How to Start a Digital Marketing Agency

True entrepreneurs never forget the moment they decide to start their own business—especially if that business is a digital marketing agency.

Starting fresh is frightening for most professionals, but you know you’ve got what it takes. 

To help you out, we’ve written this insightful guide that’s going to take you step by step and help you open your dream agency. 

Types of Digital Marketing Agencies 

Before we go into the steps to opening a digital marketing agency,, it’s important to note that there are several types of them. 

There are two major distinctions you need to understand.

First, there are full-service digital marketing agencies. They offer an all-around service to their clients. 

Such agencies handle all the marketing duties that a client would need to promote their business. 

They specialize in stretching the resources across multiple different marketing outlets so businesses can build a presence on every platform before focusing on the most suitable one. 

Consider full-service agencies as the marketing industry’s jack-of-all-trades. 

The second type is specialized digital marketing agencies. 

When agencies choose to specialize, they focus on one specific marketing outlet along with a handful of those that closely complement it. 

Here’s an example of a marketing agency that specializes in the healthcare niche.

Unlike full-service agencies, specialized agencies foster business growth on the platform that fits the specific marketing needs of a client best, i.e. the one that promises the best results. 

You’ve probably seen your fair share of both types, but to get more context, we’ll name some specialized varieties:

• Social media agencies
• SEO agencies
• Instagram influencer agencies 
• Content Marketing agencies
• AdWords/PPC consultancies

Now that you understand the distinction between different digital marketing agency types, you can start working towards opening one. 

Steps for Starting Your Own Digital Marketing Agency 

Setting up your own digital marketing agency isn’t a walk in the park, but it’s well worth the effort.

Follow these steps, and you’ll have a roadmap for opening your own business—and take an important step towards building a powerful career in the buzzing world of digital marketing.

Without further ado, let’s talk about picking the type of agency you want to open.

1. Pick Your Digital Marketing Agency Type 

Deciding whether to offer all-around or specialized marketing services in your agency is your first major business decision. 

It’s incredibly important you make a choice early on and stick to it, and here’s why.

Without deciding on a course, your digital marketing agency will wander aimlessly between the two types. 

For a business to succeed, it has to chart a direction and align all its goals towards it. 

Since specialized and all-purpose agencies have different approaches to skill growth, failing to define which direction you want to develop in will make things substantially harder for your agency. 

It also makes external processes difficult, which begs the next point.

The type of agency you opt for will affect the way you engage with potential clients. 

Not every potential client is looking for specialized services—while others don’t need you to tackle their entire marketing strategy. 

Whichever type you choose will determine the kind of clients you’re going to chase and how you’re going to present your agency. 

Clients are the bread and butter of your business, so delaying this choice might determine the financial future of your digital marketing agency. 

Tips for Picking the Type of Your Digital Marketing Agency

It’s perfectly normal to feel tremendous pressure when facing this decision. However, we’re here to help you out.

When deciding which type of digital marketing agency to commit to, start by asking these questions:

• Are my skills already specialized, or should I develop them further?
• Do I want to work on multiple different marketing platforms?
• What kinds of clients am I looking to get?
• Am I passionate about a single aspect of digital marketing or the general process?

Making a big decision starts with having an honest conversation with yourself.

The next stop is picking a business model. 

2. Decide on a Business Model 

The business model you decide on will determine how you’ll bill clients for your employees’ hard work. 

When digital marketing agencies start out, they usually make one of two business model choices.

The flat retainer business model is a simple but straightforward way of charging your clients. It works by setting a fixed price on the work you do for a specific client. 

Both you and the client agree on what your agency will deliver and at what time. 

What’s great about this model is that there’s little to no disagreement between you and the client once the invoice arrives. 

Another business model you can opt for is charging your clients at an hourly rate. 

Digital marketing agencies that focus on consulting services prefer to charge their clients hourly because of the number of one-on-ones they have with the clients. 

However, for agencies that don’t focus on consulting, charging by the hour can make things difficult. 

For example, let’s say you’re doing a full service for a brand. 

If you’re managing multiple professionals, it’s going to be challenging to track every hour of their work. In case of even slight delays, the price can change in a heartbeat. 

To keep this from happening, assess which business model works best for your digital marketing agency. 

Let’s keep talking about assessments for a minute. 

3. Assess Your Current Assets 

Assessing what assets you already have plays a major role in starting your digital marketing agency.

Asset assessment is an important tactical move because it’s a major money saver. Since your digital marketing agency is only starting out, you have to mind your spending. 

Without a clear idea of your existing assets, you’ll end up buying some you already have or using assets that can be repurposed into something you need. 

If you want your agency to start off right and avoid costs wherever possible, a detailed asset assessment will get you there. 

It’s important to have a thorough assessment of the skills you have and that your digital marketing agency will use. 

If you skip this step, you’ll set yourself up for unexpected hiring costs in the future, and that’s something you should keep clear of. 

Be honest with your evaluation of your skills and avoid sugar-coating the situation. It’s about getting a clear picture of what you have at your disposal for the sake of rational spending. 

How to Conduct an Assessment of Your Assets

If you’re unfamiliar with asset assessments, here’s how you do it.

👉 List your technical assets. Technical assets are equipment pieces you need for your operations. They can be anything from laptops, monitors, tablets, etc. 

👉 Do a digital asset count. Digital marketers rely on software and digital assets every day. List the digital assets you have and that your agency can use. 

👉 Count your skills and assess their level. List all the skills vital to your digital agency, and test them to understand what level you’re on. You can do this by comparing your portfolio with other professionals or by solving online tests. 

As an agency owner, wasting resources is no longer the luxury you have.

4. Understand Your Operational Costs 

Operational costs are the expenses that you’re going to have to cover every month, so tread carefully when calculating them. 

Figuring out your running costs is essential because it determines how much money your digital marketing agency has to make each month to cover its expenses. 

By doing so, you can set the down limit of your revenue goals and align your business decisions with it. 

It would be utterly irresponsible not to know how much you’re going to spend on your essential running costs. 

There’s one more side to the operational costs coin you have to know. 

Your digital marketing agency will rely heavily on SaaS and digital tools to do its job.

It makes perfect sense, then, to do a digital asset cost count so you can understand your monthly costs of SaaS licenses. 

Neglecting this step will cause unexpected expenses in the future, which can be a financial slap in the face. 

Again, this is about being realistic and financially responsible. 

If you’re scratching your head thinking about some operational business costs, we’ll name a few:

• Office rent
• Administrative and accounting business costs
• Monthly utilities and consumables 
• SaaS and Cloud costs

Every efficient business owner out there knows her operational costs like the back of her hand. 

Now that you understand how much your operations will cost, it’s time to figure out how you’re going to fund your digital marketing agency. 

5. Make a Funding Plan 

To take your agency off the ground, figure out how you’re going to fund all your expenses.

Making a funding plan is key because it tells you if you’re going to finance your digital marketing agency with your own capital. 

After you know all the costs of opening up, you can start thinking about where you can get the money for all the essentials. 

The major benefit to self-funding is that you start your business free of any debts and responsibilities towards investors. 

This brings us to the other side of the funding plan.

If you can’t afford all the opening expenses, you can always reach out for outside funding. 

Outside funding options are ripe with capital that your agency can use to cover all the costs of opening up. 

You’ll have a larger pool of resources and can invest in things that work best for your digital marketing agency, but you can guess what’s the tradeoff. 

Your venture becomes financially responsible to an outside party. 

Which of the two you choose is completely up to you. 

If you decide to fund your agency through investments, these are the options your funding plan should consider:

• Bank loans
• Venture capitalists
• Governmental funding programs
• Private loans

Before you chose one, run through all the numbers and get a black-and-white picture of how much money you’re getting and how much you’ll have to pay back. 

Without an investment in your digital marketing agency, the things it needs to get off the ground won’t be available. 

6. Assemble Your Team 

Behind any outstanding project, there’s always human resources that made it happen. 

For digital marketing agencies, the engine behind success is a dedicated team, or sometimes an individual professional that can move mountains with her skill and determination.

Assembling that team is a major decision point in the inception of your digital marketing agency. Based on its specific type, you’ll need to fill certain positions. 

It’s perfectly normal for one person to handle two different positions when you’re starting out since the agency is just starting out. 

The aim of this step is to cover all the human resources the agency will need to successfully perform its operations and do an exceptional job on every project.

Various digital marketing agencies require different roles, but there are essential positions that every type has to fill:

• A CEO that sets the agenda for the business and takes the leadership mantle
• An account manager that handles client relationships and customer support
• Sales/Lead expert who will gain new clients for the agency and track down leads
• The production professional who creates the output material for your clients

When assembling your team, cover the essential positions and move from there. 

Alternatively, you can always go solo if you think you’re up for the challenge.

Going Solo: Pros and Cons

The so-called solopreneurs are professionals who run all the critical positions by themselves. It might sound crazy, but there are class experts out there who prefer doing all the work themselves. 

The major benefit of this move is that you get to keep all the profits and rely only on yourself, but the amount of work you’re going to be doing will demand every bit of your energy and time.

So consider whether you prefer being a one-man-band—or simply the frontman of a larger team.

After you’ve assembled your Avengers, it’s time you all sit down and align your agency goals. 

7. Set Goals for Your Agency 

Goal-setting is one of the most important practices in business, and your digital marketing agency is no exception!

Goals give your team a direction in which to build the agency. 

Without measurable goals, your team is just guessing where they want to end up. If you start your agency without understanding what your business goals are, you’ll end up wandering around aimlessly, chasing projects with no long-term vision. 

That’s why your team should agree on what the goals are. 

The second thing to talk about is how your digital marketing agency will get there. 

The fantastic thing about goal setting is that it enables you to understand the means of achieving those goals. 

They’re often many ways of achieving something, so defining exactly how you’re going to get to where you want to be keeps your team free of distractions. 

When you define the strategy and means for achieving goals, your company’s growth is transformed from wishful thinking to a doable checklist. 

Formulate Your Goals the SMART Way

Our best advice for setting goals for your digital marketing agency is to use the SMART method. 

Here’s what SMART stands for:

• Specific goals that use specific numbers to explain what the aim of the agency is. 
• Measurable goals that can be quantified and tracked, so you’re always working with exact data.
• Achievable goals that are within your company’s reach.
• Realistic goals, which are, similarly, within your company’s reach in its current state of development.
• Time-bound goals are set in a specific time frame in which you will achieve them. 

SMART goals will give your team razor-sharp focus and a long-term vision for growth. 

The next order of business is to discuss how your digital marketing agency will get revenue going. 

8. Set Up a Lead Generation Plan 

Generating leads or potential customer opportunities is the beating pulse of your digital marketing agency. 

A lead generation plan is a vital tool for understanding how your agency will generate leads.

Since leads don’t grow on trees, you need a strategy that tells your team what methods they should use to keep attracting them to your business—that they will later convert into paying customers. 

There are many ways to go about lead generation. However, without a strategy, your team will waste too many resources figuring out which methods work. 

Speaking of resources, every digital marketing agency has its marketing needs that need to be funded. A well-written lead generation plan will also discuss those. 

After settling on certain methods for lead generation, it’s time to write down what the marketing methods you’ll be using entail. 

Different lead generation platforms demand distinct assets, so you have to log them and get your production team on them. 

Let’s shine a light on this with an example. 

Let’s say your team used content marketing as a key platform to generate backlinks and leads. 

Then your lead generation plan for content marketing would have to include:

• Text content
• Images and infographics
• Videos to use
• Social media platforms for launching content
• A website to funnel leads to

Getting all these content pieces ready would then enable you to capture leads and start the conversion process. 

9. Have Project Management Strategies in Place 

The way a digital marketing agency manages its projects separates true professionals from mediocre industry workers. To succeed, you need project management strategies. 

Project management strategies determine how the project will be completed, which is what makes them vitally important. 

To accomplish a project, break it down into smaller tasks, assign them to your team and complete them in phases. 

A project management strategy will communicate how this will be done and determine the criteria for a completed assignment. Brick by brick, your team will finish the tasks and wrap the project. 

Still, you can’t get there without ways of communicating and tracking assignment progress. 

That’s why digital tools are a key part of your project management strategy. 

Using Project Management Tools

Project management tools help you and your team coordinate tasks and delegate responsibilities during each project. 

They allow for a quick exchange and access to vital information, allowing every team member to work on their separate tasks independently while being up to speed on project progression. 

As we’ve said before, digital tools and software are essential business assets for digital marketing agencies precisely because of project management. 

For example, imagine doing a complex project with dozens of small assignments by tracking its progress on paper or in excel sheets. 

What’s next, communicating with your clients using fax machines?

Make no mistake, without proper project management, your digital marketing agency won’t leave orbit. 

Your teammates have to be up to date with new tools and skills as well, which is why it’s time we talk about upskilling.

10. Write Upskilling Plans for Your Staff

Your staff can have an extraordinary skill set, but that doesn’t mean they’re done with learning.

Even the best tool in the toolbox needs sharpening every once in a while. 

Although your employees use the best of their abilities to make magic happen for your clients, they’re going to need upskilling if they want to stay on top of their game. 

We see marketing methods and tools evolve all the time, and your employee skills have to be up to speed. 

Like every top professional, you want to plan key activities ahead of time, so nothing impedes your efforts. 

Digital marketing agencies that think writing upskilling plans is just a formal obligation are missing the point. 

Writing upskilling plans helps you set an agenda for supercharging the skills of your employees. 

If you can time and track their professional development, you gain more focus and control over it. This will ensure your employees’ skills keep growing. 

How to Plan the Professional Development of Your Team

You probably think you’re getting ahead of yourself, but you’ll thank us for a year from now when you have more knowledgeable employees than other agencies on the block. 

In case you have written no upskilling plans so far, we’re happy to step in and share our best advice.

This is how you do it:

• Assess your employees’ current skill level and make a note of it with quantifiable data. 
• Talk with them and agree on the progression course of their skills. 
• Write down the number of workshops and webinars your employees will attend over the course of a year.
• Track their performance diligently. 

The skill level of your employees is closely linked to performing your digital marketing agency, and it shouldn’t be left to chance. 

Speaking of performance, it’s about time we talk about measuring it. 

11. Measure Results 

Your digital marketing agency’s business results show what you’re made of. Measuring them is vital for your further success.

Defining KPIs is the first step for measuring results. After all, if you haven’t settled on your KPIs, how are you going to know what to track? 

While digital marketing agencies have different KPIs based on their activities, there’s a way of looking at them that helps you define specific ones that work for you. 

KPIs are quantifiable measurements that you use to evaluate the success of an activity or an operation. 

Decide what the benchmarks of your project’s success are and track them a million times over, whether it be social media engagement, lifetime customer value, or the email click-through rate. 

After you’ve decided on your KPIs and gathered as much data on them as humanly possible, organize the data pool and present the results to your clients.

Measuring results gives you something to show to your clients who are probably itching to see what their money bought. 

Doing so and presenting them is the make-or-break moment of your digital marketing agency. 

While we can’t achieve amazing results for you, we can share some insights for making a killer presentation for your clients.

How to Present Your Results to Clients

This is the anatomy of a perfect results presentation.

✅ Start by explaining your KPIs and how they tie to the overall goal. Use data to explain why these specific KPIs are important.

✅ Show your team’s achievements and back them up with hard data. Since mountains of data are hard to read, use infographics to make them understandable. 

✅ Communicate what’s next for the project. Tell the clients what’s the next phase and give them a time frame for achieving it.

The next order of business is making development forecasts for your digital marketing agency. 

12. Make Business Development Forecasts 

Business development forecasts are an essential business practice that every digital marketing agency must do if they want to be ready for whatever is coming their way. 

Creating such forecasts is critically important because it enables you to chart the development of your digital marketing agency in a data-informed way. 

This is not the same as goal setting.

Making development forecasts is all about using the data you currently have about the market and your agency, then planning your development in light of that data. 

Your forecasts will tell you what to expect next, so you can align your activities accordingly. 

We can’t talk about making business development forecasts without telling you how to get the data, can’t we?

How to Use Analytics to Create Business Forecasts

The best way to make accurate development forecasts is to always use analytics tools. Your own website is a pool of data that’s extremely helpful in making projections about the future. 

It allows you to understand how your agency is doing so you can make forecasts as accurate as possible. 

That way, you can spot opportunities or future weaknesses that can hurt your development.

For example, if you track your visitor count and notice a declining trend, you can make prognoses of your future web traffic.

Next would be to implement a marketing strategy to develop a marketing channel, so you can combat the negative traffic trends and steer clear of disaster. 

Professionals never guess; they forecast. 

For best or worst-case scenarios, a well-written business development forecast will keep you ahead. 

Since we’ve brought it up, let’s address the worst-case scenarios and what you can do about them. 

13. Have a Business Continuity Plan  

As a digital marketing agency, your team must always have a business continuity plan ready. 

The past year has been a textbook example of the importance of having a business continuity plan. No business is immune to disruption. 

A plan makes all the difference between losing chunks of your revenue or keeping your digital marketing agency going, even in the most brutal conditions. 

It will tell your team exactly what to do and how to make sure you have vital assets ready in case disaster strikes. 

Think about all the businesses forced into downtime when the pandemic took flight last year. Without a continuity plan, you could end up the same.

Since you’re opening a digital marketing agency, your business continuity plan should extend to marketing as well.

A Marketing Continuity Plan

A marketing continuity plan plays a crucial role in keeping your digital marketing operations going, no matter the disruption. 

When you outline it in a document, you address every aspect of your marketing department that might be affected and have a Plan B for it. 

That way, there are no leaks in your ship, and you can steer out of the storm and into safety. 

In emergencies, your team is the backbone of your business continuity plan. 

It’s imperative you go through these points with them:

• Discuss possible disruptions that might occur
• Set up a chain of command so you can delegate duties if a key team member is missing
• Cross-train every employee for emergencies
• Have the entire strategy documented and available to everyone 
• Save resources for emergencies

Hopefully, you won’t face disruptions, but your digital marketing agency has to be ready should that day come.  

Conclusion 

At the beginning of this guide, we promised to give you valuable insights for opening up your digital marketing agency, and we delivered.

Starting your own business in the middle of a pandemic sounds like a crazy idea, but it’s not. It’s a sign of leadership and ambition.

Stick to our advice, and watch your digital marketing agency soar!