The Size Trap

The chart shows three bars for three agency sizes. The small studio keeps 19 cents of every dollar as profit, the mid-size shop keeps 13 to 16, and the large agency keeps just 8. A shaded band near the bottom marks where profit gets squeezed. Each time you add people you add managers, tools, and salaries that don't bill before you add any clarity about who you're for, so growing without getting more specific quietly eats your profit.