20k to 147k/mo profit

An agency I worked with went from $20K to $147K per month in profit. 

This week’s newsletter is for agencies who are already making more than $1M in annual revenue. That being said there are some truths here you can apply at lower levels of revenue as well. 

If your agency has already hit seven figures in annual revenue, you already know the truth:

At a certain point, more clients ≠ more profit.

In fact, for most agencies I work with, more clients just means more complexity,  more fire drills, and more money leaking out of the bottom of the business.

If you’re on the path to $10M+ and want to generate at least $1M in profit over the next 12 months, here’s the exact framework I recommend (and the same one I use with my own clients).

I’m Nick Avaria, agency owner, and founder of Agency Acquisitions. Watch this week’s newsletter broken down with the numbers on YouTube here.

Step 1: Stop the Profit Leaks Inside Your Agency

Every agency thinks they need more clients. But in reality, they need fewer inefficiencies.

And in some cases, you actually need to fire your worst clients that are draining your time, and billable hours. 

Before you sell another deal, you first need to start auditing everything:

• Every SOP

• Every client

• Every handoff

• Every workflow

• Every bottleneck

• Every hour your team spends on work

Because when an agency’s margins are low, the problem is almost never, “bad clients.”

It’s almost always what’s happening inside the business.

You lose money in only 3 places:

1. The project type: the service itself is unprofitable

2. The role: a specific seat consistently over-delivers

3. The individual: one team member takes far longer than others (and is making the work unprofitable) 

Each one has a different fix:

• Improve SOPs

• Fix sloppy handoffs

• Retrain team members

• Raise prices if the market allows

• Fire clients who consistently drain time

One of my clients doubled their profit in just 3 months simply by fixing role-level inefficiencies.

No new hires. Just cleaner delivery.

Step 2: Double Down on High-Margin Products (and Eliminate the Rest)

Not all products are created equal.

When agencies finally start tracking their effective hourly rate per service line, they’re shocked at what they find:

• Some services print money

• Some services quietly destroy the P&L

You should know for every single product you sell:

• Cost per hour

• Hours delivered

• Delivery margin

• Actual billable rate

• Consistency across clients

Once you see the data clearly, the next steps are simple:

• Sell more of the profitable products

• Fix or eliminate the unprofitable ones

• Reverse engineer why certain projects hit target margins

• Optimize the rest accordingly

Sometimes adding more profit isn’t about addition, it’s about subtraction. Don’t sell services that you can’t make a profit on. 

Step 3: Fix (or Replace) Low-Margin Clients

You could have a high-margin product, but a low-margin client will still kill profitability.

Using the same data, sort clients by their effective hourly rate.

Some will be far above your target.

Some will fall dangerously below.

For the clients dragging your margins down, the conversation becomes simple:

• Right-size the scope

• Increase the retainer

• Meet in the middle

• Or part ways

And here’s the kicker:

Letting go of one low-margin client often frees up enough time to add two profitable ones without hiring.

One agency I worked with went from $20K to $147K per month in profit using only this step.

No new team members. Just better client mix and better pricing.

Here’s the quick recap to your next $1M in profit: 

• Audit delivery and seal the leaks

• Fix or cut unprofitable products

• Fix or replace unprofitable clients

• Sell fewer, better, higher-ticket retainers

• Install management systems to maintain margins

If you do this in sequence, you will see a 30 to 40% margin swing in a single quarter.

This is how modern agencies scale, not by hiring more people, but by creating more profit per person.

Want to see the breakdown of the numbers? Here’s the full YouTube I recorded this week to show you: 

If you want to get on my waitlist for 2026 to help your agency scale faster and make more profit, book a time to chat to see if you’re a fit for working with me 1:1.

Nick Avaria