your business instead of in it.

Practice getting comfortable with your team and having more responsibility. They know what they’re doing. If they didn’t, you wouldn’t have hired them.

While others are producing amazing work for your clients, use the expertise and enthusiasm in what you do to convince potential clients that you’re the best agency to hire.

The more you do that, the more you grow, and the less you have to worry about where to find the next client.

2. Underestimating the Full Scope of Work

There are consequences of doing more work for existing clients than you do finding new ones.

Perhaps the worst is that any time you do attract a potential new client, you’re in so much of a hurry to seal the deal and keep your agency alive that you overlook important details.

Eager to land that next contract, some agency owners simply don’t take enough time to really analyze what their clients are asking for.  This can lead to missing features, faulty deliverables, or unique obstacles that could have easily avoided had only they taken the time to really get into the nuts and bolts of the project.

As a result, Scope Creep rears its ugly head, costs soar, and clients are unhappy.

That’s why it’s so important that you don’t rush these things.

Take your time and pay close attention when talking to a new client about their project.

On a similar note, be the kind of leader who trusts the expertise of their team members. Bring in the specialists and talented professionals who’ll be bringing this project to fruition. Get their input on what’s possible, what resources are needed, and what challenges may lie ahead.

Trust their feedback, and allow it to inform the decisions you make. By doing so, you not only provide a more realistic proposal but also avoid projects spiraling wildly out of control.

3. Shuffling Projects Between Different Team Members

Knowing exactly what needs to be done to complete a project can also help you avoid our next mistake:

Relying on different people to complete the same project.

At first glance, this may seem unavoidable if you outsource work to freelancers or contractors.

That freelance developer you hired may have completed the assignment as agreed, but now that the client wants changes, that same developer is unavailable.

It’s a common challenge, especially for agencies that are still in their infancy who then have to invest valuable time and money finding someone else to finish the job.

What’s more, creative professionals typically have differing styles and levels of quality, creating inconsistencies in the final product.

The mistake here is not about hiring freelancers, it’s about not communicating expectations and not building the kind of strong working relationships that lead to freelancers being eager to prioritize your work.

4. Pricing Too High or Too Low

If there’s one mistake we’ve seen more agency owners make than any other, it’s not charging the right price.

Pricing Too Low

In some cases, this means underselling themselves by quoting significantly lower than the going rate.

Sure, in a few very specific circumstances, it might make sense.

For example, if you’re a brand new agency without an impressive portfolio of genuine client work, price may be the only thing you have to compete on.

So the mistake isn’t doing what you need to do to get your foot in the door, it’s to continue doing it long after you’ve passed through that door into the realm of being an established agency.

In other words, there has to come a point where you stop and reevaluate your worth.

In a competitive market where every penny counts, few -if any- businesses are investing in a new WordPress website just to say they’ve got one.

They’re commissioning you because the product you create for them provides genuine value for their business, helping them to generate leads, increase sales, or achieve some other key outcome ultimately tied to their bottom line.

So, you deserve to be fairly compensated for that value.

If all this is ringing alarm bells for you, you’ll find our advice on overcoming this mistake in how to price your WordPress development services.

Pricing Too High

At the opposite end of the spectrum, there are those agency owners who charge excessive prices or sneak hidden fees into the final invoice.

Sure, nobody can blame you for wanting to run a fiscally successful business, but when you stretch your profit margins too far, eventually, something’s got to give.

If you’re charging significantly more than your competitors, you’re inadvertently making those competitors an attractive option to clients who need a WordPress developer but still need to keep a close eye on their budget.

5. Not Identifying a Clear USP

Of course, you may well be able to justify your higher-than-average pricing if you can demonstrate a clear and compelling Unique Selling Point (USP).

Rookie agency owners typically have a good idea of what they can offer clients but frequently make the mistake of not identifying how that offer makes them different from other companies.

That’s what a Unique Selling Point is. It answers the ultimate question that every agency boss should ask themselves:

What does my agency offer to the clients that they can’t get anywhere else?

The more specific here, the better.

For example, “excellent customer service” sounds great in your marketing campaigns, but what exactly does that mean?

How is it excellent?

To be precise, how is it more excellent (i.e.: better) than any of your competitors?

• Is it a unique, novice-friendly client portal suitable for non-tech-savvy clients?
• Is it your availability and response times?
• What makes your customer service so “excellent” that clients can’t get it from any other company?

Having said all that, it’s not enough to simply know your USP.

You need to communicate it to clients and then, more importantly, back it up by delivering on your promise.

For example, if you have a unique skill set in WooCommerce optimization that sets you apart from the crowd, that’s the message you need to get across to potential clients.

Ecommerce is still big business, with global sales expected to topple $6+ trillion USD by the end of 2024.

So there’s a big demand out there for skilled developers, especially those who can deploy their exceptional talents to give clients a competitive advantage.

6. Over-Selling Their Capability

Promising clients more than you can deliver means setting yourself up for a battered reputation and upset clients.

In terms of skill set, this would be like boasting that you’re an eCommerce specialist when your experience begins and ends with setting up a default WooCommerce installation.

It might be fine to include WooCommerce as part of your overall offer, but by no means should it be the focal point of your marketing efforts.

Imagine the potential backlash against your agency if you positioned yourself as an eCommerce specialist and took on an elaborate project that you then couldn’t complete.

Instead, concentrate your efforts on more realistic selling points that you’re confident you can back up with tangible results and satisfied clients.

7. Failing to Manage Client Expectations

Sticking with the theme of over-promising, avoid saying yes to unrealistic time frames and budgets.

This next mistake we most often see among those new to the industry, but it wouldn’t be the first time we’d heard of an agency owner so eager to work with a particular client that they bit off more than they could chew.

For example, agreeing to complete a project in a week when it would usually take you a month isn’t going to make anyone happy, especially if the client’s budget doesn’t allow you to take on all those extra sets of hands you’d need to meet this impossible deadline.

Do so, and you risk a one-way journey to burnout and diminished profits as you work around the clock and spend more than anticipated on outsourcing additional support.

That’s assuming you even get the job done.

Saying yes to a project that stretches your resources beyond their limits and that you ultimately don’t complete on time can lead to:

• Annoying the client to the point that they refuse to work with you again
• Losing income when the client doesn’t pay for a product they didn’t receive
• Harming your reputation when the client tells others about their experience with you.

In our experience, the majority of clients are reasonable people. They’re turning to you for your expertise and expertise, so don’t be afraid to draw on that experience and be transparent with your clients about what’s actually possible.

It’s a much more successful strategy than running your agency into the ground over an impossible goal.

8. Not Defining Their Audience

Most -if not all- of the previous mistakes could easily be avoided if only more agencies really took the time to define exactly who their services are for.

The biggest culprits here are agency owners who take the old-fashioned “no job too big, no job too small” approach, casting their net far and wide to simply attract as many clients as possible.

This is rarely the most effective way to grow a successful agency.

After all, the bait used to catch big fish is not the same bait used to catch small fish.

To put that another way, the kind of strategy used to land a contract with an enterprise-level company isn’t the same kind of strategy that works with your average SMB.

If you want to land enterprise-level clients, pitch yourself as an enterprise-level agency

If you want to offer affordable WordPress services to growing businesses, position yourself as such.

Naturally, size is only part of the equation when it comes to understanding your target audience and communicating with them.

Some questions you can ask to help you with this include?

• What kinds of businesses do your clients run?

• Are they in a specific sector such as finance or entertainment? Perhaps they are other agencies looking for a white-label partner.

• What kind of budgets do they usually have to invest in services like yours?

The more you know about the kind of client you want to work with, the better position you’ll be in to pitch your services to meet the exact needs of that type of client. The more you do that, the greater your chances of getting them on board.

Think about it:

When you know, for example, that your ideal client is an SMB in the IT industry, you can:

• Develop a Unique Selling Point that directly appeals to that type of business
• Get a better idea of how to price your services accurately and fairly, without selling yourself short or ripping anyone off
• Understand the scale and scope of the kind of projects growing IT companies typically want to invest in and ensure that you’ve got the resources needed to complete such projects.

Avoiding Mistakes as an Agency Owner: Final Thoughts

It may be a cliche, but if there’s one thing we’ve learned through both our own experience and that of others, it’s that honesty really is the best policy.
Especially when it comes to running a successful agency, where the key to avoiding common mistakes usually comes down to:

• Being honest with yourself – About your goals, your capabilities, and your worth
• Being honest with your clients – About what you can deliver, at what time, and for what price:

And if all that honesty leads to the realization that you need a helping hand? Consider how white-label services can make all the difference when it comes to balancing that fine line between profits and pleasing clients.