The 10 FTE Wall: How to Scale Your Agency Past 10 Team Members

Scaling Your Agency: Navigating the Challenges of 10+ Employees

As an agency owner, hitting the 10-employee milestone is a significant achievement.

It's a moment to celebrate, but it's also a critical juncture that demands a shift in mindset and operations.

In this post, we'll explore the challenges you'll face as you scale past 10 full-time employees (FTEs) and provide actionable advice to help you navigate this exciting yet demanding phase of growth.

The Psychological Shift

Before diving into the operational changes, it's crucial to understand the psychological challenges you'll face. Gray MacKenzie, CEO of ZenPilot, an agency operations consultancy, emphasizes the importance of recognizing your accomplishments:

"The bigger lesson is: what's the skill sets that you're learning? How are you developing and improving your capacity? You might 10X this business and be at a hundred people in two years, and look back and just laugh at the fact that you thought this was a lot of money now. Or this could all crash and burn. Either way, you're developing a skill set."

This perspective shift is vital. Instead of focusing solely on the end result, view this phase as an opportunity to grow your skills and capacity as a leader. Here are the key areas to focus on:

1. Prioritization: You can no longer do everything. Learn to identify and focus on high-impact tasks.
2. Forecasting: Develop the ability to predict trends and challenges in your business.
3. Decision-making with incomplete information: Get comfortable making decisions without having all the facts.
4. Clear and direct communication: Improve your ability to communicate effectively with team members, clients, and partners.

Operational Changes

As your agency grows, your role needs to evolve. Here are the key operational shifts you need to make:

1. Create the Next Layer of Leadership

At 10+ employees, you likely have too many direct reports. It's time to build a leadership layer. Gray advises:

"You need to push to get out of delivery as soon as possible. So you need a strong hire who can be your Head of Delivery, or whatever you want to call that: Head of Client Success, or Director/VP of Operations."

This person should be responsible for client success, but be cautious about overwhelming them with all operational duties. You may need to separate client success and team management roles as you grow further.

2. Move Out of Delivery ASAP

To scale effectively, you need to focus on growth. This means stepping away from day-to-day client work. Gray emphasizes:

"If you've got ambitious growth goals, 40-50%+ of your time needs to be going towards the growth side of the business."

This transition can be challenging, especially if you enjoy the work. However, it's crucial for sustainable growth. Consider hiring a strategist or upskilling your current team to take over these responsibilities.

3. Build Strong Systems

As you grow, consistency becomes crucial. Implement robust project management systems, define clear processes, and make them easily accessible to your team. Pay attention to capacity management – you can no longer commit to every project without considering your team's workload.

4. Focus on Growth

Your approach to growth needs to evolve. Gray suggests:

"Should you be hiring somebody on the sales front? I'd base most of that on what's your deal volume needed, which is a function of your deal size on average."

If you need a high volume of smaller deals, consider hiring a salesperson. For fewer, larger deals, focus on creating high-quality conversations with the right prospects yourself.

Actionable Steps to Take Now

1. Assess your current time allocation. Are you spending enough time on growth activities?
2. Identify potential leaders within your team who could take over delivery responsibilities.
3. Audit your current systems and processes. Are they scalable?
4. Calculate your needed deal volume based on your average deal size and growth goals.

Start documenting your strategic decision-making process to help train future leaders.

Remember, this transition period can be challenging. You're dealing with increased payroll, the need for more structured processes, and the pressure to maintain growth. However, it's also an exciting time filled with opportunities for personal and professional development.

Gray reminds us:

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