How Our $323K/mo Agency Burned Down

Alex Hartsuff

Sep 10 in General discussion💭

We built our ad + creative agency to $5M... then it burned down.

Here's a short warning story and how you can avoid it:

In 2020 I started an ad + creative agency with my two best friends. At first, it was awesome.

We grew quickly, the work was great, clients were happy, and it felt like every day we were making progress.

Our biggest differentiator (and why we were able to grow so quickly at first) was client acquisition.

We were really damn good at making great offers and closing deals.

But as we continued to scale past 100k, 200k, 300k/mo... That became our downfall.

While we put so much focus on closing new deals and growing our top line -- We failed to put in the same amount of work on scaling our systems & teams.

Oh, we hired people.. 50+ people in office (not the smartest move in retrospect lol)

We just didn't equip them with the tools or the resources to get the job done.

100% on us (as everything is on you as the founder)

The rapid growth dream-come-true quickly developed into my living nightmare:

--10-12 hour days, 7 days a week

--A calendar filled with justifiably angry client calls

--Frustrated and burnt-out employees

--Still trying to close deals every day while dealing with the rest of it (it's really hard to sell when your company is falling apart btw)

And, the worst part:

Waking up every day knowing I'd put myself here with no tangible end in sight.

In the end, we sold the company for much less than it was worth just to escape this monster we'd created.

Here's a few tips on how not to make the mistakes we did:

#1:

Put as much time into retention and delivery as you do new client acquisition. The only way to prevent building a client-chasing trap for yourself is to learn how to predictably deliver great work and get your clients to keep happily paying you month after month.

#2:

Focus on high-value clients you can predictably deliver impactful results for. Charge more. Take on less of the right client. Say NO to people you can't serve.

#3:

Keep your team & overhead as lean as possible forever. We burned literally millions of dollars on full-time, W2 employees and way too expensive office. You do not need any of that fancy shit. Contractors & remote teams. Always.

Hope this helps.

--Alex

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