#59: What Most Agencies Don't Want You to See
Most agencies look great from the outside.
The positioning is polished. The case studies sound impressive. Referrals keep coming in. Clients seem happy. Revenue isn’t falling off a cliff.
But in my work advising agency owners, I’ve learned something that’s almost universal:
Every agency has chaos hiding behind the curtain.
In this solo breakdown, I want to document a real, anonymous agency I analyzed recently. Not to shame them but to show how subtle operational gaps create invisible ceilings. Ceilings that cap growth, strain margins, and quietly burn founders out.
If you’re an agency owner between $0–$3M ARR, there’s a strong chance you’ll see yourself somewhere in this story.
The Polished Story This Agency Told the Market
On paper, this agency looked solid.
They positioned themselves as a boutique, senior led performance shop operating at the intersection of paid search and CRM. Their core belief was simple but compelling:
“Stop counting form fills. Start measuring the pipeline.”
They framed themselves as a problem first, not pitch first. Sales calls focused on diagnosing issues instead of shoving a solution down a prospect’s throat. Their reputation brought in business through referrals, word of mouth, and account expansions.
From the outside, they promised:
Organized, proactive delivery
Clear definitions of success
A steady cadence with no surprises
Senior talent without bloated red tape
And to be clear, none of that was a lie.
But when I looked under the hood, I found something far more common than most founders want to admit.
What Was Actually Happening Behind the Scenes
The agency wasn’t broken but it was fragile.
There were structural weaknesses quietly undermining agency scaling, operational leverage, and profitability.
1. Inconsistent Sales Driven by Referral Dependence
Yes, referrals were working.
But referrals made sales lumpy and reactive.
There was no formal sales motion. No repeatable conversion system. No choreographed path from lead to close. When referrals slowed down, anxiety spiked.
Worse, their positioning didn’t reflect where they actually delivered the best results. They knew their strongest outcomes came from combining Google Ads with CRM but their market facing message stayed broad.
The result?
Generic outreach
Vague proposals
Weak pricing power
This wasn’t a sales problem. It was a positioning problem.
2. Foggy Profitability and Hidden Margin Erosion
Like most agencies, they weren’t tracking client level labor and tool costs.
That meant bundled offers quietly eroded margins. Profitable clients subsidized unprofitable ones. Leadership had no visibility into which accounts were worth keeping and which were quietly draining resources.
You can’t optimize profitability if you can’t see it.
And you definitely can’t scale what you don’t measure.
3. Weak Delegation and Founder Bottlenecks
Onboarding wasn’t standardized. There were no scripts. No visuals. No momentum building “wow” moments early in the relationship.
Internally, roles lacked:
Defined outcomes
Clear scorecards
Consistent feedback loops
That made delegation risky.
When founders don’t trust the system, they don’t let go. And when they don’t let go, they stay trapped in delivery instead of doing CEO work.
4. Hiring That Felt Like Gambling
Only about one third of new hires worked out.
Why?
Poor job descriptions
Overreliance on referrals
No structured vetting
No reference checks
Most agencies say they have values. This one did too.
But they couldn’t define them.
Uncodified values create random hiring outcomes. When values aren’t embedded into hiring, delegation, and delivery, you’re playing roulette with every new role.
The Real Root Causes (And Why This Happens Everywhere)
On the surface, this agency looked mature.
Underneath, the real issues traced back to four missing foundations:
Undefined ICP and vertical authority
No documented onboarding system
No client-level financial visibility
No operational scorecards or SOP library
These gaps created reactive delivery cycles, pricing pressure, wasted time, and constant context switching.
This isn’t uncommon.
Most founders build agencies because they’re great at delivery not because they’re great at operations.
Eventually, that mismatch shows up.
Phase One: Stabilize the Foundation (First 30–45 Days)
Before you scale, you stabilize.
Step 1: Codify Core Values
I’d start by defining 3–5 core values that are:
Observable
Enforced
True to the founders
Each value needs:
What it looks like in action
What behavior violates it
These values must show up in sales, hiring, delivery, and performance management or they don’t matter.
Step 2: Tighten ICP and Vertical Positioning
Next, I’d narrow positioning around the agency’s proven service.
That means:
One core ICP
One or two verticalized offers
Proof tied directly to those outcomes
Specificity creates authority. Authority creates pricing power.
Step 3: Turn On Financial Visibility
This doesn’t require fancy software.
Just a simple sheet showing:
Client revenue
Client-specific labor costs
Client-specific tools
This instantly reveals which accounts fuel profitability and which silently sabotage it.
Phase Two: Operationalize and Scale
Only after the foundation is stable do you earn the right to scale.
Build a Scalable SOP Library
I recommend a lightweight documentation method:
Team member screen-records themselves completing a task (using Loom)
They narrate what they’re doing and why
Transcribe the video
Convert it into a checklist SOP
This creates documentation in minutes. not weeks.
Start with:
Onboarding
Client communications
Flagship offers
Upgrade Hiring Systems
Hiring needs friction.
I’d implement:
Values based job descriptions
Asynchronous video screening interviews
Structured one on one interviews
Optional test projects
Mandatory reference checks
Skipping reference checks is one of the most expensive mistakes agencies make.
Install Role Scorecards and Feedback Cadence
Every role should have:
A mission
Clear outcomes
Core competencies
Examples of values in action
Feedback should happen bi weekly at first, then monthly.
This creates clarity, confidence, and accountability without micromanagement.
Phase Three: Client Experience and Leverage
Once operations are stable, leverage follows.
Design a Visual Client Onboarding Roadmap
I’d create a visual roadmap showing:
What happens
When it happens
Why it matters
This should be shown:
Pre-sale
At signing
During kickoff
People need repetition. If you don’t set expectations, clients will create their own.
Engineer Early Wins and "Wow" Moments
Every client should have a simple wow strategy.
Small, thoughtful actions early in the relationship build trust and emotional equity that pay dividends later.
Tie SOPs to Timelines
“Done” can’t be ambiguous.
When SOPs align with delivery timelines, execution becomes predictable instead of reactive.
Layer AI After Systems Exist
Only once SOPs are documented would I run an AI opportunity audit.
AI should:
Support reporting
Assist QA
Improve communication consistency
Not replace thinking.
What Happens If This Agency Executes for 12 Months
If they follow this path:
Sales become repeatable instead of luck-based
Delivery feels lighter and more controlled
Margins improve as unprofitable patterns disappear
Founders shift into true CEO work
Teams operate from clarity, not guesswork
Client retention and expansion increase
This is how agencies move out of heroics and into systems.
The Bigger Truth for Agency Owners
Most agencies are messy behind the scenes.
That’s normal.
But growth doesn’t come from pushing harder. It comes from slowing down, fixing the foundation, and building systems that support the promise you’re making to clients.
If this breakdown felt uncomfortably familiar, that’s a good sign.
It means you’re ready for the next level.
If you want to go deeper, you can run the full version at agencyuplift.co/mini.
Even if you never book a call, the clarity alone is worth it.
