After getting your education in a field related to marketing, advertising, or public relations, you may consider the possibility of starting your own agency. Being an agency owner comes with several perks; you’ll get to control who’s on your team, you can pick and choose who your clients are, and you’ll enjoy the potential of practically unlimited income.
That said, starting an agency can be difficult, so you’ll need to think a few things through before you pursue this route.
Things to Consider Before Starting an Agency
Consider these questions before you decide to be an agency owner:
- Do you have the experience? Having a marketing background is essential to be a successful marketing agency owner. Ideally, you’ll have a long history of working in different roles in the industry, as well as leadership and/or entrepreneurship experience. Merely having a degree in marketing, public relations, or business management may not be enough. If you don’t have this experience on your own, you may be able to get it secondhand by working with a partner—but this isn’t always ideal, either. Plus, you’ll need to find a partner with experience who’s willing to share the reins with you.
- How will you accomplish the work? You’ll provide some kind of core product or service in your marketing agency and you can’t do all the work yourself, so how will you accomplish that work? You could make full-time hires, but this puts a heavy financial strain on your business from the get-go. You could rely on independent contractors, but they may not be as reliable as your full-time employees. Outsourcing to a white-label service provider is often an efficient choice, but there are also some risks you’ll need to plan to compensate for.
- Who is your target audience? Successful marketing agencies tend to focus on one or a handful of specific target demographics. If you try to be a generic, all-consuming marketing agency, you won’t have enough to differentiate yourself from your competitors, and your marketing will be all over the place. Will you target big companies or small firms? New startups or legacy businesses? One industry or several?
- What’s your unique value proposition? You’ll also need to have a unique value proposition (UVP)—a distinguishing feature that compels people to buy from you, instead of one of your competitors. There are several ways to market your agency as different and/or better than your competitors; for example, you could specialize in providing one type of service, or you could plan to offer lower prices and more flexible terms than a typical agency. You have significant wiggle room here, but you need to find something that both sets you apart from your competitors and seems attractive to your target demographics.
- What’s your end goal? Entrepreneurs often get caught up in dreaming about the many possibilities of business ownership without having a firm goal at the end of their path, but it’s much better to know your end goal in advance. Are you in this to make as much money as possible? Are you trying to retire early? Do you want a business that you can pass onto your children?
- How will you grow? No matter what your end goals are, you’ll probably want to grow your agency eventually. Attracting new clients can be problematic, especially for an inexperienced agency owner, so it’s good to have an idea for your growth trajectory long before you enter the game. Will you invest heavily in marketing and advertising? Will you use a referral program? Will you try to merge with or acquire other agencies?
- Do you have a backup plan? Finally, you need to be prepared for the reality that the majority of new agencies (and new businesses in general) end up failing. If your agency can’t support its own weight, or if you find agency ownership isn’t right for you, do you have a backup plan? If so, what is it?
Building Your Experience
If you’re feeling intimidated at the idea of starting an agency now, but you still like the idea of owning one in the future, your best path forward is to gain experience in areas that will help you be a successful agency owner in the coming years. See if you can work at an existing agency in multiple different roles, so you can see how an agency functions from the inside (and from multiple different perspectives). It’s also important to develop your leadership experience in a managerial role, or as a team leader.
There’s always time to start an agency, so don’t rush into it if you’re inexperienced. In the meantime, work on developing your skills so you continue making steady progress toward your ultimate goal.