STANDSTILL agencies work on projects
STANDOUT agencies work on retainers
Over-reliance on project work and income is a classic symptom of a STANDSTILL agency. Most firms survive on projects in the early days. The challenge of producing a bespoke website or delivering a rebrand can be exciting and fulfilling. But reliance on project work is a major barrier to growth. Staying on the project rollercoaster is no way to scale an agency. It’s just too risky. What happens if the projects dry up? What happens if too many are required at the same time? Stress is what happens.
STANDOUT agencies usually have some project income, but it’s the exception rather than the rule. The bulk of their income is delivered through retainer work (or at least regular monthly client work).
If more than a 1/3rd of your annual income is project work then you have a problem. You don’t have enough stability, too much stress and are not benefitting from the lifetime value a hard-won client should bringing you.