How to Start a Business (specifically a Digital Marketing Agency)
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So you want to start a digital marketing agency? Assuming you took our courses or you have marketing skills already… the first step to starting a Social Media Marketing agency or any advertising agency is getting your FIRST client. When starting out with your new advertising business, if you don’t have any former clients that will act as a reference for you, you will be hard-pressed to expect a new client to just hand over money to you! So you will need to GET CREATIVE to get that first client and coveted “case study”! But first things first, you need properly set up your business.
How to Start a Business
Many of our students overlook the “business” part and want to jump into the “fun” stuff like selling and working with customers. But, you need to conduct some research and do some planning before jumping in headfirst. So, how do you start a business then?
Research your competitors and speak with potential customers. Your goal is to use this info to find a competitive edge for your business. Is there an opportunity and enough demand for your business idea? Is there a void in the market you can fill?
Business Idea Generation
Watch this video to get the business idea juices flowing: https://learn.coursenvy.com/courses/modmba/lectures/14021489
Your business plan is the “roadmap” for how to run and grow your business. This can include:
Executive Summary: A brief description of your business (include what problem you solve). What value proposition does this business provide? What key features of your business make it unique?
Mission Statement — EXAMPLE: Tesla’s mission statement: “To accelerate the world’s transition to sustainable energy.”
Market Analysis: Research your competition, how will your business differentiate, market size, trends/data about market growth, target customer, what products and/or services will you offer, etc.
Check out these resources for Business Plan examples: https://www.bplans.com/sample-business-plans
Build your business pitch deck using PowerPoint or Google Slides! There is no wrong or right way to build your pitch deck. A pitch deck is basically a visual presentation of your business plan.
What do Apple, Airbnb, Dropbox, Zappos, and Google all have in common? Sequoia Capital has invested in all of them!
Want to add your startup’s name to that list? Follow “Sequoia Capital’s Pitch Deck Structure” to see what they look for when you pitch them: https://www.sequoiacap.com/article/writing-a-business-plan
No matter what your business is, you will need capital to get the ball rolling. This includes marketing, employees, operational costs, etc. etc. Creating your business plan will help you estimate and factor costs appropriately.
Your best bet is to bootstrap your business with your own cash as long as you can. While working on a shoestring budget, you should also allocate 30-60 minutes per day to pitching investors, venture capitalists, and entering pitch competitions, such as: https://learn.coursenvy.com/p/startup-pitch-competition
While working on the business is important, getting money to fund growth and keep the lights on is equally important!
I am not a CPA. I am not a lawyer. So you should hire a local professional to help you decide on your perfect business structure. This is a HUGE decision that can affect your tax bill, personal liability, and income for years to come! That said, DISCLAIMER — NOT FINANCIAL ADVICE, our tax accountant helped us set up our business as an LLC – S Corp and use Gusto.com for payroll.
Our accountant also helped us set up our employer identification number (EIN), which is required for opening a business bank account and paying business taxes.
Apply for an Employer Identification Number (EIN) Online: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
Also, speak with a business lawyer about applying for licenses and permits. They will know what you need for your business (which varies by industry, state, and other factors).
Finally, contact local business insurance companies to get quotes for insuring your business.
How to Select a Business Name
Grab a piece of paper and write down 5-10 potential business names.
Research Google for your business names. Is someone else using your business name already? Is the “.com” website available? Are the social media handles available? I use https://namechk.com
And make sure to check that there is NOT a LIVE trademark on the United States Patent and Trademark Office website for your brand name: https://www.uspto.gov/trademarks/search (click the “Search our trademark database (TESS)” button)
Make sure to secure your FREE Domain Name at: https://www.coursenvy.com/free-domain
How to Start a Business Course Bundle
We cover this all more in-depth in our “How to Start a Business” course bundle, the modMBA.com
How to Start a Digital Marketing Agency + Get Marketing Clients
To get initial clients for your digital marketing agency, you will need to prove your worth! The easiest way to do this is working for free (or on commission only) in order to build out some case studies and work examples. Without a case study, nobody is gonna shell out thousands of dollars for your ad agency payment. You will need to work for one client for free or create your own brand to use as a case study.
Have a look at our digital ad agency sales page: https://learn.coursenvy.com/p/coursenvy-marketing-ad-agency-packages (the key is to screenshot and document EVERY piece of data, KPI, metric, etc. you can for your case study)
We include endless case studies to PROVE OUR WORTH to potential clients viewing our page! You need to do the same. Sure you have marketing skills, but potential clients NEED examples to make them feel confident paying you.
Approach business owners in your niche (i.e. chiropractors) and make them an offer THEY WOULD BE DUMB TO TURN DOWN. Such as, “Hey chiropractor, I am a recent graduate of a top marketing program, but I need a case study to launch my ad agency. I would love to prove my worth to you by getting you 10 new clients. I will manage all the ads and ad costs. What do you think?” Once they reply yes, then you confirm the terms, such as, “Great, thank you! So in exchange for the 10 new clients, I will need a written and filmed review from you, ONLY if you are 100% satisfied. Sounds good?” Never ask for too much. Provide the value and I promise you, they will pay you to keep doing what you are doing!
How We Get Clients for our Social Media Marketing Agency
Here are some ideas for obtaining your first clients:
-Work local! Go door to door offering your services. Meeting in-person to pitch your services helps people not feel like they are getting a spam email from you. Plus, working a local market usually equals easier targeting via Facebook ads since you just have a single market.
-Contact higher-income businesses (attorneys, doctors, accountants, contractors, restaurants, etc.) that have enough income to have an ad spend budget available.
-Solve their problem with some FREE work! EXAMPLE: Capture 1-2 leads with your own ad spend for XYZ client, then offer the leads for “free” in exchange for future work!
-Offer a free month (or XX% off) to your current clients for new referrals! Word of mouth wins when it comes to marketing an ad agency!
Best Pitch Email
While cold email marketing has the LOWEST return on investment for most digital marketing agency owners, the key is to PERSONALIZE the email so the recipient doesn’t feel like 1 of 10 million people that received this SPAM.
#1 – Find the user’s CORRECT name and email. I love using LinkedIn, RocketReach, and Hunter.io for email research.
#2 – Find something PERSONAL about this person. Typically find something you have in common with them or an accomplishment of theirs you find via social media or find something you can COMPLIMENT the person on (everybody loves a compliment). For example, I will find what college the user went to on LinkedIn and comment on that in the first sentence of the cold email. For example, Hi FirstName, I saw you were on the University of Miami football team?! That is the coolest, I love the Hurricanes. So quick question for you… PITCH EMAIL…
Check out this “Best Pitch Email” HubSpot received: https://blog.hubspot.com/marketing/best-guest-post-pitch-example
So this is a great pitch email because first of all, it is not generic “Hello I am a marketer, give me your money”. It is personal, direct, and short! Also, this pitch shows that Bryan researched this business and knows about their recent blog posts or news. This marketer then gives a soft pitch and example of his own past work and then gives this potential client an example of what he would do for them to help improve their weaknesses. This is FREE work he did to prove his worth!
How to Set Pricing for Marketing and How to Charge for Ad Agency Services
This totally depends! What is your desired hourly price? How many employees do you have? ALWAYS have 20-40% margin left after all expenses are paid! This equals NET INCOME / REVENUE x 100 …for example, $200 left after all expenses / $1000 retainer x 100 = 20% margin!
Once you start to get referrals from clients and have a nice base of work, you can begin to demand more money. You can also charge for your varying added services or just bundle it all into one price!
Some ad agencies charge an upfront setup fee and then a monthly retainer (i.e. recurring charge), while some charge a percentage of the ad spend budget they are managing. Others work commission-only at 10-20% or a fixed rate per sale (e.g. we charge $1000 per solar installation we book for a contractor client).
-Ad Agency #1 — $500 landing page setup fee (i.e. ClickFunnels, etc.) + $1500 monthly retainer as a fee thereafter + fees for each additional service (i.e. SEO, web dev, etc.)
-Ad Agency #2 — $20% of the ad spend budget (so if the client’s ad spend increases, your monthly fee goes up)
-Ad Agency #3 — Profit share! The client pays you $100 CPA (cost per action). So you earn $100 per sale, but you run the ads and ad spend so well you drive sales for just $40 per sale… and you make $60!
We prefer a BUNDLE retainer pricing approach as we can include the cost of all our employees, plus ongoing asset work for a flat monthly rate. From our experience, customers appreciate a stable rate and us being upfront about no later “upsells”, like our competition. Have a look at our pricing models: https://learn.coursenvy.com/p/coursenvy-marketing-ad-agency-packages
Research the Competition
Research your social media marketing agency competition and decide what is right for you! One easy thing to do is just contact a local marketer or ad agency in your market and act like a business seeking the specific niche of marketing you’re doing and see what they charge.
Once you get a few quotes and pricing packages, you can just undercut them slightly on price OR add a service to justify your higher price! The options and variations are endless!
But you will begin to see a theme… the going marketing agency rate is near that 20% of the ad budget or $2000 per month retainers.
Outsource Your Work
The worst thing you can do is run your entire ad agency all by yourself. You need to ASSUME you will only grow as a business and have a plan in place for scaling your clients and team members. You only have so many hours in the week, so you will eventually need to hire help!
Here are my two strategies for new agencies:
#1 – Outsource your agency completely to an experienced agency (like us at Coursenvy), but then just add your desired fee on top. EXAMPLE: You find a client interested in having you run their Facebook ads. You charge them $2,250 per month and outsource everything to us for $2,000. You do nothing and make $250 per month. Or just contact us about becoming a referral partner and we’ll give you 20% of any client you bring us for the life of the client (email us: email@example.com)
#2 – Manage everything yourself for your first 2 clients. All the while, create SOPs (Standard Operating Procedures) that you can use as a step-by-step guide for training social media savvy freelancers you hire on Upwork.com by the time you land your 3rd client!
The Ultimate Guide to Outsourcing Work and Hiring a Virtual Assistant: https://www.coursenvy.com/the-ultimate-guide-to-outsourcing-work-and-hiring-a-virtual-assistant
Digital Marketing Agency Agreements
Marketing Agency Client Proposals, Contracts, and More: https://www.coursenvy.com/marketing-client-proposal-contract
How to Start a Digital Marketing Agency
To continue learning more about “How to Start a Social Media Marketing Agency” enroll in our How to Start a Marketing Ad Agency course included in our modMBA course bundle: modMBA.com