If you’re curious about how to start your own marketing agency, here’s my first tip: don’t.
I know you’re going to ignore that. In fact, if you’re reading this post, you’ve probably already spent a considerable amount of time forming some ideas about how you’re going to run your own agency. Maybe you already work at an agency and you’re thinking to yourself, “I would do things a little differently.” Or, maybe you’re an in-house marketer that is ready to go out on your own. Maybe you’ve already written your business plan and you’re just waiting for the right moment to pull the trigger.
I’ve been in all of those situations. It’s an exciting feeling.
You don’t know me, so I imagine you’ll probably skim through this article quickly. But, if you’re wondering how to start your own marketing agency, I can promise you I know what I’m talking about. I can say this because I did it and, so far, it has worked out well for me.
My name is Cody Miles. I’m a founder at Brandcave, an inbound marketing agency in Austin, Texas. At the time of writing this, we’re just closing in on two years as an agency. In that time, we’ve experienced a lifetime of change. From landing our first major client to partnership breakups, I could write a book on the mistakes and successes we’ve had in our foundational years of growing an agency.
But, I won’t because there is no time to write a book when you run an agency.
I can tell you that if you intend to get rich or work less by starting your own marketing agency, you’re being naive — and you will fail. Operating a marketing agency is not for the faint of heart. It even put me in the hospital once. Like any startup, launching an agency requires a ton of dedication, many sleepless nights and a strange ability to repeatedly get beat up and then get up again.
So, if you plan on starting your own agency, and I can’t convince you otherwise, at least take these three tips:
1. Focus on Referrals First
We were lucky at Brandcave. Before we made the decision to officially launch, we landed a big fish. If it’s at all within your capability, I’d suggest you do the same. We started with the six degrees of separation principle and worked through the contacts in our personal networks. I was lucky enough to have some relatives who were able to get me into a meeting with the top executives at their company. Our relationship with that client eventually led to client number two.
You’ll learn early in your own career that building an agency has a snowball effect. If you’re extremely good to one client, you will always find that one becomes two. It’s ironic, but most marketing agencies rely on referrals to grow their business. Brandcave has been no different. It’s a case of the cobbler’s children having no shoes. If you’re lucky, you’ll begin receiving RFPs by email at the end of year two. If you’re good, you’ll start generating leads online by the end of year one.
Prior to that point, however, you’ll only be able to grow by referral.
I’m going to say this and it’s going to sound blasphemous: you should do a lot of free work for your first clients.
If you’ve worked at an agency before, you’ve probably become very comfortable with telling clients “That’s out of scope” when they wanted to change the requirements on a project. It was a nice luxury then, but it doesn’t exist when one or two clients are all that exist between you and homelessness.
Now, you could force a client to sign a change request. That would make you more money immediately. But, is it really worth it?
Let’s face it. When your agency launches, you’re going to have a lot of unoccupied time. Realistically speaking, your workload won’t be too heavy during the day and most of your networking events will be at night. You could fill up your extra time by writing web content and building backlinks, but even that won’t fill up your calendar completely. Why not spend that extra time giving your first clients more than they asked/paid for?
Who will it hurt? Certainly not you. You’re an inch away from homelessness as it is. Cushioning your retainer by working extra hard only locks in a little extra security. Forcing your client to fill a change request may lead to an unwanted distaste with your agency. It might even cost you a future referral.
Feel free to disagree with me, but you won’t regret the extra work when your land a new client by referral.
2. Stay in Your Lane
When you first launch your agency, it’ll be tempting to take on just about any client you can get.
But, I can guarantee you: if you do that, you’ll regret it.
Naturally, the team you assemble will have some peculiar strengths. When it was just Mike and I, we were particularly good at producing commercials and SEO. We took on every client that walked through the door — from a duplicitous author to a macaron baker — and, in the end, nobody was happy.
The clients weren’t happy because we didn’t understand their industry well enough. We weren’t happy because we were working in industries that were utterly unfamiliar to us.
It’s kind of like ordering a hamburger at a Mexican restaurant.
If you ask for it, most Mexican restaurants will serve you a hamburger. They’ll do it, but it won’t feel right to you or anyone there.Their specialties are traditional Mexican dishes, after all. if you’re really fiending for a burger, you know in your heart that you shouldn’t go to a Mexican restaurant.
In the same way, why would you promote services that your agency isn’t best suited to deliver?
If you’re smart, you’ll think of your agency the same way a Mexican restaurant thinks of enchiladas. You’ll carve out a niche and stick to it. It’ll be the reason people come see you. If your group is particularly keen on developing smart social media strategies for B2C clients, for example, be a social media agency. They exist. Ask my friend Robynne at Social Distillery.
If you’re Brandcave, you’ll exist primarily to produce inbound marketing campaigns for B2B technology clients. If any other client walks through the door, we’ll tell them they’re ordering a hamburger from a Mexican restaurant. Staying in your own lane is the key to staying productive and happy.
3. Have an Exit Strategy
I mentioned earlier that starting a marketing agency won’t make you rich. You probably still don’t believe me and that’s ok. But one thing you should understand is:
You’re in the services industry.
That means, the day you stop working is the day you stop getting paid. And, no matter how big your agency grows, your presence in it will always be required. You’re laughing now, I know. Email me when you prove me wrong.
Whether I’m right or wrong, however, it’s important to know how your agency will end. Because, it will. Either you can decide how it’s going to end or you can let fate and circumstance dictate it. But, nothing lasts forever — especially marketing agencies.
The exit strategy is up to you. You might decide to sell off your company or have it absorbed by a larger agency. But, here’s the great thing about wanting to sell your agency: it creates a clear business objective that focuses your mind on building value for an eventual sell.
Brandcave is taking a little different strategy. We’ve transitioning to software. We’re building a product called Ashore that will dramatically improve the way teams and creatives send, track and manage the approval process for digital deliverables. We’re excited about this next step, and we’re thankful to have made it this far.