How much should you earn as a digital agency owner?
The big question at a recent workshop was, “How much should you earn as a digital agency owner?”
It was the big question.
Everyone thought they should earn more.
Everyone felt they worked really hard but what is a fair wage? £20k? £40k? £80k? £160k? £320k?
Well, the answer was all of these. Why? Because it all depends. Here are some of the comments (names changed to protect the innocent).
£20k Therese: “I am in Year One with one member of staff and I live at my boyfriend’s. I am laying down the foundations for the future of what they call a lifestyle business but first we need to get going. So, as along as I don’t lose money then I am happy.”
£40k Terry: “It is year seven and we are seven people. And as Robert says, we are plodding. We are stuck in so many senses, but I keep my fingers crossed that the big client will come in. We have some nice clients, but I think we don’t charge enough, and I wonder if we are really any different from any of our competitors. I don’t think so. Maybe that’s the trouble.”
£80k Patrick: “I think £80k is about right for me: 33 years old, two kids, mortgage etc. Couldn’t survive on less. This was never meant to be a lifestyle business and I am not finished yet. Turnover is around the million and we are scaling for growth. More processes, more systems, soon a dedicated business development manager. Can’t believe people survive on less – not for running your own business and paying a London mortgage.”
£160k Penny: “I run a board and 50 staff… in the real world I would earn more (as my partner does). We are growing an asset and we are growing a community. I have earnt every penny of that 160k and it is a fair wage for an incredibly demanding job. I’d like to see someone else run such a successful and happy agency as well as I do. Yes, we are growing to sell and yes, we have re-mortgaged the house and have put the kids’ education on the line for this business.”
£320k Gustave: “We are pretty much ready to sell. That was always my ambition. To hit the big numbers. 170 staff. £16m revenue. 17% EBITDA. We are ready to sell what has become a pretty profit machine. £320k is less than if I were a banker and I’ll make my serious money when we sell. I’ll take about 40% of the sale price of £8m less the taxes etc. I can live with that. But has it been worth it, the divorces (2), the slightly lost kids (3), the ridiculous pressure to make stuff happen? I am glad I am getting out soon, before I get a full-blown heart attack!”
So, what is the answer…? It depends… it depends on the stage in your life and the commitments you have. It also depends on whether you want a lifestyle business or business to sell. These are questions we don’t ask until they confront us.
How much do you earn? Are you happy? Maybe that is a better question!