Secrets of Specialisation is a new content series focusing on specific industries. Each week, we’ll interview an accountant working with clients across a specific sector to understand the challenges, opportunities and trends affecting those businesses.
For the first article in the series we speak to Paul Bulpitt, founder of the Wow Company, a firm with a specialism in digital agencies, which help brands create, plan, and coordinate advertising and other forms of promotion and marketing.
The Wow Company has, for the last eight years, conducted a national survey of independent agency owners in the UK. Last year’s survey drew responses from over 500 individuals.
For the very first Secrets of Specialisation, Paul Bulpitt, the firm’s founder, tells AccountingWEB about what the results show and where the agency world is headed.
AccountingWEB: What is the outlook for your agency clients and those that have responded to the survey?
The outlook is positive. However, there are signs of challenges on the horizon. Then again, anyone in business will probably say the same right now. Last year’s survey indicated that confidence is as high as ever. So the industry’s general outlook is reasonably buoyant.
AW: What about challenges? What are agencies struggling with?
New business, definitely. That crops up in our day-to-day interactions with clients and also in our research. But it’s interesting to see the different ways people are approaching that challenge.
It’s all in the execution. There’s no magic bullet. In the research, LinkedIn was ranked in the top 10 for finding new business -- and it was also ranked in the top 10 worst activities for new business.
So it’s all about execution. Clearly some people do it well and others don’t.
AW: What about trends. Where is the industry heading?
It’s funny that we’re talking about specialisms because, actually, what we’re seeing is agencies that have a clear service specialisation coupled with a clear industry specialisation are the ones doing really well.
The days of a full service agency, all things to all people, is over. A company like Kellogg’s, for instance, won’t go to one agency. They’ll go to maybe a dozen different ones -- the best SEO, the best influencer marketing, etcetera.
AW: Let’s talk KPIs. What do you measure and what is the workflow in terms of capturing that data.
Agency owners are always obsessed with ‘what KPIs should be on my dashboard’. The answer is actually it depends on what you want. This isn’t just about agencies, this is a deeper point about life perhaps.
So many people are building businesses because they think they have to build businesses. But they’re not linking it back to what they want personally. The long-winded answer is we always try to understand what’s right for the individual.
Some people want to make millions of pounds and be successful, so their KPIs will be heavily geared around new business. Others want to work four days a week and pick their kids up from school everyday. Their KPIs might be around profitability.
In terms of capturing this information or setting KPIs there are two channels. All the agencies we work with use cloud accounting software, so we can aggregate that data and that’s useful for payment terms, profitability and other benchmarking.
The other is just a chat. I need to see the whites of your eyes. There’s nothing -- no survey, no AI -- that can beat that human interaction.
I had an interesting conversation with a friend of mine who is a leading eye surgeon. He said, in terms of diagnosis, there’s AI that can diagnose much more effectively than humans because it has a record of millions of eyes and track something I might miss. But, he said, that AI can’t see how the person walks into the room, it can’t see how it affects their life.
That’s what I use at our team at WOW. Absolutely, let’s use the tech, but that human bit enhances the client’s experience.
AW: Finally, is there any work you’ve done with agency clients that you’re particularly proud of?
We’ve got a lot of growth stories. Clients that have grown and acquired a lot of businesses. In terms of what makes me proudest, it is where we’ve helped those who thought they needed to make layoffs but we helped them avoid it.
We’ve not done anything magic. We’ve just given them the reassurance needed to turn it around.
Nine out of 10 times it’s about cash flow. The initial process is: “is this business fundamentally screwed?” With an agency, it’s rare that it’s fundamentally screwed. You look at a business like HMV and you can see quite quickly that its model is flawed. Whereas with an agency, with the talent they’ve got and the ability they’ve got, you back them most of the time.
The cash flow is normally what puts people in that situation. Maybe they’ve been doing unprofitable work. But if we can solve the short-term cash crisis with short-term financing for example, we always ask what they are going to do differently to change the long-term forecast. That usually means good cash management, reducing payments, and outstanding invoices more effectively.
Does your firm have a specialism you’d like to show off to the world? The Accounting Excellence Awards are now open, featuring the Specialist Team of the Year award. You can find out more details and enter your firm here.
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.