Readers of this blog are no strangers to entrepreneurship. Yet, the thought of translating your entrepreneurial desire with an actionable plan may be intimidating to a lot of us.
This is especially true for service based businesses that rely on face-to-face meetings with customers to make money. You will need all the elements of an entrepreneurial mindset to make this work.
Starting up a marketing agency is one of the more popular business ideas. You do not need a lot of capital (except possibly to acquire leads). It doesn’t need a specific location or a lot of equipment like other service businesses like running a restaurant or a carpet cleaning business.
A computer with an internet connection is often the only primary tool needed to successfully startup.
The reality, however, is much different. Agencies serve as the middleman between the advertisers or clients and the publishers and this requires a lot of project planning and management.
As Reid Hoffman once said about the entrepreneurship:
Launching an agency is similar to jumping off a cliff and building a plane on the way down.
In this article, we will take you through the specific steps necessary to launch your own agency.
Identifying a service offering
A marketing agency is a broad term that comprises a lot of different offerings. This includes:
- print advertising
- online ads
- content marketing
- social media marketing
- web designing
- flier designing
- brochure printing
- influencer marketing
As a startup agency, it is difficult (nor is it advisable) to offer all these various services. Not only do you spread yourself too thin, but may also end up hiring too many resources before making your first buck.
A good strategy is to focus on a niche that you are already quite experienced at. For instance, if you come from a PPC advertising background, you could focus on this skill in the early stages of business.
Clients invariably ask for a portfolio and your past experience can help you convert these leads into paying customers. If you do not have formal experience in a niche, or have trouble identifying a specific skill to go after, you could opt for a subcontracting-based offering.
In this case, you partner with other agencies who specialize in specific offerings like PPC, SEO, and web design and focus on acquiring clients. In other words, you offer a range of services to your prospects and outsource the incoming orders to your partner-agencies.
This helps you establish a business that you may gradually move in-house as more customers start coming in.
Launch a marketing campaign
Once you are clear about your service offering, the next step is to launch a marketing campaign to build a pipeline of prospective customers. There are a number of different ways to do this, including SEO, advertising, social media marketing, and using offline channels including cold calls, cold emails, and attending trade fairs.
While you may be tempted to try out all these different channels at once, it is not advisable. This is primarily because your interaction with prospective customers is defined by the marketing channel you choose.
For instance, channels like SEO and social media marketing make up what is known as ‘inbound marketing’. With inbound marketing, the customer looking for a service approaches your business for advice.
Such marketing strategies put you in the driver’s seat to define the way your conversation moves. In this case, your business needs to have a website or a portfolio that can be accessed by visitors looking for you on search engines and social media platforms.
Other strategies like cold calls and emails make up what is known as ‘outbound marketing’. In such cases, you are the person reaching out to the prospective customer.
In such instances, your customer may drive the conversation. They may, for instance, want to see an exhaustive list of past work, may ask for price cuts, and so on. It is necessary to be prepared with answers to these questions before you start.
At the outset, it may seem like inbound marketing is a better bet. However, it is worth pointing out that these strategies also take a lot of time to bring results. Outbound strategies help you build a pipeline at a much faster rate.
Depending on the strategy you pick, it may be necessary to invest in building a portfolio through bona-fide projects or those rendered at prices far below the market rate.
In addition to this, customers may also expect you to deploy strategies that you offer as a service. For instance, customers looking for an SEO agency may expect to see their agency ranking high for related keyword phrases on Google.
All these strategies take time, money, and a lot of collaboration to bring results, and it is important to invest in the right tools for your business. Also, make sure to launch these campaigns well before you work on the other aspects of running an agency.
Registering a business
At this point, your marketing cycle is already in flow and you may or may not have started capturing leads for your business. This is the right time to get the legal paperwork for your business completed.
There are a number of online services that can help you incorporate a business for just a few hundred dollars. Branding can be everything in an agency business and so it is a good idea to register and protect your logo and other trademarks/copyrights.
It is however worth mentioning that there are a few instances when it makes sense to register a business before you start acquiring customers. If you are a sales-driven organization that relies on a sales force to acquire customers, it may be necessary for you to hire a sales team to find customers.
In such instances, incorporating a business may be important.
For most aspiring entrepreneurs however, incorporating a business is not a legal necessity to offer their services. For such entrepreneurs, it is important to first build a pipeline and start acquiring customers before investing their time in paperwork.
Work out the costs
An average agency has a margin of anywhere between 20% to 30%. Agency expenses including sales, marketing, operations, software, rent, and so on will consume the rest of your income.
In addition to this, since an agency carries out business on behalf of their clients, they are often made party to liabilities that the clients are responsible for.
You may be held responsible for GDPR violations even if you were not responsible for the data, for example, if you handle telemarketing campaigns for your client and handle a database provided to you by your client.
It is important to hire a good corporate lawyer to advise you on contracts and seek a business insurance that covers all potential loss in revenue.
Hire the right employees
There are a number of moving parts in the operations of every agency. It is thus tricky to get all of this done by yourself. Hiring the right employees is thus extremely critical.
According to a ZipRecruiter report, over 82% of employers said that their biggest challenge was finding quality candidates.
You may want to consider the use of freelance contractors to quickly scale up. Later, it is worth investing your time in hiring full time workers who can be better relied upon during a high pressure campaign.
One point to note here. Worldwide, the agency business is notorious for relatively low pay and being a high stress job. It is thus quite common to experience high decibel conflicts among your workers.
Hire employees who can be good mentors and establish a culture of teaching, collaboration and learning among your workers. These first hires are vital in employee development and nurturing the right culture as you scale up.
Test your campaigns and repeat
Once you see a steady stream of client requests, you may start assessing the effectiveness of your campaigns. A common mistake among entrepreneurs is to calculate ROI solely based on the capital invested.
In the early stages of a business, time is of great essence. It is thus important to account for the time invested in a strategy.
For instance, if SEO did not require a lot of money, but cost you several hundred hours of effort, it is important to calculate its ROI based on the time spent.
This gives you a fair idea of what strategies work, and what did not. This strategy gives you a realistic view of your best strategies and thus provides you with ways to tweak them for the future.
Running a business is extremely laborious and needs a lot of persistence and hard work. The strategies offered above give you a quick roundup of the steps involved in launching a marketing agency.
Are you someone who has successfully launched an agency? Share your thoughts in the comments below.