You’re committed to bumping up your agency’s revenue significantly in the coming year (anything 20%+ is solid, smaller agencies could aim higher).

How will you get there?

First, what’s the number? If you did $5 million this year and want to grow by 30%, then it’s $6.5 million in the new year. If it’s $10 million this year, then it’s $13 million in the new year.

Second, what’s your starting point? How many clients are continuing, increasing, or churning from the previous year?

Retaining 100% means you’re already starting with last year’s revenue (e.g. $5 million this year, $5 million to start in the new year).

Agencies with multi-year contracts or a strong recurring revenue model have this.

Many agencies come in below 100%, sometimes well below.

If you’re mainly project-based, this could be closer to 0%, which means you may have done $5 million this year and then have to start at $0 in the new year.

You could forecast some clients who are likely to work with you again in the new year, that might help the %.

Once you’ve got the difference between your new year's goal (the 30% increased figure) and where you’re starting, you’ve got your target for sales.

If you did $5 million this year with an expected retention of 75% from existing clients ($3.75 million), then you’re targeting $2.75 million in new business ($6.5 million, the 30% increased goal, minus $3.75 million).

How will you get to $2.75 million?

Start with average deal size. If it’s $100,000, that means 27.5 deals.

Maybe you get a bit more granular and decide it’s more like 5 larger engagements at $300k each and 17 engagements at $75k each.

So you need to win 5 $300k deals and 17 $75k deals.

Assuming a $300k deal is different than a $75k deal, how many qualified leads would you need for each?

Look at your historical data, figure out your win rate for these types of deals.

If it’s 33% for $300k deals, then you need 15 qualified leads.

If it’s 40% for $75k deals, then it’s 43 qualified leads.

So 15 qualified leads for $300k deals, 43 qualified leads for $75k deals.

How many total leads does it typically take to get to these qualified leads (MQLs vs. SQLs)?

You might have to dig a bit deeper into your data if you don’t already track this.

For simplicity’s sake, let’s say 1 in 2 leads becomes a qualified lead, a 50% hit rate.

So we’re now talking 30 leads for $300k deals, 86 leads for $75k deals. A total of 116 leads.

Where are your leads coming from?

How many leads are you already getting per week?

If your lead volume isn’t quite there, how will you get more?

Who is going to help you? Do you have a sales and marketing team that’s aligned with these numbers

And don’t forget, deals take time to close. How long does it take for a $300k deal to close? A $75k one

Chances are, they can take a while. Do you have enough convos going on in your pipeline right now to be on pace?

If not, what activities need to ramp up? Marketing? Cold outreach emails? Asking for referrals?

We used to wing it by assigning a random revenue growth number at the start of every year.

Sometimes we hit it and sometimes we didn’t.

But once we started to understand the importance of working backward to figure out what it’ll take to reach a goal, we became a lot less haphazard about the growth number, from eternal optimist to cautious realist.

Best wishes to all the agency operators working towards their goals in the new year. Let’s get it.

Check out our free Agency Revenue Bridge Tool, a simple spreadsheet to help you do the exercise above. Simply make a copy of the sheet and play around with your own numbers.