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AgencyHabits

The number that funds everything else

Published 3 days agoย โ€ขย 1 min read

In this week's AgencyHabits Podcast, Peter and Sei-Wook do a deep dive on agency profit - specifically, why so many founders misunderstand what healthy numbers actually look like.

The core insight: gross margin is the starting point for everything. It's not just a metric, it's the funding source for the rest of your business.

Without strong gross margin, you don't have the dollars to invest in growth, build systems, or weather volatility.

They break down:

  • Gross margin vs. EBITDA
  • The levers for high margins
  • Where to allocate your gross profit
  • Why high EBITDA can be a red flag
  • The "we reinvested in growth" myth

The target profile they share: 50%+ gross margin, 15-20% on sales and marketing, 5-10% on G&A, landing at 20-30% EBITDA. That's a healthy, growing agency.

If you want to go deeper on specialization (which drives pricing power), check out Episode 4.โ€‹

Or, join us for our next FREE AgencyHabits Knowledge Share happening tomorrow at 12:30 PM ET. We'll be tackling a topic that directly impacts your gross margin: Your Ideal Client Profile.

โ€‹See you tomorrow.โ€‹

Who are we?

Hi, we're Peter and Sei-Wook, co-founders of Barrel Holdings, a portfolio of agency businesses. We also run AgencyHabits, a resource for agency operators featuring lessons learned from our various agency businesses.

Thanks for being a subscriber. If you or anyone you know is interested in selling their agency business, please check out what types of agencies we're looking for and email hi@barrel-holdings.com.

Also: Peter posts a lot of agency content on LinkedIn, give him a follow!

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AgencyHabits

Go behind the scenes of real agency businesses.

AgencyHabits provides learnings, ideas, and templates for agency operators drawn from Barrel Holdings companies. Barrel Holdings incubates, acquires, and grows agency businesses.

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