The mission

This video provides an introduction to the course, setting out who it is for, the mission for what we want to achieve, and summarising a few of the things we'll cover to get there.


Hello, and welcome to this course from Convivio about healthy agency finances. I'm Steve Parks.

I'm going to be leading you through a number of modules in this class. And one of the things I wanted to start by is sort of setting out the mission. What are we here to focus on? Now, of course the focus is healthy finances, but that could mean a range of things.

So the first thing I want to stress about the finances part. So this is a course for agency leaders, rather than for accountants or finance directors and so on. It's very much for people who have come up through the business or started an agency from being a freelance or something. And aren't from a financial background. They're getting to grips with how money works in a business.

And in particular in an agency business, which is a very different business model from most other types of businesses. So the finances part of this is not technical. It's not proper accountancy. A lot of accountants might look at this and go, it's not quite what I would do, and that's fine because there is a place for that. Businesses need accountants. They need finance directors to do all of that level of detail and precision. But that's not what we're for in this course. What we're here for is to help the leaders get a grip of the finances and understand a little bit more about the machinations behind the scenes.

How does money work? How does it come into a business, work within the business and how does it go out? And how can we get a better feel for that as business leaders? And the healthy part of that is key because we want to be able to be more proactive. We want to be able to look ahead more than just being reactive and looking back so much of what agency leaders look at from a finance point of view is how did we do last month, or last quarter, or last year. And looking at that, you know, how did we do against forecast. And not a lot of looking ahead about what might happen.

So we're going to take a look through this course at how agency leaders can get a better, healthier grip on finances by understanding how it works, and by getting a sense of what metrics to be looking at and how to forecast more healthily within the business.

So that's what we're going to cover in the course. There's lots of different modules within that and you can work through it at your own pace. There's absolutely no rush, but, what I really suggest you do is try and work through it within no more than a couple of weeks so that the ideas stay fresh in your mind. And then you can actually get on with putting it into action within your business. And if you really want to do block out half a day and your calendar, which is, you know, the most amount of time it will take, and you can just do this in one, go for it. Then you can delve back in and dip back in to different lessons at different times for you to get a refresher because you'll keep access to this course for as long as you need it.

And of course we're happy to help out my email address is [email protected]. You can email me anytime with questions, and me or a colleague will pick up and we'll help you get to grips with some of the concepts that we're talking about here. We really want you to succeed with this and to get to grips with finances in your agency.

Why do we think this needs to happen? Well, because at the moment, a lot of agency finances feel a bit like that [shows graph of big rise and fall]. Not sure if this graph is familiar to you in any way at all, but a lot of agency leaders give a sort of wry smile when they see this, because we've all been here at one stage or another, as we've got to grips with how agencies work.

And that is that, all the time you're bidding for big new projects. They come through the system, you get excited, you ramp up, the sales are going high. It's great. Then that big project is done and the team rolls off. But the team's got nothing else to do because the other teams are off on other things. Perhaps this team has to sort of hunt what it eats. So it's got to get selling and the sales go down and suddenly it's up again and all over the place. And the pattern just keeps repeating round. Boom and bust boom and bust. Um, and it's very difficult to lead an agency in that situation. Very difficult to plan for the finances.

So there has to be a better way because at the moment, this is kind of the emotional experience of what it's like to run an agency [plays video showing a ride on a rollercoaster, Steve narrates over the video]. You start off. Yeah. We've got a plan. We can do amazing things. Look at that we're going up. Oh, damn. We've lost our biggest client. What are we going to do? Replan replan re-forecast. Uh, we've got to figure out a plan, get selling, get selling. Okay. We've got a pitch. We've got a pitch. We won. We won. Great. Make a new plan. We're going forward. Yes. We're going up, up, up. We're going to grow. We're going to grow. Oh my God. We've got to recruit. We've got to recruit quick. Oh, there's a shortage of talent in the market. Oh. Now, wages are going up and... [finishes narrating video]

Yeah. And you'd get the point. Basically. It's a roller coaster ride and that's what it feels like. For every agency leader at some stage in the growth, some of the really difficult growth bits in agencies are going between 10, 15, 20 people. And then going between 25 or 30 and 50ish. Those are two of the hardest growth points. And then there are other growth points at higher levels. Getting past a hundred is a tricky one. But the hardest ones are those first ones, because that's where you've got to put in place the systems and the processes and the ways of thinking about running an agency rather than it just being shooting from the hip.

So we're going to try and get away from things being a roller coaster ride and into being a little more proactive and under control for you as an agency leader. And that means we're going to have to change a few of the ways that we do things. And at the moment, agency forecasting is a lot like this [shows slide of fortune teller]

You get together with your management team. Once a year, you gaze into your crystal balls and you imagine, what could the business be like in a year's time, two years' time, five years time, it's going to be amazing. And of course you set out this target as the leader: I would like us to have twenty-five percent growth this year or 50% growth. And guess what? The forecast comes back. Yes. We're going to have 25% growth. Yes. We're going to have 50% growth. And with all these kinds of assumptions in there about, oh, we'l probably win a client this big or we'll probably be able to keep costs this low. And you've made this plan that's based on thin air.

And by six months in it's blown out of the water. It really is like reading the tarot cards or like gazing into this crystal ball. Forecasting can be better. It can be more useful, but in order to make it more useful, we've got to change our approach. In this course, we're going to look at a more agile approach to forecasting.

Agile assumes that you don't know everything you need to know at the beginning of a process, and you need to go through a process of learning and adaptation in order to get to the best results. And we're going to do the same thing with forecasting so that you actually have forecasts in the business that are useful to you.

As the agency leader, and you can make decisions on them and you can easily, and, um, you know, without spending a huge amount of time on it, you can, reforecast on a regular basis and you can track how your forecasts are changing to check the direction of the business. That's what's useful. So we need a lightweight, adaptive forecast, and we're going to be lucky.

Uh, the other thing is we need sort of better measures, better metrics of how healthy the business is and how we're doing towards our target. Now, at the moment, it can seem that a lot of the controls and reports and things within an agency feel a bit like this. This is the cockpit of an Airbus.

I think it's the A380 or something like that. But you look at this and think what the hell do all these do? How could you fly this? Because you know, over here, you've probably got the data from the CRM here. You've got some sort of marketing dashboard thing here. You've got a spreadsheet from sales here. You've got spreadsheets from accounting. Here's some dashboards somebody put together at once some stage and it's very manual. And here you've got various other systems feeding data into you that you, as a leader have got to interpret. And you put yourself down in the seat, you look around it and go, how the hell am I supposed to know whether we're flying healthily or we're going to crash, or there are mountains ahead. How do I tell from all of these varied source of information?

So again, we want to get to a better sense of what are the measures we should be looking at, as leaders, for the business to know how healthily it's doing and whether we're moving in the right direction towards our goals.

So that's what we're going to be working towards with the measures. So we've got forecasts and we've got better metrics on the business as well, but also we want to get to a sense of thinking about the business and the finances within a business that don't make an agency leader go like this. You can tell how cool I am by how up-to-date my memes are.

Too many times, agency leaders look at spreadsheets or all sorts of figures output from accounting programs or whatever. And it's just like this maze of numbers.

I remember one of the things that prompted me to do this whole project on healthy finances. My business has grown and we'd merged together a number of different agencies and I, and my business partners, were now running an agency that was 170 people in nine countries and we'd hired a guy to be CFO. He was from one of the big five accountancy firms, and one of my business partners was an MBA, and they got so excited about "we're going to create the perfect spreadsheet", and that perfect spreadsheet was never delivered.

But in the meantime, there was all these different spreadsheets all with different things, pages and pages and pages of stuff in different places. And at the monthly board meetings we'd be wanting to get a handle on how things are going and there'd just be loads of numbers. They weren't giving us a good feeling of how for the future direction. When I realised that this perfect spreadsheet was never coming up, I decided to research and figure out what are the few key things we could really be measuring as a business. And how could we be thinking about our finances?

Because we've now got a responsibility. You know, when your wage bill is kind of over a million a month, you start to feel the weight of responsibility of it more,and making sure things run smoothly. So I wanted to get to understand how money works in an agency beyond just, you know, that agency leaders instinct about, I reckon we're doing all right, or I'm a bit concerned about something and then trying to find it in those numbers.

I wanted a way of thinking about it that gave me and the rest of the team that real insight that could give us a view onto the health of the business. So that's what we're looking for. Something that we as agency leaders can understand. Don't panic. It is going to be understandable. It's going to be simple.

It's not going to be loads of financial jargon. I have agency leaders come away from this course when I'm doing it in person or on zoom where they're just like, I can't wait to put this into action. It just makes so much sense and makes things simpler. So that's what you're going to come away from this course, with this idea that you're going to be able to get more control on what's going on in your business.

And you're going to feel more in control of results. And it's going to be about having healthy finances and feeling that you are in charge of the money rather than the money being in charge of you. What we're looking for from healthy finances, and that we'll go through on this course, is having metrics that give us a good sense of a health check for the business.

A good sense of where we're at, how we're doing, and are we headed in the right direction. And a weather forecast rather than fortune telling. A weather forecast is based on the best available data now. And then we look forward from there at what might happen from there, likely scenarios based on the data that we have now and the healthy finances approach needs to be a really good, you know, at a glance brief for the agency leader, somebody who's not financial, should be able to look at the metrics that we come up with and get a really good idea of how that agency is doing right now.

And then have it as a prompt for conversation so that you, as the leader can go to different people in the business and say, look at this. What does that mean? And why are we seeing that? You know, what's the story behind this? So all of these are sort of indicators of a story. Prompts for conversation for you as a leader to have.

So that's what we're looking for. Really, it's a really practical toolkit. There's certain ways of thinking about agency finances to understand them, and then certain ways of putting them into action and displaying some of these figures so that you can get to grips with it. And, later on in the course, we'll actually start looking at how to turn this off into a dashboard so that you've got a better view.

We came up with a very basic prototype in Google sheets that you can take a copy of and run with and start adapting either into a dashboard for you or taking some of the ideas and using in your own financial reporting software or your own dashboard so that you can build in those ideas.

And the aim is we want to get you to a smooth journey like this. We want to avoid that roller coaster ride. We want you able to look ahead and see where there might be problems and adjust your plans in good enough time, being proactive, working on the business so that you get a smoother growth journey as an agency, rather than the boom and bust.

So that's the plan. Join me on this course, as we work on your healthy agency finances, and believe me, by the end of it, you're gonna be excited about it. Bizarrely. That's one of the things I hear from leaders who take this course is that at the end of it, they can't wait to actually go and put some of this into action, because finally it all seems to start making sense.

It clicks with what agency leaders kind of know, inside, about the business already, but it provides a way of thinking about it, a structure, a way of communicating about it that allows what's kind of in inside to match up with what's going on with the money in the bank. So you're going to enjoy it. I know that sounds bizarre for thing about finance, but I promise you.

I'll see you in the next lectures.

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