How To Start An Agency: The Ultimate Guide

Table Of Content

Starting an agency is a venture that can be both thrilling and rewarding, but it comes with its fair share of challenges. To succeed in this space, investing significant time in planning, conducting thorough market research, and obtaining a solid understanding of your target audience and competitors is essential.

Without these fundamental elements, you easily miss the mark and fall short of your goals. But when you commit to careful planning, researching the market and competition, and knowing your audience, you'll be in a much better position to succeed and grow your agency.

If you’re a skilled marketer or have a keen knowledge of marketing, you’ve probably dreamed of starting your own digital marketing agency and building a business that helps people make the most out of their digital platforms.

Unfortunately, most people don’t follow through with their dreams simply because they don’t know how to get started.

Now, if you’re serious about entering into this lucrative industry and creating an agency, it’s easier than you think but not that easy 😉

So What is digital marketing?

Digital marketing, also known as online marketing, involves leveraging digital channels such as the Internet and other digital communication platforms to promote brands and engage with potential customers.

These channels include email, text and multimedia messaging, social media, and web-based advertising. As most people today are almost always connected online, digital marketing has become crucial for businesses to reach and engage with their target audience effectively.

Let us guide you through starting a digital marketing agency with our comprehensive and informative guide. This actionable guide is designed to help you create your own digital marketing agency from the comfort of your home, providing you with valuable insights and expert advice every step of the way.

Before we get into the how; let’s look at some pros and cons of starting your own agency!

Pros

1. Flexibility: You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own, for a while of course. Apart from this, you can choose what kind of brand or people you want to work with and say no to those who you don’t believe in.
2. Ability to start from home: One major benefit of starting an agency business is that you don’t necessarily need to have a dedicated workspace. You can learn how to start your own marketing agency, from the comfort of your home, at least in the beginning; until you get a few clients and want to expand.
3. Be an expert in your niche: Lastly, one of the pros of learning how to set up an agency is that you get to do the work that you like and know better than anyone else. There’s nothing better than being able to focus on the area of work you’re strong in. It not only makes work enjoyable for you but also offers clients the best solution to their problems.

Cons

1. High Competition: When you are creating an agency, there are high chances that there are a lot of digital marketing agencies that provide online marketing services just like you! It’s important to spend time analyzing the market and figuring out where there is more demand. If you don’t stand out to be the best or unique at least, you are not likely to stay in the market for long.
2. Hiring & Motivating Employees: while you are learning how to set up an agency hiring a good candidate, who does not just have theoretical knowledge but can also solve problems when needed can be a task! And not just that, you need to find creative ways to motivate them. It's important that you're able to offer great incentives and a good work environment for your employees.
3. Longer Sales Process: Hiring an agency can be a big-time and money investment for your potential clients. It’s important for you to predict a longer conversion funnel and plan accordingly. You also need to stay in constant communication with them to make the conversion from lead to clients.

How To Start Your Own Agency?

Here are the first steps to get you started:

1. Identify Your Niche

Why?

Because nowadays, most businesses look for online marketing companies that offer specific services that they might be looking for.

Creating an agency begins with identifying your niche. Choosing a specific area of expertise sets the foundation for your business and helps you stand out in a crowded marketplace. 

When starting an agency focusing on a particular type of service, such as digital marketing or public relations, you can differentiate your agency and offer unique value to your clients. Identifying your niche requires careful research, reflection, and a deep understanding of your strengths, passions, and the needs of your target market. 

Let’s say you own a real estate business, and you’re looking to work with an internet marketing agency so you can win more business. Which marketing agency would you rather work with – one with many years of experience specifically helping real estate businesses or on which has helped all kinds of businesses?

You’d pick the first one every time because of their industry expertise and focused message that appeals to you specifically.

This is why determining your niche should be the first step when running a creative agency, and an essential one if you want to scale. Before you pick a name, rent your office space, hire the people, or look for clients, you need to define your niche:

• This is who we are.
• This is what we do.
• This is who we do it for.

How can you determine your niche?

The first step when starting your own agency is to take a moment and list down points to answer this question.

“What will distinguish your digital marketing firm from similar ones in the market?”

You probably had several things that come to your mind or maybe none. Figure out what makes you stand out from the rest of the digital ad agencies.

Use the list you created to form a Unique Selling Proposition – USP.

USP is a concise statement of your service. It will describe how your service can solve a client’s specific problem and why they should choose you over other agencies.

Since the market is so large and there are so many other marketing agencies out there, don’t generalize your services. Look at what specific problem your internet marketing company is really good at solving (and one that you also enjoy doing) and specialize in that!

If you plan to start a creative agency Figure out something innovative you can do that most of your competition doesn't talk about. Or something they may be offering, but don’t talk about it or promote it. You will have the competitive edge for that particular point.

2. Identify Your Target Audience

Now that you have figured out how to start an agency and what services you're going to offer, it's time to determine who will you provide those services! Identifying your is one of the most essential steps toward success for any company or business, especially if you are just getting started.

Consider at least these factors and think about who your ideal target audience is:

• Business model (SaaS, local stores, service companies, e-commerce companies, etc.)
• Industry (Healthcare, Education, Insurance, etc.)
• Company size (SMB, Fortune 500, etc.)

Trying to sell your services without understanding your ideal target audience is like driving with your eyes closed. You're bound to crash sooner or later.

That is why while creating an agency you need to create a client profile that describes your most ideal clients, target customer, their purchasing habits, and more. A client profile is not just based on an assumption, it is real data that must be well-researched.

A client profile can include information such as:

• Where does your TA hang out on and offline?
• How do they generally communicate?
• What is their demographic information? (Age range, location, job title, etc.)
• What is their psychographic information? (Behavior, lifestyle preferences, personality, etc.)

Once you have created a client profile, you will get an idea of who your target audience is. You can understand their pain points and explain how your services will benefit them & solve their problems.

For example, Clientjoy is a SaaS product that helps Agencies and Freelancers manage their Leads, Proposals, Clients, Invoices, and Payments all in a single place.

Our target audience looks something like this:

• Small Agencies and Freelancers (Business model)
• Digital Marketing services, IT-Service, Design, and Consulting (Industry)
• Smaller than 20 people (Company size)
• Developed Economies with English as their Business language (Location)
• Doesn't have client portal in CRM, Uses multiple tools (Pain points)

‍How To Charge Your Services

For any business owner, the concern is to not only to provide services of value to their clients but also make money. Similarly, while learning how to start an online agency, you also need to make a profit in order to keep it up and running & to thrive and grow!

So, the next thing to do when setting up a new agency is to decide how to charge your services. It is one of the most challenging aspects of how to make an agency successful.

If you underprice your services to drive demand, customers might view your services as “cheap” and it's the last thing you want to be seen as. It will also impact what kind of customers you attract.

However, if you overprice your services, it's likely that your target customers will explore and look at your competitors to ensure they get the best value & deal as well. That is why it is important to research your competition and then decide on a business model when you are starting an agency business.

When charging for your services, it is important to consider various factors such as the value you bring, the competition, and the target market. Key factors to consider when deciding a pricing model for your agency:

• Understand your TA: Identify the type of customer you want to attract and how much they're willing to pay for your service.
• Understand your costs: This is critical because first, you need to identify all your costs such as salaries, rent, operating costs, etc., and then decide on charges for your services factoring in your profit.
• Evaluate competitors: Find businesses that offer similar services as you. And then, compare the prices of different businesses to determine where your agency fits best in the marketplace.

Your business model can either make or break you. It can influence various aspects of learning how to start your own agency, from who you hire to how you pitch. So, it's imperative that you choose a model that aligns with your long-term goals.

Ways to price your services:

Retainer

This is the simplest of all where you and the client agree on a flat monthly fee specifying the number of deliverables. When starting an agency, keep revising the contract depending on the workload and time spent on the client.

Hourly

While creating an agency you could also charge the clients based on the hours spent you have on the project. It's an ideal approach for those who have just started and are unsure of how long the project will take.

Project-based

It means charging a flat fee for a whole project rather than hourly. It depends on the project whether it's a month-long or two months long or more. This model works best if you have expertise in the field.

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Now that you have selected a new business model and identified your target audience and niche, it's time to actually find and acquire new clients.

Ways to acquire new clients

Here are a few ways to acquire new clients when you are starting your own agency:

Gather testimonials

If you've freelanced in the services your agency offers, ask your previous clients for testimonials. If not, offer free sample work to several of your ideal clients in exchange for a testimonial.

Give free advice every day

Build your presence on platforms like Quora or in Facebook groups and answer questions that solve the problems of your target audience.

Networking

A good tip for when you are learning how to start a design agency is to network with people is to attend events related to the services your new agency now offers. It's a good way to build connections with people who can either: become a client or refer you to someone in their network who could become a client.

Furthermore, getting new clients is important when you are learning how to start your own agency, but keeping your existing clients is equally important, if not more.

The simple reason is that happy clients turn into loyal ones and they can increase your agency's cash flow. Additionally, they can refer you to their network, bringing in new business for your agency.

However, most people running a creative agency are focused on generating new clients than retaining current ones. Although, it is more likely and convenient to sell your services to an existing customer than to acquire a new customer.

That doesn't mean finding new customers and revenue streams is not important, but, the easiest (and inexpensive) source of new revenue is right there in front of you!

Some ways you can retain clients for your agency:

Communicate constantly

Respond to comments, consider their suggestions, and more. Figure out ways to engage with your clients. Even if they haven't interacted with you for a while, reach out to them and re-establish your relationship

Offer discounts to loyal clients

When starting a design agency you could Have a customer loyalty program that rewards customers for their continued loyalty. For example, the more they offer you business, the more they're rewarded.

Provide free valuable content

Sending out newsletters that not only add value to their lives but also keep them updated about your agency is a great way to retain clients. Even though it is quite simple, newsletters remind clients of your brand every time they open their inboxes.

Give them priority

It is as simple as things like this. Solve their problems as soon as possible and give them awesome customer service.

One of the most important steps while learning how to create your own agency is to put emphasis on content. Content marketing is one of the most effective strategies to market your agency. However, most types of content we create may not provide value to the audience in the long run and many articles or blogs may not remain relevant to current trends and seasons.

So, now that you have a few clients, the next thing you need to do is build your own inbound marketing machine through evergreen content.

But first, you must be wondering why Content Marketing and not paid ads. Let's take an example of hunting v/s farming. When you go hunting, you get your “reward” the same night and that lets you enjoy the meal within a short time. However, with farming, there's a long wait before you get the reward you want. But let's not forget that the output farming provides is 1000 times more than hunting.

Similarly, paid ads may be a faster way to get leads but it is a short-term activity and will shut down once you stop paying! On the other hand, content marketing may be a little slower but it compounds over time and produces more leads in the long run.

Build Your Inbound Marketing Machine

When you start an agency the best solution for you is to create evergreen content. You need to create content that will provide the same value to the audience as time passes and that attracts organic traffic even after 5 years.

For example, an article on “How to lose weight” is evergreen because the process or methods is not going to change much and many people will be searching for it for years to come.

However, an article on “The Best Marketing Techniques of 2019” is not evergreen because these techniques will keep changing and marketers won't care for past techniques.

So, what does evergreen content look like?

Most kind of evergreen content is educational and many of these titles tend to start with “how to…” or are thorough guides on a specific topic. While starting a creative agency, keep in mind it is quality content that is developed and crafted to be SEO-friendly whilst being extremely relevant and qualitative.

Evergreen content is the kind of content that encourages better rankings, happy leads, and loads more social engagement. In short – it is timeless content.

Here are a few examples of Evergreen Content to inspire your creation:

1. Signs Of A Toxic Client & How To Deal With Them
2. How To Create A Proposal Outline
3. A Quick Guide To An Effective Client Meeting

These are the type of content that won't go out of date and they revolve around a topic that will always be relevant to readers, regardless of the current news cycle or season.

Build an Online Presence that attracts your ideal clients

Did you notice that nowhere until now have I mentioned building a website? This is because getting the business going is more important than building a website with no revenue.

So now that you have a few clients and have started creating evergreen content, it's time to build a website that not only distributes the content but also informs your audience about the latest updates, explains your value proposition, boosts brand recognition, and drives traffic.

When you are learning how to make an agency whether you're a huge agency or a small one, it's no longer feasible to run a business without a web presence. In this digital era, most of us turn to the internet for everything, from product research to location and operating hours and your audience is no different.

This is why, it is essential for you to build a stellar website, even if it's just a simple, well-designed one. It can give you an edge in your field and open up new markets for your agency.

Building a website can be a hustle, but only if you want a custom design, custom programming, and a custom marketing plan. You will spend weeks, maybe even months, designing your website. And unless you're doing it yourself, it'll cost thousands of dollars.

Keep in mind when you are wondering how to start a agency a quicker and cheaper way to build a good website for your agency is to host it on the right platform, have a Content Management System (CMS), and use a pre-built template.

What is Content Management System? (CMS)

A Content Management System is the fastest way to set up a powerful and well-organized website. With a CMS, you don't have to write any code.

With a CMS, you can log in to your website, create new pages, categorize them in different ways, edit them, add pictures, and change almost anything. It lets you edit without understanding anything about code & gives you a foundation to build a website in minutes, not weeks.

Lastly, if you do not want to go big and spend a lot of time building a website, what you can do is create a stunning landing page with Linkjoy that works as a micro-website. Among other features such as Linkin Bio and URL Retargeting; Linkjoy allows you to create a beautiful landing page with its curated pages in minutes!

You can keep this landing page as your website & primary source of leads or you can build this micro-website while you are in the process of building a website while you are starting a design agency so that you can lead your audience where you want!

Try Linkjoy for free now!

Set proper workflows or processes from the get-go

One way that your agency can thrive is to have a proper workflow or definite processes for repeatable activities. Once your business is up and running, you need to have efficient documentation in place to manage these processes and workflow.

Even if you have just started your agency, creating solid processes for all your workflows is going to help you scale much faster as it will take a lot of weight off of your shoulders.

Why having solid processes will be beneficial for you?

• Your employees will know everything about a specific task or project, so they can complete it quickly without having any doubts.
• As everything has been clarified, there'll be fewer mistakes – saving you tons of time, resources, and money.
• It will make it easy for you to delegate work to employees and independent contractors as your agency grows.
• Allows you to step away from the business because you no longer need to micro-manage everything.
• And much more...

What kind of processes should you create?

Generally, when you do a certain task more than three times, you should record it and make a process for the same. Even if you're a just one person business right now, recording processes will help you when you hire someone new and hand that certain task over to them.

There are some standard operating procedures you should define so everyone knows what happens when; who does it, and what the outcome should be:

Sales Pitch

Human Resources

Proposals

Pricing & Billing Policies

Onboarding New Clients

Business Development

Creative Briefs

Disputes With Clients

Delivering Work

Managing Client Expectations

Generating & Qualifying New Leads

A good tip for when you are learning how to start a media agency creating defined processes not only provides leadership but also sets expectations and ensure consistency without having any leader to manage each and every task.

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Hiring The Right Talent 

Now that you have a few clients, have created an evergreen content engine, and set processes for repetitive tasks, your focus should be on building relationships and on the growth of your content marketing agency. And hiring the right talent can make or break your business.

As you've just started an agency, it's best to hire a small team of employees rather than many people. First, hire a small team that helps you complete client work and then expand your company size as your agency grows.

However, you've got to be careful when you are starting your own agency about who you trust who is working for your own business first, or you could end up losing tons of money. You need to make good hiring decisions and understand what type of candidates will be good for your agency and who can work well in the agency culture.

But before we talk about how to make good hiring decisions, let's take a look at some of the job roles that you'll need to hire first for starting a creative agency:

• Copywriters- The success of online marketing company efforts for yourself and your clients will heavily depend on how qualified copywriters are because they're the ones who will use words to sell your and your client's products/services.
• Designers- Without good visuals, the content copywriters create will be next to useless. So, choose your designers wisely!
• Project Managers- They are one of the most essential people you need to hire because they will make sure everyone stays on task and all projects get completed on time, on budget, and to the client's satisfaction.
• Developers- If your services include building a website for the clients, you will need developers to bring that to life. Make a list of qualifications for developers, such as knowledge of WordPress and JavaScript is a compulsion, and hire accordingly!

These are a few of the essential roles that you will need to hire for when you start an agency. Now, to build a dream agency team, you need to know how can you make good hiring decisions such as hiring people who are self-motivators i.e., someone who will figure out a way to solve the problem rather than sitting idle; and someone who will get adjusted with the agency culture and work well with the team rather than being non-inclusive.

Apart from this, you'll also have to decide whether to hire less expensive employees who aren't that experienced or expert employees who will demand higher pay. Think about what's most important to you, and consider hiring a mix of employees if you can't afford to hire an entire team of experienced employees.

Implement The Right Tools

When you're starting an agency, there are many things that you need to take care of.

To understand it better, take a look at this: The marketing team generates leads to pass on to the sales team; The sales team pitches to the leads and closes them as customers; The finance team takes care of invoicing and makes sure that the client pays the bills.

And then there's the creative team; The account managers get the clients to complete the brief, and the marketing/digital experts collaborate on the actual project. Throughout the entire process, the account managers cooperate with the clients and make sure everyone's happy.

Now that's a lot of workflows happening simultaneously, which means that a lot of things could go wrong and there are a lot of things that need to be looked after.

However, in this digital era, there are hundreds of tools and software that are made to ease such processes and tasks. There are tools for digital marketing companies, invoicing, customer relationship management, project management, and much more.

So, to avoid a lot of headaches in the long run, implementing the right tools for your agency can save you a ton of time, money, and energy. And with so many tools being offered, it's important to choose the ones that work best for you and make sense for your needs.

When creating an agency, It's a major challenge for most agencies, to create a tech stack that not only automates their tasks but also helps their clients reach their goals.

Track Your Competitors

You've probably heard or read that you should keep your friends close and enemies closer. And if you've read The Art of War, you'll know it says that you need to know your enemy. If you want to win you need to know who you're up against.

The same applies to you as an agency owner; you simply cannot ignore the competition. No matter how much you'd like to dominate the niche, there are other successful agencies, that are already established in the market. So why not monitor your competitors' activities and learn from their successes and failures?

Why you should track your competitors?

When you are starting an agency business, you're aware of your strengths, weaknesses, best opportunities, and worst mistakes. And you don't just sit on that information, you use it moving forward to make data-driven decisions.

Apart from being aware of what works for you, you also need to be aware of the tactics your competitors are trying out. So, here's why you should track your competitors:

• You can watch your competitors' business strategies play out, and analyzing them will help you avoid the mistakes they make.
• It is easier to come up with new ideas if you know what your competitors are doing.
• Just like you can learn from their failures, tracking your competitors can also help you figure out their keys to success.
• If you offer similar internet marketing services and see that it works for your competitors while you struggle with them, you can observe the differences & see what you could do better.
• When a competitor discontinues a feature that you still offer, you can start pushing that feature to snatch your competitors' customers.
• When customers of your competitor are crazy about a particular feature, you can let your team know it's a well-liked and popular option.

This all may sound exciting and fun, but keep in mind when you are starting an advertising agency that spying on your competitors is definitely not a guaranteed ticket to success!

Although, it can be the single greatest strategy you ever use which can strengthen your position in the market.

Track Relevant Metrics

Whether you're starting an agency business, you may have wondered sometimes how you can be busier than ever, and yet you can't see any monetary profit for the hard work.

So how do you measure your agency's performance?

The way not to do it is by relying on your gut feeling. Running a successful agency requires a thorough analysis of the deliverables, client acquisition, and much more. And it can't be done without tracking relevant metrics.

Metrics, also called KPIs (key performance indicators) display a measurable value that shows the progress of your agency's business goals. They indicate whether you've achieved your goals in a planned time frame.

There are hundreds of different key performance indicators that can be measured, but there's no use in measuring all of those. Depending on your goals, you should track metrics that really show how your agency is doing.

Tracking irrelevant KPIs will not only distract you from focusing on the metrics that truly matter but you'll also end up stressing about the numbers that have little to no impact on your agency's development. So, it is highly important that you not only track business metrics but also choose the right ones to perceive.

Examples of metrics for an agency:

• Operations Cost
• Gross Margin
• MRR (Monthly Recurring Revenue)
• Revenue Earning Efficiency

There are a few important metrics that reflect on your agency's performance and indicate growth or decline. It doesn't take much to start measuring a few simple numbers that will make a big impact on your profitability.

Having good cash flow, efficient workflows, and simple yet clear numbers that show your progress will not only give you peace of mind but also make running a creative agency much easier and more enjoyable for both you and your team.

Final Thoughts

Phew! I know it got a little bit overwhelming but that's how you know you're following your dream! Starting an agency is not for the faint of heart, you need to keep going even when the times get tough.

Starting your own agency can be a lot of hard work, but it's not impossible. Keep these points in mind; take the time to plan out what kind of agency you want to build, and invest in a team and culture that will make your job of getting new clients an easy one.

Now you have the ULTIMATE GUIDE on how to start an agency business! What's stopping you to start right away? Starting an agency requires hard work, dedication, and a willingness to adapt and evolve over time. Use the steps and tips we covered to get started immediately. With the right strategy and processes in place, it won't be long before you start your own successful agency!