Are you running a full-service agency? Have you already considered niching down? What about broadening your services once you do? Today’s guest built an agency that became a world authority on Google ads. Even though he eventually sold, he now believes more growth may have been possible with patience and the vision to expand his services after niching down, which he calls the “hourglass method”. Tune in to learn about his early failures and successes as a young entrepreneur, the lessons he takes from his years of experience and selling his agency, and why he believes agencies are the future of most businesses.

Kasim Aslam is the founder of Solutions 8, a highly successful Google Ads agency and the host of the Perpetual Traffic podcast. After seeing his dreams crushed by a financial collapse and rebuilding to reach the highest successes in the industry, Kasim talks about the importance of having a strong business partner and lessons he took from selling his agency. Tune in to gain insights from Kasim's experiences and learn valuable lessons from his agency success story.

In this episode, we’ll discuss:

Why it’s okay to start broad before niching down.
Becoming an authority on Google ads.
Attracting potential buyers to your agency.

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Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

Ending Up $150,000 in Debt in His Early 20s

Despite having sold the most successful Google Ads agency and knowing few people have ever gotten to that level of success in the industry, Kasim is quick to acknowledge he’s not the brains of the operation. The joke between him and his partner is that Kasim made promises and his partner kept them, which worked out really well for both. After growing their agency which they sold in 2022 to now, for the first time in two decades – he’s an employee.

In recalling his agency journey, Kasim first remembers his greatest failures. In his early 20’s, he was working in the banking industry building software right at the time of the financial collapse of 2008. “It was the best thing that could’ve happened” he says looking back. He was making way too much money at a young age, had just bought his first house, a car, and was spending way more than he should have. However, once he lost his job he was quickly reminded that he did not actually own those things and ended up losing them. He was just 22 years old, $150,000 in debt and felt his life was over.

The lack of funds to float a percentage of a software building project had him searching for other types of web work. Website maintenance quickly led to website development, SEO work, and eventually to his agency, Solutions 8.

The Secret to Choosing The Best Niche For Your Agency

Starting an agency after a personal setback can be a daunting task, but Kasim managed to rebuild from scratch to have a profitable business with 15 employees. However, he went too wide on his offering and soon found it felt like having eight different businesses.

The agency was certainly profitable but he was miserable. The business could not run without him and he was working 12-hour days. At one point, he tried to sell the business. “I kept trying to get rid of it,” he recalls. He never got too close to actually selling it, since the valuation offered by brokers didn’t come close to his expectations and he knew his books were a mess, which made the agency much more difficult to sell.

Many things needed to be fixed, so Kasim hired his current business partner with the intention of having him run the agency. Right away, his partner started to highlight issues that could be fixed. Having someone in the trenches with him reignited Kasim’s passion for the agency and soon they were working on growing it together.

The years of running a full-service agency were incredibly stressful, but Kasim sustains it was the best way to eventually find success in the right niche. “You can’t niche down right off the gate because if you do, you’ll pick the wrong niche,” he says. In his view, it’s okay to start broad as long as you have the intention of niching down.

Once a niche is established and successful, Kasim suggests branching out to add related services or offerings. It’s the hourglass formula – start broad, niche down, branch out – to maximize your business’ potential and cater to a wider range of clients.

How His Agency Became the World Authority on Google Ads

The Google Ads piece of the business started by adding this offering to his real estate business. He picked the best Google Ads agency he could find and the partnership went so well that Kasim was soon sending agency clients their way. On one hand, it killed his margins but it was turnkey so they handled everything and all Kasim had to do was sell it and hand it over. Eventually, he started selling Google Ads as a supplement.

It was Kasim’s partner who first suggested the agency should start selling Google Ads. Although initially hesitant, fearing that it would limit their scope, Kasim eventually recognized the value of specializing. Having first focused on building sales and client support, he was ready to build the fulfillment piece by niching down.

Does he regret selling someone else’s services? Not at all. Kasim’s message to agency owners is that it’s okay to resale somebody else’s product while you’re still figuring out your niche; just remember the importance of owning the relationships and providing value beyond being an affiliate.

As his agency grew and became three times the size of the partner agency, issues started to arise. He needed more resources from the partner agency to meet the demands of his expanding client base. However, the partner agency was hesitant to invest too much, fearing they could easily take their business elsewhere.

Negotiations for a new agreement between the two agencies turned sour and, ultimately, Kasim resorted to swiftly building an entire fulfillment team in India by targeting Google's offices there. The transition was not without its challenges, but with their previous experience with the partner agency they soon became a niche authority.

When to Sell Your Agency and How to Get More

Kasim did end up returning to the idea of selling, now in a better position to get the valuation he expected. He had even received numerous unsolicited offers for his agency, with some of them coming from reputable venture capital firms. However, he was advised to prioritize a disciplined process and not settle for the first offer that came his way. So he conducted a competitive process exploring multiple options to secure the best deal.

Interestingly, Kasim notes that the offer that eventually caught his attention came from a company backed by SoftBank, based in India. He had initially set his sights on offers from Silicon Valley companies. However, his mentor saw potential in this particular offer due to their "buy-side mandate," which made them a serious contender.

In terms of the price, Kasim admits he sold his agency for lower than he could have negotiated. However, it was an all-cash transaction with light due diligence and a short timeline, indicating that the buyer was serious and had the necessary funds.

In terms of timing, he firmly believes he sold just in time, with AI about to replicate what they did. This way, he was able to capitalize on the demand for his agency's expertise and avoid potential hurdles in the future.

Reflecting on what he could have done differently to potentially negotiate a higher price, Kasim knows he could’ve explored other options and engaged in more negotiations. However, he doesn't dwell on this, as he is satisfied with the terms of the deal.

Learning to Craft a Compelling Story to Attract Potential Buyers

Even though he doesn’t regret the selling price and moment, there are some things Kasim would’ve done differently with the agency. For instance, one of the main missed opportunities for revenue growth was the failure to pursue other avenues of monetization.

Looking back, he sees he could have doubled his revenue if he had added Facebook ads to his agency's services. Despite specializing in Google ads, many of his clients expressed interest in running ads on other platforms, such as Facebook. However, he became too focused on what was working and didn't explore these opportunities further.

Kasim realizes that he should have focused more on showcasing the potential growth of his agency, rather than just its current success. In this sense, he also missed the opportunity to tell a compelling story about a company on the brink of exponential growth that could attract more buyers and potentially increase the value of the company. With this, he’s learned that not only having strong financial performance but also crafting a narrative that captures the imagination and potential of the business.

Why Agencies Continue To Be The Future of Business

With new experience and perspective gained after selling, Kasim now thinks about the importance of taking risks, trying new things, and learning from failures during the early stages of your career.

Starting out young gives you the opportunity to experiment and try out everything and figure out who you are. This is true for anything in life, including entrepreneurship. Of course, this means you’ll also mess up a lot, and that’s okay, as long as you stay true to your character.

If you do this in your twenties, you’ll have an idea of what you want to give a serious try by your thirties. With a better perspective, your forties will be the time to cash out.

For his part, Kasim emphasizes the importance of confidence in one's abilities, which he believes comes from having enough experience. By now, he has built multiple successful agencies, and once you have achieved something once, it becomes easier to replicate that success. For his next steps, he would love to broaden his horizons but also keep in mind that the agency model is the future of business. Despite the challenges and saturation in the agency space, Kasim believes in its potential and his ability to excel in it.

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How Kasim Aslam’s Agency Became the World Authority on Google Ads | Ep #671

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