If you're a savvy
marketer, you've certainly fantasized about founding your own firm and
developing a business that allows you to work from home and feel accomplished.
Unfortunately, most people do not pursue their aspirations because they do not
know where to begin.
The global digital marketing and advertising market are expected to be worth $322.5 billion, with a forecast of $640.2 billion by 2027. Within this industry, you can profit from various subfields, such as unique areas of expertise with little competition and fast-growing areas with significant profit potential. Launching a marketing agency could be a terrific alternative if you have marketing experience or want to establish a business that allows you to think creatively and offer solutions for a wide range of clients.
Eric Siu, Single Grain's CEO, got down to discuss the exact methodology he followed to grow this brand from a negative startup to a multimillion-dollar digital marketing agency that services Fortune 500 companies like Lyft and Amazon to help people get started.
I personally have a massive interest in this business niche because I am already doing it myself. I have created many websites to market the businesses I own. If you take a look at my online resume, I have created all the businesses from scratch. Creating my own digital marketing agency company allows me to synergize with the other businesses I already own. Because of this reason, I am going to research and write an article on this topic. I hope you readers can learn something valuable if you are also interested in starting your own marketing agency company. Moreover, I am going to explain my plan and strategy for creating this business.
Step 1: Get Experience (One Way or Another).
To begin, you will need to gain experience. You'd be hard-pressed to provide competent advice to your clients as the CEO of a marketing agency with almost no marketing experience. The most typical route is to gain this knowledge on your own. Begin as a freelancer, offering a small number of clients small-scale marketing services. Alternatively, you might hone your skills by working for an experienced marketing firm.
You can be as creative and clever as anyone in the industry, but if you are not equipped and experienced enough to deal with the various intricacies of account management and client relationships, you will be searching for a new job in no time. Some people may take years to develop the essential skills, while others may take less time. Regardless, I feel you should work at a genuine job for a while before venturing out on your own.
Workplaces are far more complicated than we realize when slaving away in them. Above and beyond the actual job you create, there are many demands, verbal and nonverbal communication juggling, and politics to contend with. How your day (and career) unfolds is influenced by everything from its structure to its culture, product, and leadership.
Before you can master your digital marketing talents, you need to have a taste of what it is like to work in the same environment as your clients. This will obviously result in you being a more empathetic and well-rounded professional. You are not going to take it personally if your clients are worried and transferring that onto you. You can use the experience of other pros instead if you do not have much experience of your own and want to get started sooner.
For Example:
Partner up with another person. Consider collaborating with a genuine marketing specialist with minimal business knowledge if you have a business mind but no marketing experience. Complementary partnerships are frequently successful.
Someone should be hired. You can also hire a team of highly experienced personnel to make up for your lack of experience. Your lack of experience is irrelevant with the proper team. Collaborate with investors. If you have some experience, you can enlist the assistance of investors to help you navigate the early stages of agency development. Collaborate with vendors. You can also use vendors as your major source of recommendations. Your agency serves as a conduit rather than a direct provider of marketing strategies or approaches in this arrangement.
Step 2: Find a Way to Distinguish Yourself.
In the United States, there are over 40,000 advertising and associated agencies. That is many rivalries. You'll need a way to stand out to attract clients and build a reputation for your business. Fortunately, there are numerous solutions available. You may, for example, target a specific type of client based on their company size, industry, or stage of development. You might also target a specific demographic, such as residents of your city or state. You might also set your business apart by having a distinct voice or opinion on marketing in general.
Step 3: Be a Contractor before Becoming a Founder.
Many of us take for granted having a job that pays well and allows us to get brain surgery without incurring a lifetime of debt. Taking the risk of working for oneself comes with a laundry list of dangers that could fill an entire blog post. A lot of that risk is mitigated by really laying the groundwork for a business before deciding to go full-time with it. For many reasons, I recommend performing some contractual work on the side while working full-time, the most important of which is...
It allows you to go it alone without taking on too much danger.
When you start doing side work, you get a taste of what it is like to be an entrepreneur. The slight but crucial aspects of owning your own business come into play, from invoicing to having to set aside extra income for taxes.
If you want to keep your full-time employment, you will need to manage your time well. Working nights and weekends when you would instead be watching Netflix is a must.
As a contractor, developing relationships is also beneficial because it may lead to referrals down the road. Making the transition from a contractor to a one-person agency will be much easier than starting from scratch if you can pay your bills as a contractor.
Another advantage of managing clients as a side hustle is that it helps you to gain experience with contract negotiations. You will need to become used to putting together a proposal, then a contract, and finally signing the relevant paperwork (NDAs, etc.). It is a game feature that you will want to streamline to cut down on the time it takes to onboard new clients.
It enables you to form vital connections.
If you can find some side work through shared connections, past coworkers, or by just networking yourself, you will gain the experience you need to create and sustain client relationships.
Another talent that many people miss early on is the ability to negotiate the price of their services. Regardless of how well you know the person on the other end, your time and knowledge are valuable. Developing the ability to figure out how much you should charge for a specific project or service will be highly useful in the future.
Step 4: Develop the Right Business Model.
A digital marketing agency can be established in a variety of ways. The services you provide and how you bill for your job become increasingly crucial in determining how efficiently your firm is run over time. The most common ways to bill your clients are as follows:
Hourly
Many consultants prefer to cost their clients by the hour. This is because they spend much time with clients one-on-one, whether on the phone or in person. With longer and more complicated service offerings, this payment model becomes muddled.
Hours spent on digital marketing for a specific customer fluctuate a lot, and they will fluctuate a lot over time. Setting up and launching new campaigns or promotions, reorganizing accounts, time spent on calls, and keeping something working well for them are all elements in play.
It is impossible to say I worked on this for "X" number of hours per week; therefore, that is how I will bill you. It may also make the consumer suspicious if they begin to wonder how particular long actions take weekly. I would avoid the hourly billing approach unless you provide one-on-one consulting as part of your service offering.
The retainer that is flat
The flat retainer is the most straightforward of all the cost options. You determine how much a client's labor and time are worth, and you and the client agree on a monthly flat charge. Aside from its ease, it eliminates any friction when it comes to sending out invoices. The client knows exactly how much it will cost them, and if you exceed their expectations, they will gladly pay. If you have a client who scales exponentially over time, this can be a disadvantage.
I recommend including a clause in your contract that ensures that pricing for a set length of time (maybe quarterly), after which you can renegotiate. The primary advantage of a retainer-based approach is that it allows you to anticipate your revenues and see how much you will make if your present clients continue with you for the whole year. This is critical for business growth since it allows you to set goals and plan for setbacks. When it comes to hiring or outsourcing work, this is also a significant consideration.
Spending Percentage
This pricing model is popular among agencies since it considers the client's growth potential and scalability. When agencies achieve a particular level of maturity, they will refuse to work with clients who have little or no prior spending history.
This may not be the ideal option when you are just starting out because you'll want to expand your network, but as time goes on, you will learn that having a more extensive clientele is significantly more helpful to you for various reasons. The disadvantage is that if you opt to run your organization entirely on a % of spend approach, many internal business issues will affect the budget. Some of these aspects (outcome) are under your control, while many others are not (internal decisions, seasonality, other costs). You don't want to end up in a position where your client spends a tiny amount every month, and you only get 10% of that with the expectation of being on the phone and putting in the time.
My advice is to start with a fixed retainer charge, as described above, and then add a percentage of spend model on top of that as your firm expands. This lets the client know that if they want to scale and spend more, you will have to put in more effort to make it happen.
Commission-based
This is one that agencies frequently employ in order to get a competitive advantage over their competitors. They are only compensated when the client generates a profit on a sale.
This sounds appealing because you want to establish trust with a client by demonstrating that you are doing everything possible to assist them in succeeding. People who have had bad experiences with agencies frequently mention how they spent much money with no outcomes or return on investment. For a client who has been burned previously, a gun-for-hire strategy like this can appear appetizing. The disadvantage of this strategy is that billing them will be incredibly tough unless you have extensive knowledge of the client's operations.
This pricing strategy would be a real headache for SaaS enterprises and businesses with complex sales funnels. This is a model I would only recommend for eCommerce or clients selling items directly. That way, you'll be able to assess how many sales you have generated and do the arithmetic. Another disadvantage is that it is highly dependent on the goods being marketed. It makes sense if there is a substantial profit margin. Otherwise, you can be causing yourself undue stress.
Keep it simple is the best piece of advice I can provide. The last thing you want to do at the end of each month is arithmetic equations and not knowing how much money you'll make.
Taxes, liabilities, and the influence of "having a guy for that"
Liability and taxes are two additional crucial components to comprehending the business concept. Suppose you do decide to start an agency, set up an LLC. If something goes wrong, this will provide you with personal legal protection (lawsuits). It also provides you with a slew of tax advantages. I would recommend forming an LLC as soon as feasible because it legitimizes your company in the eyes of both clients and Uncle Sam. Oh, and get a tax preparer.
However, there are so many intricacies to running a business for the average individual that it makes sense to delegate this job to an expert (as your clients are doing with you!). If you are really knowledgeable about taxes, go ahead and do them yourself. Having a professional file your taxes quarterly and assisting you with write-offs can save much money.
Step 5: Identify Your Target Market.
It's easy to get captivated by the promise of working with any company when you're first starting out. When one's livelihood is on the line, the prospect of having to turn down anyone might produce a lot of cognitive dissonances. Having said that, there are tens of thousands of digital marketing businesses and consultants available. Some specialize, although the majority do not.
When engaging new prospects, you will need to stand out and build a unique selling offer unless referrals are flowing like the salmon of Capistrano. There are numerous benefits to focusing your services on a clearly defined niche, aside from the extra value of being specialized within an industry or client type. The following are only a few of the most notable:
It simplifies the onboarding process.
When you take on a new client, there are numerous factors to consider before determining whether or not to do business with them. When you clearly understand who your ideal customer is, the process becomes much easier since you know what questions to ask and what information you need from them. You also understand how these companies operate daily and how much you would charge them on average.
It significantly improves your skillset.
You can essentially run advertising for most firms if you have become adept in digital marketing (explicitly paid). However, you must first understand your target demographic and how to craft effective messaging. When the business is foreign or abstract to what you are used to working with, this can take a long time, leading to problems early on if things are not going well.
If you have a clear notion of who your ideal client is, you will gain a lot of experience dealing with them. This develops the muscle memory and intuition required to know what to do and when to do it. You can work more effectively because you've encountered the issues before and know how to deal with them. It also improves your ability to spot clients with whom you do not want to do business.
It provides you a leg up on the competition.
As I previously stated, there are many folks out there slinging advertising and calling people names. The internet has allowed even the most heinous of hackers to succeed. Because there are so many low-quality agencies out there, it gives the client much peace of mind to know that your company caters to people who are just like them. Being the "insert specialty here" agency provides you with the social evidence and knowledge to boldly speak to the demands of these people and their businesses. It adds an extra element of trust and relatability to your brand, typically lacking in this business.
Step 6: Decide How You Want to Scale.
When you tell people you are planning to start your own agency or consulting, they automatically assume you will rent an office space and recruit several people. That is almost always the worst option you can make. If you are like the other 99 percent of the population, you probably have bills to pay. If you want to get started and grow, you must first ensure that you can subsist independently.
It's critical to be very talented at what the agency does first when developing a successful agency. Managing the accounts for some time allows you to improve these talents, but it also makes obtaining competent help much easier because you know what skills and expertise are required for the job.
It would be best if you also comprehended the financial implications of that assistance. What is your churn rate for clients? What is the average lifetime value of a customer? How do you find new customers? Hiring an employee will add even another layer of complexity to the equation.
It is a very different affair to persuade someone to work for you. Employees work because they want to be safe. So, unless you can provide them with perks and a competitive salary, they will not be interested in taking on the job. The most cost-effective solution to this problem is simple: Locate contractors.
There are a plethora of talented individuals willing and able to assist you on a contract basis. You do not have to give these workers with benefits, and they are a simple tax write-off. When you are focused on growing your business, assigning repetitive or time-consuming duties to a trustworthy contractor takes a great weight off your shoulders. If things go well and they have previously demonstrated their expertise to you, the contractors may elect to join you full-time. This strategy enables you to grow to the point where full-time personnel is necessary.
All of my advice originates from the experience of founding an agency on your own. When you have a partner or two who want to do it with you, things change dramatically. As a result, revenues will be split, and you will need to either charge higher rates or take on more clients to make it mutually beneficial to the point where it is better than working a regular job—just something to think about.
In today's world of startups, there is a perception that rapid expansion is the only way to be successful. When it comes to taking on more clients, there is much pressure, and you may find that you may be financially pleased with a particular amount of exceptional clients. You might eventually conclude that quick expansion isn't the most excellent option for you. Unless you have outside investors on your tail, the ability to live a financially stable (if not better) life on your own terms may appeal to you more.
Running a sustainable agency on your own also gives you the flexibility to close it down quickly and on your own terms if you need to (no layoffs, no office to sublet, no 45-pound bag of coffee beans). You might also discover that owning an agency is not something you want to do for the rest of your life. You can use it to invest in alternative business concepts that you are more enthusiastic about but will take longer to establish. Running your own firm for some time will provide you with invaluable business experience and allow you to form vital partnerships that you can rely on in the future.
My Business Plan for This Business Niche.
I plan to start my own digital marketing agency as one of my other businesses from my portfolio. The reason for this is because I have much passion for building websites. In addition, I gained much experience in the digital marketing field while building my other businesses, such as my dad's yacht charter business, online e-commerce, a financial media website, and this blog you are reading right now. Building this digital marketing agency business can synergize with the other businesses I am already running. For example, I can utilize the team to help with jobs for my other businesses. This results in me having an efficient overhead cost for hiring a team of my own.
I am looking for a partner who is interested in starting this digital marketing business. Preferably, I am looking for a partner who has valuable skills as well as some starting capital. As for now, I am currently working all by myself. I am currently still learning new skills so that I can create more things by myself. One example of something new I am learning at the moment is to create websites using WordPress Engine. I used Blogspot Platform for the other websites I made; however, I find it very difficult to make much more complex websites. I am going to create a dedicated company profile website for this business. But in the meantime, my next project is to build a yacht online brokerage website for my dad.
For my marketing strategy, I will target the market in Indonesia and the United States as well. I believe utilizing websites such as craigslist.org can help me market my business overseas. I have to coordinate a strategy so that I can work with clients in the US. I have to find someone who lives in the US to help me manage and service clients with my services. I am going to handle business management in Indonesia. I have the advantage of forming a team in my country since hiring workers in Indonesia is much cheaper than in foreign countries. If I can capture the US market from Indonesia, I can make US foreign currency while operating the business from my country while having a low overhead cost.
If you are interested in working with me, please DM me on Instagram (@Hansen_Bun) or WhatsApp me at (+62 878 7457 8424). I am always open to anyone interested in working together with me.
Final Thoughts
You now have the same strategy that Eric Siu used to transform Single Grain from a loss-making business to a multimillion-dollar firm that works with dream clients. As for now, I am also just starting the process of building this new business. There are many things I have to do at the moment, and I will slowly work on them.
Creating this business from scratch is not an easy task. According to Neil and Eric, it takes an average of three years to create a firm, so get started now! You will hit many roadblocks along the way, but if you stick to these tried-and-true steps, you'll get there.
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