A lot of agency founders we meet who get to 20, 30, 40 or 50 employees feel a massive pressure to get everything right. The responsibility of so many livelihoods can be a little scary. The problem is if you’ve never done it before how do you know what is right and what is wrong? How do you create an agency that is future proof, but not too rigid that you end up dismantling the whole thing at the next stage?
You can either continue making things up as you go along or you can get external help. Saying that, there will always be an extend of guess work stepping into unknown territory. Your compass just calibrates when you get external advice. Right now agency founders are getting help to run their agency by either appointing a single agency non-executive director or joining a peer community. Although these solutions have some benefits in specific circumstances, there are also shortcomings. Especially in the case of an agency non-executive director.
An agency non-executive director is often abbreviated as agency NXD, agency non-exec or agency NED. An agency NED provides independent advice (an outsider's perspective) to your agency on topics such as finance, operations and sales & marketing. They sit on your board alongside your other directors and are typically present during monthly board meetings. But unlike your executive leadership team, they do not get their hands dirty in the day-to-day operations of your business.
In the agency industry, non-executive directors are typically people who have successfully built their own agency. Or people who have worked at board director level in an agency - typically a large agency such as those part of the WPP, Omnicom, Publicis, Dentsu networks. They aim to help agencies not make the same mistakes as they did, by most commonly sharing the solutions they implemented in their previous roles.
You can find a more formal definition of a corporate non-executive director here.
The price spectrum of how much typical agency non-executive directors charge is wide, because it depends on many factors such as their skill level, demand and their reason for doing the job.
But most commonly agency NXDs will charge between £1,000 to £5,000 + VAT per month for their services. The mean being around £2,000 + VAT per month.
In some cases agency non-execs will also ask for equity in your business - often tied to very specific growth metrics for example if your agency reaches a specific amount of fee income.
In a perfect world agency founders looking for external help to run their agency would be able to access a wide variety of advisors:
Agency experts (such as agency non-executive directors), experts from other industries & walks of life and agency peers. The advice they would receive is relevant to their agency needs and size. Finally their peers would run similar size agencies. Just be nice and humble people that wouldn’t be afraid to admit they’re struggling too.
Agency founders would be able to pick and choose the advice from multiple advisors that works best for their agency - rather than be dictated by a single person what to do.