The short answer
Kurt Schmidt advises founder-led agencies, professional services firms, and consulting firms on pricing, positioning, and where their next clients come from. He was president and partner of Foundry, a custom software agency he grew from three people to fifty, and he has advised more than 150 agencies since. Schmidt Consulting Group is his firm, and most of what he teaches there he learned the expensive way.
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I advise agency founders on pricing and finding their next clients. As president and partner of Foundry, a custom software agency, I scaled the team from 3 to 50 people and led it through two Inc. 5000 appearances.
I've advised more than 150 agencies. Through Schmidt Consulting Group, I work with owners who want to grow beyond referrals or get out of every sale. I also run the Solo Club, a paid community for entrepreneurs. My short background page has more on my experience and how engagements work.
A branding and creative agency.
Deals lived in notes and email, the pitch changed depending on who was asking, and the sales forecast sat at $30,000.
We asked six of the agency's clients why the agency wins, rebuilt the pitch around what those clients said, and put every deal in one place the whole team could see.
Thirty days in, the forecast hit $250,000.
On a call soon after, the founder told me to cross out the $600,000 and write $350,000, because the gap was already closing.
Before agencies, I was a professional BMX freestyle rider. I co-founded Standard Byke Company with Rick Moliterno and Bill Nitschke.
My agency career took me to The Nerdery, where I built its first project management office and later became Director of Strategy. Then came Foundry and the chance to run an agency myself.
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If you're considering Kurt, come ready to accept new ideas and change. You'll have a great partner, even when you stumble.
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Agencies I work with that stay in a niche run profit margins of 30 to 50 percent. Other owners I know run at seven to 11 percent, because they take whatever project comes in the door. A niche is a margin decision as much as a marketing one. Taking any project that comes along is more varied and more fun. When payroll is due, the profit margin is what I think about. Doing the same kind of project over and over also makes you better at it. Listen to the episode
Margins drop for a lot of agencies somewhere between 12 and 30 people. Six to twelve is the stretch where an agency makes the most money and has the most fun, and the founder still gets to touch the craft. Past twelve, the margin falls while you sort out the layers in the company and which roles to hire next. At the same time you're working out who does the selling and what your marketing looks like. I call that stretch puberty. You're growing fast and your voice is cracking. The far side of it is where the business gets optimized. Listen to the episode
I guarantee 90 percent of your clients don't know everything you sell. They hired you to build a website or to run paid search. The rest of it is on your website, and a client has no reason to go back to your website once they've hired you. The quickest money in a slow stretch comes from the people who have already paid you. My advice is one pass a year through current and past clients, telling them the full list of what you do. I'd start with the ones who are hiring and growing. Listen to the episode
Proposals don't close deals. The deal is closed well before the client reads one, and the proposal is where the two of you work out the terms. When a proposal doesn't close, what went wrong happened in the meetings before it. The mistake I see most is an agency spending that first meeting talking about its own services and process. Listen and understand the buyer first, then explain your value second. Listen to the episode
Conversations about growing agencies, studios, dev shops, and consultancies.
Each week, I talk about growing an agency and the work behind it.
If referrals have slowed or every sale still needs you, I'd like to hear what's happening. We'll spend 30 minutes looking at your positioning and pipeline, then discuss what to do next.
