The Twenty Percent Rule 🏛️

Seniority is Expensive  

One of the hard lessons I learned in growing my digital marketing agency was that the more senior your team, the less profitable you will be as you grow.

You see, the downside of growing revenue by signing new clients is that you need to deliver these services to get paid. 

The easiest way to deliver work on a deadline is to do it yourself or hire a senior team member to do the work. Their experience will ensure that your deliverables are of the highest quality. 

But this also presents a challenge, since senior staff is expensive to hire, maintain, and keep happy. 

If you’re not careful, you will find that you’re paying 75% of your revenue to contractors, employees, and managers. After paying for your other expenses, there’s no profit leftover.

This can work temporarily but isn’t sustainable for the long haul. Your company won’t be sellable, and you’ll be stressed out forever.

So instead of going senior, I’ve learned to target the minimum viable resource instead.

What is the least senior team member that can be hired to do this work without sacrificing quality? What resources, training, and systems do they need to be successful?

Then, instead of hiring a senior person every time you grow, you surround your team with systems that support them in their roles. You hire architects to ensure your work is done to a high standard, and you keep strategists around to review the final deliverable.

With this structure in place, you can commit 25% of your revenue to getting the work done, while much of the rest goes to the bottom line.

So instead of solving problems with seniority, consider creating a system that lets the minimum viable resource pick up the slack and generate the profits. 

The best part is you can continue to hire senior team members, but only when they fit into your long-term plans, not as a short-term stopgap. 

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