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“If you’re not growing, you’re dying.”
That's a great motto to have for a SaaS company, but if you're using it as a guiding principle on how to run your small agency business year over year, you probably aren't optimizing for the right thing.
That idea didn’t come from agency life. It came from private equity, venture-backed SaaS, and Silicon Valley startup culture, where growth at all costs is often the point. But for founder-led service businesses, the idea that growth for its own sake is the goal can cause some big issues.
Chasing top-line revenue without building real profit underneath it doesn’t make your agency healthier. It just makes it bigger and, often, harder to live with.
Hitting a bigger revenue number feels good. It looks good on paper. It gives you something secy to talk about at industry events.
But revenue only matters if it’s producing profit that actually improves your business and your life.
Doubling your agency from $3M to $6M doesn’t mean much if your stress as an owner scales with the growth. That is just a more expensive hamster wheel.
On the flip side, staying a $3M agency with strong margins, a stable team, and a business that supports the life you want is not a failure. It’s often a smarter, more intentional outcome.
One of the most common mistakes agencies make is accepting low-margin work just to push revenue higher, especially if the work is being offered with a prestigious or target brand. It feels good to say yes to a client like that and you think to yourself:
“We’ll take this now to hit the number and we’ll increase prices later and use our relationship with this impressive client to win better work.”
Unless you have a very clear and documented way way of moving an initial loss-leader project to a higher margin service, later rarely comes.
Low-margin work adds complexity, pressure, and delivery risk. It forces you to stay deeply involved. It makes hiring harder, retention shakier, and planning almost impossible.
If the work you’re doing doesn’t make the business easier to run, then it's not scaling.
Why did you start your business? Did you say to yourself, "I need to own a $10M business in 5 years?"
Probably not. Very few agency owners actually started their business because they wanted to hit a specific revenue milestone. What you wanted was freedom, flexibility, control, better compensation for your efforts and to create something you are proud of.
Revenue is just a number. Profit is what buys those things. Profit buys you:
Appropriate levels of staffing so you’re not leading every function
Real processes and systems to keep the business running instead of holding everything together with duct tape
Consistent delivery staff who are well-paid and able to further develop your offerings
What constitutes your agency margin goal can vary depending on your service model, but generally you are looking for at least a 50% gross margin on your services and at least an 18-20% net profit margin (though net profit may be lower if you are intentionally investing in growth).
If an eventual exit is part of your thinking, this matters even more.
M&A buyers don’t prioritize top-line revenue the way founders often do. They care about EBITDA. They care about margin. They care about predictability and durability.
A smaller agency with strong, consistent profit is often more attractive than a much larger agency scraping by on single-digit net margins.
The same rule applies whether you’re selling the business or just trying to enjoy running it.
Your plans should always align with what you want your business AND your life to look like.
Staying at a lower revenue number with a higher net profit margin often feels better, not worse. You’re compensated appropriately. You can reinvest intelligently. You’re building on a model that actually works.
And when you do decide to grow? You’re scaling something that isn't fragile. You're scaling something you know will work.
The best agencies to own don't chase growth blindly. They are intentional about what kind of business they are building and what kind of life it was meant to support.
That often means staying smaller longer, saying no to work that looked good on paper but felt wrong in practice, focusing on margins, delivery, and team health before worrying about the next revenue milestone.
When growth does come, it is not fragile. It is not dependent on the founder holding everything together. It is built on profit, clarity, and a model that actually worked.
Revenue is easy to chase. Profit takes discipline.
But profit is what buys you breathing room. It gives you options. It lets you hire ahead instead of in panic, step out of delivery without guilt, and build something that doesn’t require constant sacrifice to sustain.
So if you’re thinking about what’s next for your agency, start here:
Don’t ask, “How do I grow faster?”
Ask, “What kind of business do I actually want to be running?”
Build that first at your current revenue number. Then worry about growth.
If you’re curious where profit is leaking — or what it would take to make your agency easier to run — let's chat.