Why Agency Owners Get Stuck Between $1M and $10M (And Never Get Out)

Kayvon Kay (0:00)

There's a place between 1 million and 10 million where most agency owners get stuck. Nick Avaria calls it the swamp. He's bought and sold seven agencies, and he says the swamp isn't a talent problem or a marketing problem, it's a missing middle problem. The systems, the data, the management layer, nobody signs up to build. Today, he breaks down why up to 65% of middle managers add negative value to a small business, why the manager you promoted from inside is quietly costing you money, and why lifetime value, not customer acquisition cost, is the number that actually gets you out. If you're an agency owner stuck in the swamp, this episode is your way out.

This is The Vault. Let's unlock it.

Nick, welcome to the show.

Nick Avaria (1:00)

Thanks for having me, Kayvon.

Kayvon Kay (1:01)

Listen, for anybody that's listening right now, we are going to be deep diving into the pitfalls of how businesses struggle and they stay between that one to 10 million, and agency owners, and if you have agencies, how you can get out of the day to day, so you can actually be able to enjoy your life, get your time back, and still have the business in front of you. Nick, I know you're an absolute expert in this. Talking to you before, you've talked about, I think, selling multiple businesses, all profitable. But yeah, tell us a little bit more.

Nick Avaria (1:37)

Yeah, so I mean, like, look, I've bought and sold, you know, seven agencies by this point. Some of them were roll up M&A kind of plays. And, you know, I've started or bought other businesses as well, like pubs, like things in the wedding industry. Like I sold a portfolio of real estate before I sold it recently. And in all of this, I think that it really comes down to the story that my uncle told me, which was like, he's a serial entrepreneur, like he owns more businesses than even his wife knows about because he just has that many.

And he told me, Nick, you got to be independent. And what you need to realize is that if you're the boss in a business, you're actually not independent because you're beholden ethically to your employees and you owe them something. So the only way out is to actually be the owner, not the boss. And so in all of these businesses, my goal is to work myself out of a job and install somebody that actually runs a business so I can be an owner rather than an entrepreneur.

Kayvon Kay (2:38)

Yeah, I love what you just said there and I think it's so important. There's such a nuance there as you just said, work yourself out of a job. And I love how you said, behold it to your employees.

Like so important that as a business owner, and I think you agree with this, is it is our job, is our duty to make sure that we keep the lights open. I mean, this is what being an owner sometimes sucks, right? Being an entrepreneur is hard because it's not just about you and your own personal family, everyone that works underneath you and you have the responsibility there.

Nick Avaria (3:10)

Yeah, I mean, you're putting food on the table for other people, right? Like, it's like their salaries are what pays for their house, their kids, etc. Like, and you can't, you cannot take that lightly.

Kayvon Kay (3:20)

I couldn't agree more. And I love what you just said is, and if you're the one who's being the boss, you're not being the owner, you're being the boss. You might as well go work in corporation if you're doing that.

Nick Avaria (3:33)

I think there's three different roles that entrepreneurs take on that they blend seamlessly. And like, this is the actual mistake in thinking. They look at entrepreneurship as being the CEO and being the owner. And I'm like, look, no, no, no, like, that's not what this is. There's a difference between being a founder versus a CEO. Like, you graduate from founder to CEO. Then once you get to CEO, then you can get out of being CEO because you can then actually define what being the CEO at the company is, and then you can replace yourself. Right? But I want to be very specific about the difference between the founder and the CEO. The founder is a person that figures out product market fit. You're super scrappy. You get your business to like a million bucks a year at minimum. Right? Maybe, maybe too. The graduation from founder to CEO is, can you attract and keep top talent that will actually build the business better than you can because they're smarter than you.