We all have the image in our heads of what it’s like to start a marketing agency. The modern-day Mad Men.
It’s an appealing lifestyle and for good reason. Being an agency owner can be a blast. Some of the best times of my life were in the office of Stodzy. We would work hard, create amazing websites, build beautiful campaigns and have baller Christmas parties.
But it wasn’t all fun and games.
Running a marketing agency comes with a lot of stress. Client services is an unforgiving world. It is a world full of “what have you done for me lately?”
Business owners are paying you their hard earned money to produce a result on a consistent basis. So if you are working with clients, the pressure is always on.
I’ve done the dance. I’ve enjoyed the life of building an agency. I have some insight that most people starting out will not have. After 8 years of being the CEO of Stodzy Internet Marketing, I have some thoughts and advice for anyone who thinks that starting their own marketing agency is the route the way to take in life.
Let’s do it.
Hire a Sales Rep
The most important person in your company is your sales rep. If you want to start a marketing agency, you must approach the challenge knowing that sales are always your top priority.
Who is bring in the cash?
Money and cash flow are the most important metric of your business. I find it very disturbing when business owners (especially young ones) don’t have a good handle on their cash flow, their expenses, their payroll, their rent and the overall lifeblood of their business.
Running an agency is like running up a down escalator. As soon as you stop moving forward, you go backward.
If you are a good sales person, then your sole priority as the business owner needs to be bringing in new business.
What does that look like?
- are you going to focus on inbound marketing through local SEO?
- are you going to make outbound calls?
- are you going to participate in local networking events?
- are you going to run ads?
- HOW ARE YOU GOING TO MAKE MONEY?!!
Don’t get yourself underwater because you were too nieve or too prideful to ask for help. If you know of someone who could be a good potential partner and could be a driving force of new business, I would even entertain giving him/her equity in your business or a rip off of top-line revenue.
It’s that important.
Remember, without sales you don’t have a business, you have a hobby.
Your People Are Your Biggest Asset
When I set off to start a marketing agency, I made more mistakes than I thought possible. I had no experience, no money, no relationships, and no plan.
How did I go from being completely clueless to having a 7 figure organization with 12 employees?
One of the biggest reasons for Stodzy’s long term success was that we always treated our people and our team like they were the most important asset we have.
Your fancy tools and your “secret strategies” and your amazing Facebook marketing tactics aren’t worth anything if the people who work for you aren’t passionate about being there.
I’ve seen dozens of agencies corrode themselves from the inside out because of bad leadership and culture. It’s always because the CEO didn’t know the value of the people that worked for him/her.
It’s so easy to look at payroll every month and cringe. It’s so easy to tell yourself that you could “find someone cheaper” or you could outsource this. But if you do that, you are destroying the only thing that makes you unique.
Marketing agencies aren’t all that different from each other. Yeah, there are varying levels of talent and many different types of tactics but at the end of the day, an agency is about driving traffic to a website and converting that traffic into revenue for the clients. They all share the same purpose.
Most of the time, your clients won’t even understand what you’re doing. To them, you aren’t much different than the other ten thousand marketing agencies they’ve been approached by. They are in it for the end result.
The only differentiating factor between you and every other company out there is your people, your culture, your service, and your process.
People are the center of it all. Your success as an agency is dependent on your ability to find good people and hold on to them for dear life.
No one has ever quit Stodzy. Not once. We’ve only ever had to fire 3 people in 8 years in business.
If you want to know if an agency is successful, ask what the turnover rate of employees is. If it’s high, they are not a good agency. If it’s low, it’s because they are a family.
When you start a marketing agency, make sure you decide ahead of time that you are going to value your people most.
Find a Niche
The best marketing agencies are specialists.
Stodzy found a lane. We found an angle. We were the premier marketing agency for treatment centers. Most likely, we were the biggest agency in the country who worked within our industry.
We didn’t have to compete with everyone, we only had to compete with a small amount of companies. We were the best agency in our field, so business came to us.
Everyone in the world wants to start a marketing agency. You don’t want to be like everyone else, you want to be special. You don’t want to be a jack. You want to a master.
Finding a niche is the difference between telling a potential client what you charge and having a prospect call you saying that they are “shopping around.”
If someone calls you to shop around, you want to be able to tell them to keep shopping. You want to able to confidently say that “we are the cheapest option, we are the best option.”
The only way you can do that is if you have relative ownership over a niche.
What is your niche? What is an industry that you know about? What is something that you are passionate about? You should focus on that, you should make that your differentiator between you and everyone else.
I promise you, there is an opportunity in that angle to build a marketing company. It could be anywhere from baseball cards to video games to stem cells.
Avoid being just another agency, avoid it like the plague. Be the best at one thing.
What’s the Long Game?
I feel very lucky and blessed for the experience of starting a marketing agency and turning it into a thriving company.
Over the years, I have learned an interesting lesson. If there is one thing you get out of this article, I hope you will take this next advice very seriously!
The real value of owning a successful marketing agency is that over time, you can use the profits of your company to start independent projects of your own and use the resource of the your team to build other companies.
Here’s the reality. Agencies are hard to scale, it’s stressful work and it probably isn’t going to make you a millionaire. But, if you consider the fact that the agency model provides cash and profits that could be reinvested into other media/e-commerce or lead generation businesses, you then have a truly scalable model that is vertically integrated.
Your agency can be the driving force for your other businesses. You can then structure your profit and loss sheet in a way that allows you to invest in yourself without every dipping into your savings.
THE BEST decision we made at Stodzy was deciding that we were more than a client services company. Stodzy became the nucleus of many lead gen, product sites and partnership opportunities over the last 6 years.
The real value of starting an agency is not in the agency business itself, it’s what you can do with your team!
I would recommend anyone try to start as an agency model. You will learn so much.
Stodzy taught me how to work with clients, how to sell with integrity, how to manage expectations, people and personalities. It taught me how to own and operate a multi-million dollar business. I’m so proud of that part of my life.
In the end, the experience has been much more valuable then the money I made. Isn’t that always the case?
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