A Step-By-Step Guide to Starting a Digital Agency from Scratch

We live in a time when starting a business is as easy as putting a thread through a needle. Wait, is it easy? Well, it is, if you do it the right way. The same goes for starting a digital agency business. A website and a small team are all it takes to start an online agency. But there are a few things you should do to ensure your idea turns out to be a success. Here’s a step by step guide to starting a digital agency from scratch. 

Decide what services you’ll offer

Thanks to the internet, you can now provide almost any service online. The first step is to decide what services you’ll offer to your potential clients. Some common digital services are:

  • Digital marketing
  • Designing
  • Consultancy
  • Architecture
  • Business development

However, you should not limit yourself to the services mentioned above. If you’re a great singer, you can work for clients looking for vocal artists. If you’re a psychologist, you can attend patients online. You might be tempted to offer as many services as possible, but that’s not the way to go for a new agency. When starting out, stick to a few services that you’re good at. 

Develop your expertise

There’s a difference between being a good designer and a great designer. There are hundreds of thousands of digital agencies out there, so the chances of you outshining them are already bleak. 

But you can succeed if you provide quality like no one else. So, before starting an agency, note down a few services you want to offer – then get really good at them. Learn and practice as much as you can, so when you start your agency, you can position yourself as your expert. 

If you’re launching a digital marketing agency, develop the prime online marketing skills, like SEO, PPC, SEM, Branding, etc. If you’re launching a software development company, you should be proficient in programming languages and frameworks. If you’re a designer, you should have expertise in using tools like Blender, Adobe, Canva, etc. 

Apart from developing hard skills, you also focus on enhancing your business management, sales, and self-confidence qualities. Running an agency requires talking to clients, working under strict deadlines, and managing multiple smaller teams. Therefore, you’ll need more than just technical skills to make your agency successful. 

Decide your business model

You can operate a digital agency in various ways. These include:

  • As a virtual company from home and hiring remote workers
  • A traditional approach with an office and local employees
  • A combination of both

All three options have their set of pros and cons. For example, when you run a virtual company, your overhead costs are almost zero. But on the downside, you have to rely on freelancers for all your work, which can sometimes backfire. 

If you choose a traditional approach, you’ll have complete control over your team and project. Having an actual office in a city also helps you build trust and find local clients. But such a business model can be expensive for a new agency. 

It’s better to stick to the virtual company model when you start out. Hire a few skilled and reliable freelancers and run your agency. Once you build a portfolio and develop a big clientele, you can move to an office and hire an in-house team. 

Register your business

Branding is a critical component of running an agency business. You don’t necessarily need to register your company as a “Pvt. Ltd.,” but at least look for ways to build a brand online. Once you grow big, register your business with legal entities and get it on paper. 

Here’s a roadmap to follow:

  • Decide a unique name for your business
  • Register your domain name
  • Design a unique logo
  • Register your business with relevant authorities
  • Get a toll-free number
  • Hire an auditor or accountant
  • Find a lawyer
  • Create business cards and brochures

You don’t need to do all of these steps in one go, but make sure to put all the pieces together one after the other. 

Establish your web presence

Like an offline business needs a real, visible property, a digital agency needs virtual real estate, which comes in the form of a website. The website acts as the front door of your agency and is one of your most valuable business assets. Make sure your website looks professional and gives your potential clients an insight into what can deliver as an agency. It should have at least your portfolio, contact details, and client testimonials. 

In addition, you should have dedicated service pages that provide a detailed explanation of each service you offer. Your website should answer all the questions your potential clients can have. Each page on your site should have sign-up forms for easy lead generation. Lastly, don’t forget social media. It’s a powerful way to attract potential clients, so have your presence on platforms like LinkedIn and Facebook. 

Showcase your expertise

Your potential clients will purchase only what they’ll see. You might be the best developer in the town, but if your prospects don’t believe it, they won’t hire you. The key to acquiring new clients is by demonstrating your experience and expertise. You can do this in the following ways:

  • Having an “About Us” page telling your story and achievements
  • Case studies
  • Success stores and client testimonials
  • Clients/companies you’ve worked for
  • Partnership agreements
  • Certifications and affiliations

Not to say that you can’t acquire new clients without doing all this. But when you start an agency, your goal should be to land your first client as soon as possible. And showcasing your expertise is a great way to get started. 

Use the right tools

You’ll need the right tools to run your digital agency efficiently. In fact, paying for tools will be your second largest expense after paying for employee salaries. No matter what services you offer or what business model you follow, you’ll need tools to do almost everything. 

If you’re a design agency, you’ll need to pay for tools like Adobe and Canva. If you’re a digital marketing agency, you’ll need to subscribe to tools like Ahrefs, Hubspot, Moz, SEMRush, etc. 

Apart from your services, you’ll tools for reporting, accounting, invoicing, billing, and client management as well. You can start with free or less expensive tools, but as your business grows, you’ll need to invest in more robust solutions. 

Choose your revenue model

As a digital agency, you can charge your clients in the following ways:

Fixed-rate: In this model, you charge your clients fixed hourly, monthly, or per-project rate. This model ensures you make money even if your services don’t yield results. But on the contrary, you’ll only make a fixed amount of money even if you delivered spectacular outcomes. 

Margin basis: In this model, you charge your clients a percentage based on the results produced. If you yield higher results, you’ll achieve to earn more money. But if you don’t produce results, you won’t get anything. 

For new agencies, sticking with the fixed-rate model is the best pick. 

Conclusion

Starting an agency is easy, but managing it and making it successful is definitely not. Therefore, follow these steps to make sure you move ahead in the right direction.

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