Should your small agency be subcontracting for larger agencies?
In this episode, Chip and Gini dive into the topic of agencies doing subcontracted work for other agencies. Both share their personal experiences of starting and growing their businesses through such work. They discuss the advantages, such as faster decision-making processes and the opportunity to work with big clients without direct procurement hassles. However, they also highlight significant risks like delayed payments, the potential for relationship conflicts, and the importance of clear contractual agreements. The hosts stress the need for transparency, proper onboarding processes, and clear communication channels to mitigate these challenges. Key takeaways Chip Griffin: “It can be a good way to get started and to continue to grow, but you do have to think about it because the things that make it easy to get in are also some of the things that can also create some pitfalls for you.” Gini Dietrich: “It used to be that you would hire a contractor and white label them and have them work under your umbrella. Clients don’t care anymore, they just want the work done and they want to know that it’s being done well.” Chip Griffin: “Treat a larger agency with the same scrutiny that you would with any other client. Make sure that it’s a good fit and that you understand what the terms are and that you don’t do work before there’s an agreement signed.” Gini Dietrich: “There are some things you can negotiate, especially at the beginning of the relationship when you have leverage.” Related Payment terms for agency subcontractors View Transcript The following is a computer-generated transcript. Please listen to the audio to confirm accuracy. Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin. Gini Dietrich: And I’m Gini Dietrich. Chip Griffin: And Gini, we’re recording this just after the start of the new year, and I just, I don’t have a cutesy, fun, entertaining, awful, whatever you want to call it, opening, no, no. So we’re just going to, we’re just going to dive right into the topic, which is the idea of agencies doing work for other agencies. And this is something that, that I know you’ve done, I’ve done it as well. And a lot of agencies, particularly as they’re getting started as they’re growing, end up doing subcontracted work for larger agencies or sometimes even similarly sized agencies that just, you know, need some excess capacity or the skills that you have to offer. And I think there are, there are certainly some upsides to this, but there are some risks that go along with it as well. And so I think this would be a good topic for us to use to kick off the year, even though it’s the second episode people will hear in the new year, it’s the first one we’re recording. Gini Dietrich: This is the first one we’re recording of the new year. You know, it’s, it’s interesting to think about this because that’s like, this is actually how I started my business. I was freelancing. I had quit my agency job and I was freelancing just to get through my wedding and get my, my then fiance moved to Chicago, like all this life change. And so I was doing work for other agencies, through other agencies on some of the bigger clients that I was accustomed to working with. And that’s how I built the firm. Like it was. I, the big agencies here in Chicago, I’d built such great relationships with people that worked there that they would say, Oh, well, this half a million dollar business is too small for us. You should go talk to Armand Dietrich. Or this 250, 000 potential client new business is too small for us. You should go talk to Armand Dietrich. And they would send business to us pretty consistently. And that’s how I built the firm. You know, that, that died down after the Great Recession a little bit. And then when we started to get a little bit bigger and they started to go, Oh, wait a sec. Maybe, maybe you could be seen as competition in, in, in some cases. But I, I probably spent three o