Crossing the £1 million revenue mark in your creative or marketing agency is a huge achievement. But scaling beyond £1m? It’s a different game entirely.
At a recent networking event we got into quite an involved debate around growth. Many of the agency delegates were working hard, seeing progress and sustainable growth, but yet at the same time realising what had got them to this point in the early years was not going to push them further.
We know this because at CFO for Growth, we work with dozens of agency owners across the UK who’ve reached this point and now want more control, more visibility and more breathing space. It’s not just about growing past £1m turnover, it’s about growing profitably. We see many agencies hit this milestone, but staying profitable (and improving those margins) while continuing to grow? That’s where things fall apart.
In our latest blog we wanted to share some proven strategies on how to scale confidently and build an agency that generates real profit. This next stage of growth demands:
- Serious financial clarity.
- More sophisticated processes across finance and operations.
- Delegation of delivery and account ownership.
- Transparency across your teams about how the agency is performing.
- A founder who is selective about how they spend their time.
Why is scaling beyond £1m so hard?
Only around 4% of UK businesses scale past the £1m in turnover mark. And for agencies, the jump from £1m to £2m is notoriously challenging. It’s not just about doing more of the same, it’s about doing things differently. We’ve seen agencies hit the wall at this stage for a few key reasons:
- Profit margins shrink, even as revenue grows.
- Founders become bottlenecks, making every decision.
- Processes stay scrappy, and it starts to show.
- Client growth is unstructured, with no clear sales system.
- The team lacks clarity on targets, performance and capacity.
This isn’t just theory, these are patterns we see every week across the agencies we support.
Strategies to help you scale beyond the £1m turnover.
Below we share some proven strategies that we have seen work for many of our clients.
1. Build a financial system you can trust
At this stage, you need to move beyond just reconciling bank statements and paying taxes, you will ned to:
- Create monthly management reports, not annual.
- Define the budget vs actual tracking for income and spending.
- Implement a regular forecasting process.
- Implement gross profit reporting by project and client.
- Gain clarity on your utilisation data for each team member.
This isn’t just for your benefit, your team also needs to see this clarity so they can help you work towards achieving these goals. Account Directors or Client Leads can’t make smart decisions if they don’t know whether a project is profitable. You need to approach your finances like a CFO, even if you don’t have one yet.
2. Project management must be tight
Beyond a £1m turnover, things start slipping if your project tracking and cost control isn’t solid, so you will need to gain greater clarity on:
- Time tracking for each team member, we like tools like Scoro, Accelo or Float.
- Weekly reviews of budget vs actual time/ costs per job.
- Scope creep logged and charged as needed.
- Product Managers trained in financial awareness, not just timelines.
Every hour over budget eats into your margin. Empower your team to catch this early, don’t wait until project wrap-up to see if you made a profit.
3. Master cash flow and working capital
At the £1m+ stage, managing cash flow isn’t just about chasing invoices or watching the bank balance. You will need a structured approach to working capital management and a whole new level of cash planning. When we first start working with a new client, here is how we help agencies build real cash flow confidence:
Review and understand the business cycle: There are a couple of things we might look at here that include the:
- Sales cycle, from lead to signed contract. How long does this take?
- Production cycle: how long does delivery take? Delays or long lead times can kill cash flow, keep on top of billing to stay ahead.
- Billing cycle: How quickly do you invoice and how quickly are you paid? This is where most cash flow stalls, so we need to keep on top of this.
Actively manage the working capital: We help agencies implement a full working capital framework that includes: setting clear invoicing triggers, tightening payment terms, running monthly cash flow forecasts, tracking projects, planning for VAT/ tax and creating buffer reserves. This turns cash flow into a proactive tool, not a stress factor. Your growth depends on having the working capital to hire, invest and absorb the unexpected, not just surviving month to month.
Regularly monitor these key cash KPIs: Some of the key KPIs to keep an eye on are:
- Cash runway eg: how many months can you cover operating costs with existing cash reserves.
- Cash burn, are you spending more than you are making?
- Cash cove ratio, ideally you want 2-3 months’ worth of cash to cover all outgoings.
Put a cash forecast in place. We do this by using a rolling 13-weeks forecast, factoring in pipeline probabilities, seasonal trends and tax payments. We also run “what if” scenarios to help manage budgets for example: what happens if a client pays late? Your delay hiring a new recruit or VAT increases?
There’s only one way to manage a cash crunch and that is planning to prevent it in the first place. This structured approach is what we work with our clients to achieve, because cash stress doesn’t just disappear with higher revenue. If anything, growth makes it more critical to plan well in advance.
4. Align operations and capacity with growth plans
Sales shouldn’t happen in a vacuum. If your business development team wins a big project without ops input, you’ll overload your team or miss delivery targets. This is where capacity planning comes in:
- Track utilisation rates (ideal: 65–75% for delivery staff). According to The Wow Company Bench-press report, the industry average agency is around 65%.
- Forecast delivery capacity vs upcoming demand.
- Align hiring decisions to pipeline (eg: if we win X, we need Y resource by Z date).
By holding cross-functional meetings where ops, finance and business development review the pipeline together, will enable you to plan effectively.
5. Build a predictable sales engine
As you start to scale the business and move towards the £1m revenue mark you need to change the way you find new business. You cannot rely on referrals anymore. To support hiring, planning and budgeting, you need a sales pipeline that’s: measurable, consistent and weighted by probability.
To give you a guide, a healthy agency should aim for 2.5x–3x your revenue target in unweighted pipelineeg: confirmed (90%+ confidence), verbal (75–85%), probable (50–70%) and early stage (10–40%). Track how many opportunities sit in each stage. It’s not about counting every opportunity, it’s about confidence. Unfortunately, we see agencies being overly optimistic in their forecasting approach all too often. When we help our clients introduce more formal forecasting and weighted pipeline process, they have a much more realistic outlook on their business, what the gap is between forecast and the goal for the year.
6. Delegate and build team ownership
This can often be a tricky one for agency owners to overcome. The founder shouldn’t be across everything, otherwise when you scale beyond £1m revenue this will create a bottleneck. If everything continues to run through the owner, the agency cannot grow, the founder’s role should evolve from delivery to direction. Here’s what we recommend:
- Promote team leads to own delivery and client relationships.
- Train them on margin and profitability, not just client satisfaction.
- Create clear KPIs for departments eg: client profitability, delivery & retention.
We often ask clients: “If you were an investor in this business, would you be happy with how the CEO spends their time?”
7. Review your offering and pricing regularly
As you scale, your services need to be both relevant and profitable. Too often, agencies keep legacy services or outdated pricing models that quietly drain margins. We recommend reviewing your rate card at least annually or more often if your costs have changed and compare actual project margins against your targets.
If you offer your team pay increases in this financial year, together with additional Employer’s NI costs imposed by the government in last October’s budget, this has increased your payroll costs significantly. We have created a handy tool to help quantify this, click HERE if you would like to understand more.
According to BenchPress, agencies that review pricing and profitability regularly are significantly more likely to achieve 20%+ operating profit. Start by identifying your most and least profitable services and clients, then update your pricing and packaging accordingly. Don’t be afraid to simplify or drop unprofitable offerings. Regular price reviews, clear minimum project fees and enforcing scope limits are essential to protect margins while you grow.
Final Thoughts: Scaling Smarter, Not Just Bigger
Scaling an agency beyond £1m revenue doesn’t mean doubling the hustle. It means building a business that runs with confidence, clarity and control. The most successful agencies we support don’t just grow revenue, they grow their margins, systems and leadership strength. They make better decisions because they have better data and they free up the founder to focus on direction, not delivery.
Here’s the truth: your next stage of growth is less about effort and more about structure. So if you’re serious about growing with less chaos, get in touch with us to see how we can help you put this new structure in place. We’re the finance partner for marketing and creative agencies, and we’d love to help you build your next chapter.
Book a discovery call to explore how our outsourced finance team works with agencies just like yours to help them scale beyond £1 million revenue.
