The Four Benchmarks of an Agency's Life Cycle—And How to Profit From Them

When starting an agency, the road ahead is dark and it can help to think in stages. Milestones and targets will guide the way and allow you to maintain focus as you grow. There are four stages in the life span of a marketing agency, each with their own strategic priorities and benchmark metrics.

The startup stage focuses on finding customers and proving the value of the agency, with gross revenue as the benchmark metric. Survival depends on increasing earnings and gross margin dollars. Growth requires profitability, and the exit stage should focus on EBITDA to increase the agency's valuation.

Benchmarking is also beneficial for sales, marketing, and customer support, and leaders should focus on where leads originate, billable employees, and payroll costs relative to gross profit. With the right metrics, building a marketing agency from scratch can become a series of successful experiments.