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Health check: We’re doing ok, our client base is solid

Doing ok? Client base solid? This scenario-specific advice looks at some key areas of the business to monitor and manage. 

Your client base may be solid, but you want to make sure a few inefficiencies don’t leave your business exposed.

Over reliance on one or few clients and/or industries could leave you at risk of being impacted by volatility in the market. As a business you should be actively seeking to spread the risk and ensure a constant flow of work that is mitigated against instability.

Having a clear understanding of your client’s needs will stand you in good stead and help embed your agency within their business. It will avoid the risk of enabling relationships to be formed with individuals, rather than what your agency stands for as a whole. If a team member leaves, is the client at risk of disappearing with them? 

Your leadership team should have a good understanding of your client portfolio, including their profitability score and pipeline forecast. This will enable senior management to strategise to ensure all potential revenue streams are being maximised with existing clients, and to have an active client success strategy in place. Ask yourselves, do the relationships run deep enough within client organisations that you are able to identify other opportunities beyond existing briefs?

Are you charging clients appropriately and not heavily discounting to keep a client on board? What is the opportunity cost of doing this? Could existing resources be working on other projects or new business opportunities instead? Charge out rates should be reviewed periodically to be in line with competitors and to ensure the best margins can be achieved.  

Do you have a commercially focused team who anticipate cashflow need and ensure appropriate agreements are in place with clients? For instance, when third-party heavy projects are on the horizon or if freelance resource is needed?

Remember, recruiting is costly, both in time and financial resources. Do you have the right people plan in place to retain your talent? Are you regularly benchmarking remuneration packages to ensure you retain and attract the best talent? 

Make sure you have strong development plans in place for key roles, with a clear path for progression within the business in line with agency growth. 

And set targets, measure and prioritise the management of your new business pipeline to ensure new clients are actively being sought after. Don’t get complacent and find yourself caught out. 

You may also be interested in this article: The Balancing Act. 

About: Sim Thirunesan

Sim is Finance and Business Director at Management for Design Ltd. She provides dynamic financial insight and strategic business management support to creative professionals, allowing them to focus on excelling at what they do best. By providing clear insight, she can help you make the best decisions for your business and enable you to plan effectively, freeing up your time to focus on unlocking your maximum potential and produce the best work for your clients.

Sim is an accredited member of the DBA’s Register of Experts. 

Find out more about Sim.

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