The Uncomfortable Move That Can Double Agency Profit

Yesterday, I met with a $7.2M/year agency owner.

Great operator. Smart. Deep expertise. Fifteen years in a very specific, very price-sensitive niche.

The problem wasn’t revenue, it was margins.

They were adding seven figures in ARR every year, and churning a large chunk of it right back out. On paper, it looked healthy. But emotionally? It was exhausting. Growing slowly for years while carrying unnecessary weight can feel agonizing for a high performer.

When I meet agencies north of $3M, my usual advice is pretty straightforward:

• Build efficiency with custom AI workflows

• Unlock new delivery capacity

• Sell new clients into that capacity

• No new hires

• Every new client drops straight to profit

In many cases, that alone can add $1M+ in EBITDA within 12 months. But with this agency, that playbook wasn’t the move.

Scaling revenue without fixing your finances is how founders end up with IRS notices, cash-flow surprises, and fake profit.

8 Figure Finance helps 7-figure operators clean up their books, optimize taxes, and install financial systems that actually scale.

If you want growth that sticks (not growth that explodes) start here.

Book a call with 8 Figure Finance →

The Different Model High-Revenue Agencies Miss

For agencies in the 30-50+ FTE range, the biggest profit hack isn’t always growth.

It’s precision.

Here’s the framework I walked him through:

1. Efficiency

2. Capacity

3. Profit

And the uncomfortable part most founders avoid…

The Bottom 10% Problem

Before I go further, I want to state: this take isn’t for everyone.

But it is standard practice in large organizations.

Every year, companies like Amazon performance-manage out their bottom 10%. That doesn’t mean they’re evil; it means they understand the law of large numbers. At scale, your lowest performers disproportionately slow the organization down.

In a 40-person agency, the bottom 10% might only be 3-4 people.

But the concept still holds.

Using custom AI development, a founder can objectively analyze workload, delivery quality, response times, and output across the team. Over 3-6 months, you build efficiencies that allow your A-players to manage more clients and revenue with less friction.

Instead of selling new clients into capacity, you let the bottom 10% go–and absorb those accounts with stronger strategists and managers.

No chaos. No quality drop. Just leverage.

If you want to see what this looks like inside your own agency, we map this out step-by-step on a private strategy call. Book a call here →

Why This Changes the Math Fast

A move like this can add up to 2.5%-5% in net profit.

For a $7.2M agency, that’s an extra $180K–$360K in annual profit without adding a single new client.

That cash does one of two things:

• Pushes the business into a higher valuation tier (crossing $1M in annual profit changes everything)

• Or gives the founder real capital to reinvest into growth, acquisitions, or leverage plays

Either way, it’s a different game.

Three Things You Can Do Today to Implement This Strategy

1. Define objective performance metrics. Stop relying on gut feel. Decide what “great” actually looks like in delivery, response time, and client outcomes.
   

2. Audit delivery with custom AI workflows. Use internal AI systems to analyze workload distribution, efficiency gaps, and where top performers are carrying excess weight.
   

3. Model the profit impact before acting. Run the numbers. Even a 2.5% net margin increase may be worth more than six months of new sales.

This isn’t the most popular strategy. But for larger agencies, it’s often the fastest path to real profit.

If you’re wondering whether this applies to your business, that’s exactly what we figure out together. Book a strategy call here →

Want to scale your agency from 7 figures to 8, without adding more people, chaos, or complexity? We design custom AI-powered operating systems that replace fragile human workflows with scalable, tech-enabled systems your agency actually owns. The business keeps running, even when you’re not. Book a demo here!

Want us to run a diagnostics on which of the following systems you need the most help with and put together an easy-to-implement action plan to improve them? So you can finally escape agency prison and build your dream agency? Book a demo here!

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