Live Coaching: How To Grow An Agency to $2M

Here are the top 10 key takeaways from Nathan Barry's coaching session on scaling an agency to $2 million in annual revenue, with practical insights for service business owners looking to grow strategically rather than chaotically.

1. Find clarity on your ideal customer profile

The conversation emphasizes that scaling successfully requires getting clear on who you're serving. Jay Singh's agency currently serves both established founders and established creators, but this variety can lead to chaos when trying to scale. They discuss how focusing on a specific customer segment prevents the chaos of constantly jumping between different types of clients.

The ideal customers they identified were established creators who already have substantial revenue and audience but want to build products to scale their business further. These creators likely don't have the technical team to build software products themselves, creating a perfect opportunity for Jay's agency to fill this skill gap.

2. Avoid brute-forcing growth with more projects

Nathan warns against the common mistake of trying to scale from $500K to $2M by simply doubling the number of projects. This approach often leads to chaos, especially when projects are scattered across different customer types with little automation or systematization.

Companies that take this approach typically end up expanding their team to handle the increased workload, which becomes expensive. The result can be a business that has doubled its revenue but maintains the same profit margins—more work for the same take-home pay. This emphasizes the importance of strategic growth rather than just increasing volume.

3. Maintain profit margins while scaling

Many agencies double their revenue but see their profit margins shrink from 40-50% down to 10-20%, meaning they're working twice as hard for the same profit. Nathan and Jay discuss how keeping the team small (under 10 people) helps maintain higher margins.

Jay stated his goal of maintaining 50% profit margins even at $2 million in revenue. This aligns with his lifestyle goals of potentially being able to retire his parents and provide well for his family. The conversation emphasizes that revenue can be a vanity metric if not accompanied by proportional profit growth.

4. Focus on predictable revenue

One of Jay's key challenges is revenue instability—fluctuating between $20-30K in monthly revenue to $50-80K. This unpredictability makes business planning difficult. They discuss two main approaches to creating more predictable revenue: longer contracts and repeat business.

Currently, most of Jay's contracts are relatively short (3-4 months). By targeting the right customers who have ongoing needs, he can potentially extend these relationships. The right clients would see Casper Studios as filling a crucial skill gap they couldn't easily replace, leading to longer-term partnerships rather than one-off projects.

5. Match your service offering to client needs

Jay identified that established creators have a unique need his agency can fill: they want to build software products but lack the technical expertise to do so themselves. Unlike larger companies that might take the work in-house after initial development, these creators would likely need ongoing support.

This creates an opportunity for longer-term relationships where Casper Studios could charge $50K for initial product development followed by $10K monthly for maintenance and improvements. This model works particularly well for creators whose products generate meaningful revenue (e.g., $30-100K monthly), making the ongoing service cost reasonable in comparison.

6. Position yourself through content marketing

Nathan suggests creating content that positions Jay as the expert on helping creators build products. Specific content ideas include showcasing profiles of creators who have successfully launched products, analyzing why some creator products fail while others succeed, and exploring success rates across different niches.

This content strategy would create a "minimum viable brand" that immediately positions Jay as the go-to expert when someone is looking for help building a product for their audience. By focusing content specifically on this niche, he can attract exactly the type of clients he wants to work with.

7. Create a flywheel effect with founders and creators

The conversation explores an interesting potential flywheel where Casper Studios could work with both established founders and creators. After building products for founders, these clients often need help with distribution and might want to partner with creators.

This creates a natural ecosystem where Jay could connect founders with creators in his network, benefiting both parties while strengthening his own relationships and reputation. This flywheel of "build for founders → connect with creators for distribution → scale revenue and relationships" could become a powerful growth mechanism.

8. Target clients with the right skill gaps

The most promising clients are those who genuinely need Jay's expertise and can't easily replace it. Early-stage founders might be demanding and pay less, while enterprise clients might just take the work in-house after the initial development.

Established creators represent a sweet spot—they have the budget to pay well but typically don't have in-house technical teams to build and maintain software products. This creates the potential for longer-term partnerships where both sides receive ongoing value, leading to more predictable revenue and stronger client relationships.

9. Balance fun projects with profitability

Jay mentions that while early-stage founders can be fun to work with because of their energy and vision, they're often the most demanding clients who pay the least. The middle ground he identified was established founders who bring that same energy but have the budget and revenue to support longer contracts.

This highlights the importance of finding clients who provide both enjoyment and appropriate compensation. The ideal client combines the excitement of building something new with the stability of adequate funding, creating both a better work experience and a more sustainable business model.

10. Calculate your target client numbers

Nathan and Jay perform a simple calculation to determine how many clients would be needed to reach the $2 million revenue goal. With projects averaging $50-80K initially and potentially $10K monthly for maintenance, they determine that 10-15 ongoing clients would be sufficient.

This calculation reveals that the target market doesn't need to be enormous to support Jay's business goals. With 16 clients on maintenance contracts or 10 maintenance clients plus one new build each month, the business could reach its revenue targets. This makes the focus on established creators seem like a viable strategy rather than too narrow a niche.