In this blog, I am going to talk about the Assets Over Agency concept in detail. I will walk you through the seven major asset opportunities that I have encountered over the last five to 10 years of being in the business.
If you are currently in the agency business and providing marketing services to small businesses, this is going to be a very valuable concept. It’s an opportunity for you to make your business more profitable and scalable—and will also make your life easier and more enjoyable.
I know these things because I have been selling to small businesses throughout my entire career. For almost 20 years now, I have been an entrepreneur. I have been doing cold calls, knocking on doors to selling to small businesses through Facebook ad campaigns and emails, webinars, and everything in between.
This means I have personal experience with each of the agency, marketing, and software services you’ll learn about in this post.
What I am going to share is not just something that came to me overnight. This has shaped my entire career.
If you are selling to small businesses and not doing it according to the Assets Over Agency concept, you are going to be caught in the ‘Cycle of Doom’.
Escaping The Cycle of Doom
The Cycle of Doom is where you put all your effort into selling to small businesses, but they can’t afford to pay you a lot of money.
They just simply can’t. The economics are not there. They’re small businesses, but they’re still very demanding, need lots of attention, and want to be guided like a child. If you let them, eventually, they are going to demand custom services.
Small businesses will demand your attention which will absolutely break your business. The truth is you will not find an agency offering custom professional services that has built a good business selling to smaller companies.
I knew this because I have studied the market inside and out. I have proven that every single business that has successfully sold to the SMB marketplace is doing this according to the Assets Over Agency concept.
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Unveiling the ‘Agency’ Factor: How Assets Shine Brighter
When people hear the word agency, they think that all it does is some sort of customer service for their clients. Well, that works with Fortune 1000 companies because they have massive budgets that they are willing to spend on marketing, enabling them to build a profitable business.
Looking at the agency world, there are many solid, profitable firms. Think of the 20- to 30-man agency working for small businesses in the marketplace. There is nothing wrong with that. BUT… I have been there, and I’m sure the owners of those businesses do not have the life you think they have just because they have the manpower.
You may see that as a sign of success, but that person is scraping and clawing to make payroll every month. It’s a real challenge to get ahead, stay ahead, and build some sort of asset that is valuable. I know because I’ve been there, and I’ve also been on the other side of it.
These thoughts always remind me of a quote from Warren Buffett:
“…when a business with a bad reputation comes into contact with a management team with a good reputation, it’s usually the business that leaves with its reputation intact.”
Warren Buffett is such an amazingly brilliant man and has a way of saying things simply and powerfully. He is saying that bad business and bad business models almost always win over good management teams and smart people with lots of experience.
When your business has a bad model, it’s almost sure to lose no matter how smart you are or how much you hustle.
We Don’t Get Extra Credit for Working Hard
One of the reasons why Warren Buffet is so brilliant is that he thoughtfully makes decisions about the types of businesses that he puts his money into. He considers structure, economic advantage, and competitive advantage.
It makes it very likely that even if the management team isn’t the most brilliant and doesn’t execute perfectly, his money is still going to get more valuable in this business.
As entrepreneurs, that’s what we should all be looking for. We don’t get any extra credit for taking care of clients or working hard. Aside from not getting paid really well, doing client service is just plain hard work, stress, and jumping through hoops to make them happy without any upside.
Why Assets Over Agency is the Best Model
Assets Over Agency is all about finding structures. It’s a model that gives you the ability to scale and be more profitable while requiring less time investment. Ultimately, it will give you a more valuable asset that you can eventually sell because you are developing a business that is attractive to other people.
Building a business that is all about custom service makes you look bad to buyers. It shows them how much work, effort, and time need to be invested. It doesn’t matter if it can generate a profit of $5,000,000 a year if there is too much work involved that it is almost not worth the pain.
A business should be process-driven; there should be a broad customer base so that even if a customer leaves, it will not hurt the business as a whole. That is the kind of business clients will surely buy, the kind that has a high-security investment.
7 Assets Over Agency Models
1. Productized Services
Productized services are services that can be packaged discretely with discrete price points and a clear list of what’s included and what’s not included.
This minimizes the possibility of clients demanding a customized service. Anything outside the service package requires additional payments. This also makes the relationship and expectations between you and your client fair right from the start.
In reality, no business can perform every single function and service. You have to have a specific area of expertise or field that you can offer to the client. It may look good when you tell your client that you can do everything, but in reality, it makes you look a total amateur.
An example of this is my own experience back at my IT services company. In the industry, it was an hourly service business where if something breaks, you go and fix it and then charge $125 an hour.
It was horrible. Horrible for both the clients and the service provider. The service provider can’t scale their business, and the clients are scared to get help for their own business because they know that their bill is going to start running the moment they begin.
How did I escape?
I created very discrete packages at set price points and said:
“Hey, we will proactively support your computers for this. We’ll make sure your data and network are backed up for this. Put them all together, and here’s your monthly fee. It is a set monthly fee: you can call me as much as you want, and we’re never going to charge you more.”
That totally changed the dynamics of the relationship with the client. I had a recurring revenue, and everyone was clear on what is and is not included. If it went outside that, then I charge them. And they knew that if they demanded more, they were going to pay extra.
I had a totally different relationship with my clients, and I was able to scale that business into multiple millions of dollars and sell it for multiple millions of dollars because of the model that we had created.
Click here to read a more detailed post about how to create productized services.
2. Media Assets
Businesses are spending a huge proportion of their budget on buying ads on Facebook, newspapers, magazines, radio, television, or any medium that can be used to launch an advertisement.
When it comes to media assets, advertisements consume a lot of the budget—more so than the agency itself. One, because with ads you can actually observe your market when your ad is running. The second reason is that advertisement helps you get right in front of your audience.
As a service provider, it’s easier to sell advertising on my own media property than to try and sell some sort of custom service. Clients see my media property, and they can understand who my audience is because they see the type of content I produce. There are advertising opportunities, and there is a cost for that.
Building your own media means building an asset. Just like what I am doing right now.
Clients can see the impact of my reach because they see me producing media every day and sharing the content with the market every day. There are businesses coming to me and saying, “Hey, I saw your article on X, Y, and Z. How much would it cost me to advertise in that or to have coverage of my business like that?”
I am still going out and offering marketing services to those clients. The only difference between an agency offering marketing services and me is that mine is based on an asset.
My assets produce tangible results, and their value is increasing every day as I engage more advertisers and more readers or viewers of my content.
3. Lead Generation Sites
Lead generation, simply put, is generating more customers through qualified leads. And this is something that businesses really want: lots of customers!
Instead of just managing Facebook ad campaigns and their accounts, you build your own assets by building your own lead generation sites and selling those leads to businesses.
Now, you have something incredibly easy to control and manage. If the customer stops paying, you can just cut off the lead supply and transfer the leads to another business that is willing to pay you. No need to start from scratch with a new client.
4. Direct Mail Campaigns
When talking about direct mail campaigns, I am referring to Valpak, the coupon mailers. Valpak has been around forever, just mailing out a simple envelope of coupons to businesses.
So, instead of doing custom mailers for a particular client, you build your own brand of mailers and sell spots from those mailers. Through this, you have built an asset with your own customer base.
You’ve built an asset with your own brand that people now expect to see your coupons. Your mailers are now direct mail that will always come in their mailbox.
5. Sales Funnel
This one is absolutely taking off. It’s what people see when agencies are doing really well.
I have several friends in the agency industry who are killing it right now, and they don’t do custom agency service. What they do is design a sales funnel that works really well for each client who signs up with them for a set monthly fee.
They are essentially taking the sales funnel and selling the process to businesses. It’s the same sales process; they just do minor customizations with the brand and logo. They own the process—they just take it and sit down with clients, then let it run.
This is a way more attractive model than trying to create a custom sales process for each client. It may be difficult for those with clients across multiple industries, but if you focus on a vertical industry, then this WILL work and kill the game.
You are going to design and optimize a single sales process that you will constantly test and tweak for each of your clients to make sure that everybody has the best, updated sales system.
One good example I have seen is the law office of James Sokolov.
He was a lawyer who realized that his marketing system to get legal clients was absolutely crushing the competition. So what he did is he went around the United States, found lawyers, and said, “Hey look, you pay me X, and I will just deliver clients to you. Because of my marketing system, you will become a dominant lawyer in the market.”
And he has done very well with that model—last time I checked, it was worth $100 million dollars already.
6. Software-Based Services
This is probably the most successful model in selling to small businesses. One of the greatest examples is Microsoft.
They built a huge client base of small businesses selling them reasonably priced software. Their Quickbooks is a good example of software they developed for accounting purposes that they are selling to small businesses.
That is a software business itself. Software as a product. There are also software-based services like what payroll processing firms are doing. Payroll used to be done by bookkeepers manually; now it is automated thanks to payroll processing firms. They provided software that can process their monthly salary in exchange for a monthly fee.
There are many examples of a software-based service, but in a sense, if you are a small business like a salon or a chiropractor, something as simple as an automated reminder system in the form of a text messaging-based platform can help you gain a 30% improvement in your appointments.
Software-based services is a very attractive business model guaranteed to secure clients and give you a solid, strong asset.
7. Your Business Itself
This is the most important concept to understand as an entrepreneur.
From day one of your business, you should already think about how you will build your business to maximize the asset value.
Because no matter how much income you make, over the years, the most valuable thing that should happen is to be able to sell your business for a good chunk of money. If you don’t focus on that from day one, you are going to have a hard time selling your business, and the valuation will be much, much lower.
A perfect example was my IT services business. I built that business around process, structure, recurring revenue points, and set price points from day one. Because of that, I was able to get a couple of times the revenue when I sold it versus the industry average of selling your business for a quarter or a third of your revenue.
So if you’re doing a million dollars in sales, you might get $250,000 as a purchase price. Whereas if I was doing a million dollars in sales, I was getting two or three times my sale price.
How did I do this?
Because of the way I structured the business.
Just like building a house, you might ask yourself: How can I make my house more attractive? So that when you want to get out and move to another house, all the brokers and buyers will be excited to buy it.
Again, I think the most important concept for small entrepreneurs to understand is that you must treat your business like your most valuable asset.
Every day, think about how you are designing your model to make it very attractive to buyers. So you can exit in a big way that will make all of the hard work worth it. Because, honestly, you can have a nice salary, benefits, and all that stability, but you are not going to get the exit to a next-level lifestyle.
As an entrepreneur, you have taken a lot of risks, and you can make sure that all those risks are worthwhile.
The entrepreneurs who are rich—the guys who have sold their businesses and made a LOT of money—got there because of the assets of their business, not the profit.
Assets Over Agency is the Way Forward
The Assets Over Agency model offers the opportunity of a lifestyle that frees you from chasing down every client and scrambling to meet their customized demands every hour.
If you want a more profitable, more scalable, and easier-to-run business, this is the way!
All the best,
PS – I made six shifts in my approach to building my business that allowed me to grow quickly and stop trading my time for money. You can learn them here. 👈🏻
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