How to start and build a digital marketing agency that makes money

Your guide to agency success

So, you’ve decided to take the plunge into the world of agency life — congrats!

As you surely already know, starting (and growing) a marketing agency can be a long, painful, exhausting — yet rewarding — process. From registering your LLC to finding your first clients, there will be many hoops to jump through.

That’s why we’ve put together this ultimate guide to help! 💪

Below, you’ll find helpful tips, advice and resources on how to successfully start and grow your marketing agency. And if you’re someone who has “been there,” let us know in the comments if you have any other wisdom to share.

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Part 1: Getting started & promotion

The basics

Should your agency go broad or niche?

One of the first things you should consider when starting your own marketing agency is what exactly you want to offer your clients. 🤔

Much like when product companies are trying to find a market fit for their product, you need to find the market fit for your services.

And while there are many full-service agencies out there who create great work across a variety of disciplines, it’s important to consider the option of being a bit more niche when first starting out.

Why? Because if you can show clients that you can do a few things really well, rather than everything only at half capacity, you’re a much more valuable asset to them. And let’s be honest: if it’s just you, or a small team, working for your agency, the last thing you want to do is stretch yourself too thin from the beginning. 👎

guy saying, 'i'm great at everything i do'

Are you great at SEO? Web design? Social media promotions? It’s best to sit down and list the services you’d like to offer, then really think about whether or not those services are your best assets.

Knowing your expertise early on can really help in the long run. 🙌 Plus, when work starts to pile up, it’ll give you a better idea of what tasks you can pay independent contractors for. Ideally, it’s good to keep your core expertise in-house. But for other supplementary tasks, you might want to consider outsourcing.

Companies can sometimes worry about being too niche and missing out on clients, but think about it this way: if you offer a few really great services, you’re going to have clients who need those services and, in turn, you’ll be doing work you actually want to be doing (plus, it’s work that you’re great at).

“Top of the food chain” or subcontractor

Another thing to consider in the beginning is to whom you’d like to offer your services, and how.

Are you interested in working with end-clients directly, or do you want to contract out your services to other companies that want to carry out specific projects? 🤷‍

Deciding this early on will help cut down on confusion in where your agency stands in the “food chain,” so to speak, of the companies you work with. Plus, it helps you better prepare for the types of clients you want to look for when prospecting.

For instance, if you’re not going to be working with end clients directly, it’s better to prospect with big agencies that don’t have your specific expertise in-house.

Branding and identity

As a marketer yourself, this is probably a no-brainer: you need a brand! 😅

But to be fair, this can sometimes be easier said than done. Especially in the beginning when you have a million other things to be worrying about with your business, your branding can sometimes fall to the wayside.

cat pushing chair saying, 'can't talk now'

It can be tempting to focus more on your clients’ branding than your own, but try to avoid this. 🙅‍

You’d never go to a hairdresser with bad hair or a dentist with bad teeth — so why would someone hire your marketing services if you don’t market yourself well?

It’s important to make a name for yourself in your respective field, and having a brand that is easily identifiable and tells the story you want to tell. 🤘

Column Five has a great step-by-step guide on brand identity for tackling this head-on.

Website and social media presence

Probably another no-brainer, but equally important, is your online presence. Once you have defined a brand identity, made a great logo, and logo design it’s time to show it off! ✨

If you aren’t necessarily ready to invest in a web developer to build your website, there are a few great low-cost self-publishing options, such as Squarespace. Another good alternative is Pixpa. Sites built with Pixpa have a host of built in tools like the SEO Manager, Marketing Pop Ups, Announcement Bar, etc.

For social media, be sure to secure your usernames and, if possible, make them consistent across channels. It doesn’t make sense to have your Twitter account as @Marketing_Agency_Example if your Instagram is @example.marketingagency — you get the idea. 🤓

Also, this is a great opportunity to already start to build a following. Once you determine the channels that are right for you and your agency builds a digital marketing plan, start interacting with other accounts!

betty white saying she also has facebook and twitter

Follow relevant thought leaders in your industry on Twitter, join Facebook groups with like-minded people, do everything you can to be part of the conversation. Make sure your website and other channels have good speed, you can use performance boosters like VDS servers for that!

Finally, don’t forget to make yourself visible to people searching. Add yourself to different, targeted listings like this one for marketing agencies in Pittsburgh.

Show off your portfolio

Your past work can help demonstrate to prospective clients that you’re capable of creating great things.

Be sure to highlight your best work from your portfolio across your website and social media channels — though, don’t make your social media channels completely self-promotional. Conversations aren’t one-sided, and that goes for social media as well. 🗣

What works even better nowadays for agencies is to blog about their expertise and give their advice and opinions on things. It’s also perceived as less promotional — more on this in a moment.


The not-so-basic basics

Set SMART goals

It can be one thing to say, “I want to build a successful company,” it’s another thing entirely to say, “I will sell my marketing services to financial services clients needing help with email campaigns. I will launch in 6 weeks and have 8 clients by the end of the year…”

Goals need to be tangible, and one way to ensure this is by setting SMART goals.

SMART goals are Specific, Measurable, Achievable, Relevant and Time-Bound.

Creating goals in this format allows you to really dive deep into what you want to achieve with your agency. It can also help you become more disciplined with your deadlines for hitting milestones.

smart thinking

Building your toolkit

There are plenty of tools out there to help you run your business in an efficient and productive way. Below are some suggestions for various SaaS tools. 🔧

kermit typing furiously

Social media scheduling

· Sprout — a personal favorite of mine. Schedule, plan and track all of your social posts across every channel. The reporting tool is visual, easy to use and incredibly helpful for seeing which of your posts are performing best.

· Buffer — if you’re looking for a free tool, this one is great. Schedule and plan with ease.

· Hootsuite — a longtime fan favorite, as you can have multiple feeds visible on your dashboard at once. 🦉

Accounting & invoicing

· FreshBooks — cloud-based accounting software, easy and intuitive.

· Xero — small-business accounting software that takes care of everything around invoicing, billing and accounting.

CRM

· Salesflare — surprise, surprise! Imagine loving your CRM: Salesflare is built to be the easiest-to-use sales machine of your dreams. 😍

Project management

· Airtable — it works like a spreadsheet but gives you the power of a database to organize anything.

· Notion — another personal favorite. Write, plan, collaborate and get organized with one tool. 🙏

· Trello — boards, lists and cards enable you to organize and prioritize your projects in a fun, flexible and rewarding way.

· Function Point — Manage your entire creative agency on a single software platform with functionalities that simplify project management, resource management, business intelligence, CRM & estimating, and agency financials.

· RedTrack – ad tracking & attribution tool for agencies and vendors. Track and compare the performance of your paid advertising, partner marketing, referrals, email campaigns, etc. – all in one tool for better optimization.

Chrome extensions

There are some great Chrome extensions out there, some of our favorites include Grammarly and Dux-Soup.

We created a guide to the best Chrome extensions out there — check them out and see if you can implement them into your everyday work. 💪

Find a co-founder?

While not a requirement, it might be worthwhile to have a co-founder come on board. 👯‍

Some of the top marketing and advertising agencies came from duos. Think: Ogilvy & Mather, Wieden+Kennedy, etc.

two guys high-fiving

You can have someone there who is going through the trenches with you, and will be there to further help and motivate you and your growing team.

Not always necessary, but always worth considering!

Inbound vs. outbound marketing

I’m not going to get into the difference between inbound and outbound, because if you’re starting an agency, let’s assume you already know this stuff… 😉

But in any case, it’s important to plan how you want to go about bringing clients in at the beginning (and further down the line).

guy telling his wife how he's going to advertise by putting a big waving man outside

The best thing you can probably do is a mix of both — but definitely more inbound than outbound. Though, at the beginning, you will probably find yourself doing much more outbound.

Regardless, you don’t want to be too pushy to prospects, and you should want future clients to find you on their own or through word of mouth.

Throughout part two of this guide, you’ll see various examples of using both inbound and outbound marketing to build your business.


Part 2: Time to grow

Now that you’ve started your marketing agency, you need some clients so you can start to grow! 📈

This section will go over some of the different ways to find business, as well as advice on how to cultivate a healthy business model that is sustainable.

Finding your future clients

Utilizing your current network

Even if your network isn’t huge, it’s important to talk to friends, family and peers to get an idea of some of the pain points their companies have with marketing.

Invite them to coffee or lunch, and ask them about marketing at their company and some of the things that they feel stuck or frustrated with. 😤

Be sure to not try to sell your services right away. Listen. And understand first.

Even if they aren’t looking to hire a marketing agency at the moment, you can gain incredible insights and be top-of-mind for them whenever they do feel they need some extra help with marketing — and they might know of other people who could use your services.

little kid saying, "let me, help you"

Outbound email campaigns

There are several outbound emailing tools out there, from Mailshake to MixMax to Autoklose. Or just send email workflows/sequences straight from your CRM, Salesflare. 📬

Pick one that works best for you, and then check out our guide to handling email automation like a pro.

Do some basic SEO research

Research keywords that you want to associate with your agency — what kind of companies show up in the results? What are their pain points? Are they a good fit as prospects?

Even if you aren’t an SEO whiz, you can learn as you go along, and eventually apply your knowledge to future clients’ projects! 😄

woman pointing at the camera

And even outside of looking for clients, while you don’t need to be an SEO master to start a marketing agency, understanding the basics and why certain things drive certain results can go a long way.

Join groups — both online and IRL

Finding groups with common interests is not only a great way to make friends, but it can also be a great way to make potential business contacts. 🤝

This can apply to several things — Facebook Groups, Quora and Product Hunt are a few that immediately come to mind for online networking. 😻

There are even some agencies out there that have created groups for their niche, such as Badass Marketers & Founders (BAMF), SaaS Growth Hacks and more.

When it comes to networking IRL, check out local groups on Meetup or see if there are any interesting events coming up on Eventbrite. You never know what you might find — or who you might end up meeting!

bear waving friendly

Industry conferences can also be a great place to prospect. You’ll have to do a bit of research and legwork to ensure the companies attending are a good fit as potential clients, but this can be incredibly rewarding if done right.

LinkedIn

If you’re looking for leads, LinkedIn is the place to be. It’s easily the biggest and most up-to-date list of leads in the world.

We actually created a super-helpful playbook all about how to find customers on LinkedIn — so be sure to check it out! Because, trust me, this can be a treasure trove of potential new clients. 💎

Blogging

Starting a blog for your company can be the most valuable inbound marketing you can create — if done well. 😎

And if you need further convincing, here’s the deal: companies that blog have, on average, 97% more inbound links than those that don’t. Which means more search engine traffic and more opportunities for future clients to find you online.

But there’s more: 60% of consumers feel positive about a company after reading its blog and 70% of consumers learn about a company through its blog versus ads.

So, why wouldn’t you blog? 😱

kid jamming at the computer

Think about topics and pain points that you are trying to address with your clients. Create pillar pages, give advice, give resources, show prospects that you are a thought leader in this space and that they can trust you.

There are also amazing tools out there that can make your content marketing workflow even better, such as StoryChief. It helps you plan, schedule and distribute multi-channel with one click. 👍

Warm (and maybe a few cold) emails

If at all possible, try to warm up to contacting prospects directly. 🔥

And you can keep it simple: perhaps they have a great post on LinkedIn that you comment on, or you retweet something from their account with some insightful commentary.

Even better: you meet them at an event and follow up soon after. Or, you check out job postings and see if they are looking for specific marketing help.

However you decide to approach this, do it in a thoughtful and strategic way. If you’re just mass-emailing every company you want to work with, that’s not a great use of your time, and you probably won’t get any responses. 👎

You’re trying to build a relationship with these companies, so approach it in the same way you would want to be approached — in a more organic, thoughtful way. 💛

guy asking, 'hey, how are ya?'

Cold emails don’t have to be bad or annoying, it can certainly be done well, but be sure to not send them an email saying how great you are and how much they should want to work with you.

Ew, no one wants that. ☹️

Instead, discuss some pain points they might be feeling, and ask if you can discuss it further. Get them talking about themselves, rather than excessively talking about your company.


Cultivating a healthy business model

Making your agency profitable and defining your rates

There are tons of ways to maximize your profits as a marketing agency, and this great guide from Marketing Agency Insider is a solid place to start for inspiration.

Essentially, it boils down to what you want to prioritize and how you want to structure your company. Every agency is different, but there are some business models that work better than others.

Tip: one ideal way to maximize profits is to establish value-based pricing, in which you charge clients based on the value of the services rather than the amount of time spent on a project.

Understanding your rates and the value you add to clients can help you greatly in the long run. Always know your worth! 🤑

Managing billing

Stay on top of your billing cycles — and make sure your clients pay you when they should be paying you. 💸

Seems obvious, yes, but when you’re hard at work trying to make clients happy, the weeks can fly by and you’re left forgetting whether or not you got paid — and 99% of the time, your clients won’t remind you about it, either.

rihanna signing money

A CRM is a great way to track won and billed projects, but for invoicing, accounting, etc., be sure to have a tool like FreshBooks or Xero in place to keep everything in order. It’s important to be able to have a snapshot of how your company is performing financially. 📊

Revenue targets

Setting the right revenue targets for your company can be a tricky process.

Thankfully, there is a helpful guide over at SOMAmetrics that lays out how you can set effective revenue targets for your agency and beyond. 🎯

Getting this right early on can help an agency grow sustainably and profitably — and you can set these targets in a CRM, such as Salesflare, to track it more effectively.

Billability

Be sure to track your time per client. But equally important: track your non-billable hours as well. ⏳

Things such as new business pitches, writing proposals, networking, admin work, meetings and client research are crucial in keeping your business alive — even though they aren’t directly generating revenue.

In any case, keeping a close eye on how your company spends non-billable time can ensure that you and your team are working in the most efficient way possible. You can get a better idea as to what is taking up your time during the day, and if there is room for improvements to any processes you have in place.

Plus, it can also help you discover and identify any unprofitable clients and find more billable hours in areas that you need more work in. 👩‍💻

Tools such as Timely are great for tracking your time and giving you better insights into what you and your team are spending time on.

woman calculating paperwork invoices

In terms of the agency’s billable utilization, this can vary, though a healthy target is around 70–80% — meaning only 20–30% of you and your team’s time is spent on non-billable tasks. The latter, of course, can be much lower as time goes on, but having a goal or framework in mind is helpful.

Looking for a way to calculate billable hours? Like Timely, Toggl is another great tool for this, as you can assign different rates for different team members or clients. ⏱

Offers

Setting up a common offer structure is a great way to ensure your company is consistent in its pricing. Agency fee structures can be broken down into two main buckets: project-based and retainer-based work.

For project-based work, depending on how much net profit you want to achieve, there are a few factors to consider, such as hourly costs of employees, estimated billable hours and unexpected costs (or scope creep).

calculating math in head

The key here is to calculate those unknown factors and to determine profit margins on services that makes sense for your company — and don’t forget your LLC cost and administrative costs when calculating this! ⚠️

Retainer-based work is a bit trickier to calculate, as there is a lot of front-loaded work associated with it. That’s why you should be sure to have provisions in place in your contracts, such as termination clauses that protect the setup phase and ensure that if the client terminates the contract early, you are compensated correctly.

An example breakdown of an annual pricing structure would be:

  • Setup phase, first 2 months: $20,000
  • Ongoing phase, the other 10 months: $28,000
  • Total: $48,000
  • Amortized into monthly payments: $4,000

So here, your monthly retainer for this client would be $4,000 — this should cover specific, itemized deliverables. And if your client wants more outside of these deliverables, then that would be the time that you negotiate some à la carte price points for their needs.

A good place to start with proposals is Better Proposals’ list of free proposal templates, which you can find here (they integrate with Salesflare, too). 🤘 Another online tool to create business proposals you can check out is this one from Qwilr.

Negotiations

Negotiations can be tricky and a bit awkward when first starting out with your agency. However, that shouldn’t stop you from entering a negotiation with confidence and an open mind.

When it comes to dealing with enterprises, expect at least 5% discounts asked — this is quite common. But never agree to a contract that you don’t feel you can deliver on or you don’t feel confident about. 🤝

It’s all about compromise between you and your future client, but that doesn’t mean you should hand over work for free, either. This is when knowing your worth is crucial — and can help you get to an agreement that both parties can be happy about. 😁

If you feel a future client is trying to nickel and dime you to the point that the contract wouldn’t make sense, try to politely come to a middle ground, and if that isn’t possible, it might be worth reconsidering the agreement.

Leveraging the press

Building a PR campaign can be a great way to get your name out there, and this can be done in a variety of ways. 🗞

For example: you just signed on a major client — great! This can be announced via a press release (it’s even better if it’s a joint press release from their comms team, as it can give the announcement more weight).

guy grabbing everyone's attention to make an announcement

Or, you can use the press as a way to position yourself as a thought leader in your field. Pitching story or column ideas to publications can be a great avenue to free promotion for your company — and it puts you in the spotlight as someone people can trust on certain topics.

A press strategy can take an entire life of its own — and requires a lot of time, resources and relationship building. But if this is something you are interested in pursuing as your agency continues to grow, this guide by Quick Sprout is a good way to get started.


Final Thoughts

Everyone’s path to success in marketing agency life is different, but if you utilize this guide and apply it to your own company, I think you’ll be headed in the right direction. 👊

And I know I just threw a TON of information at you, which is exactly why I compiled all of the guides, resources and tools referenced in this post into one handy listing.

Ta-da! You can find everything right here!

Have any questions or do you think there’s something else we should include in this guide? Let us know in the comments!

patrick star is rooting for you


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Ali Colwell