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The Pros & Cons Of Starting A Marketing Agency [Advice From An Agency Owner]

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]
The Pros & Cons Of Starting A Marketing Agency

If you've been in the entrepreneurial world for longer than a week, you may have heard of a popular business model.

In fact, it's also popular amongst my readers here at my blog.

For 8 months or longer, I was able to experience the ups and downs that a marketing agency bought.

At the start, when I had started with some partners, it felt great.

It felt like we've finally found the one thing we've been looking for this entire time.

We found the business we've wanted that will take us from 0 to 1.

I spoke all about this in my first article about marketing agencies, 'Should You Start A Marketing Agency.'

The start always feels good, but it eventually starts to get darker, and darker. For me, it also got lonelier and lonelier.

Not only did we fail 1000 times, but my partners also started to drop out like flies.

In this article, I wanted to share the pros and cons with you.

I wanted to help you make the final decision on whether starting an agency is right for you.

Here are the pros and cons of starting a marketing agency - advice from someone who ran a marketing agency.

Pros

Let's start with why you might want to start a marketing agency.

High margins

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]

The first time I saw a video of a marketing agency guru, I was shocked.

He was barely a few years older than me, living the dream life I wanted to live.

He was making 10s of thousands per month running a business where almost everything he made was pure profit.

There are a lot of businesses you can start, but the issue is the profit margins.

For example, starting an eCommerce business might not be the most fruitful business.

You'll realize that your profits run below 50% most of the time unless you're super careful how you advertise, how you source products, etc.

In fact, it's very difficult to have a 50%+ profit margin when running an eCommerce store.

On the other hand, if you run an agency, your margins will be 95% or more at the beginning.

When you start to spend money on tools, software, and hiring, your profit margins will decrease.

You should see an average of 80% profits.

That means for every $1000 you make, you're really keeping $800 from it.

This is much more attractive than making $1000 and keeping $200-$400 - the margins a lot of eCommerce companies yield.

Profit is always the most important metric to focus on in the long run.

If you're not profitable, then you're not in business.

Amazon or Facebook endured years on years of unprofitability before they finally turned the tables around.

These are examples of businesses that had one goal only - to be the biggest.

With your business or marketing agency, you don't need to be unprofitable to be the best.

All you need are the systems and processes to run your marketing agency efficiently.

If you're looking for a business that makes you a lot of money and allows you to keep a large chunk of it in your pocket, this might be for you.

Simple to start

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]

I thought there had to be a cache.

There's no way that this boy is only a few years older than me and running a business like this.

When he broke the business down, I realised that running an agency was one of the simplest things ever.

You choose a service, a niche, and find clients.

Once you find clients, you fulfill the service you promised.

You keep doing this over and over, repeating the process until you've built an agency you're happy with.

Of course, there's a lot more that goes into it, but that's the essence of running the agency.

It sounded too simple to let go - it sounded like the perfect business to start.

If you're a brand new entrepreneur looking to get your foot in the door, there's not much else that can be easier than starting an agency.

You don't need to follow courses.

You may just need to watch a few YouTube videos.

Even then, that might mess your journey up.

I've written complete guides about starting your own marketing agency before.

I believe that everything on my blog is enough to help you build a $100K/m+ marketing agency.

All you really need is the mindset, which is also all over my blog.

Other businesses require you to order inventory, test the product/service's demand to find product/market fit, and so much more.

With an agency, you don't need any of this.

You've already got a service that is proven to be successful.

You don't need to order any inventory because you're running a service-based business.

To be successful at an agency, you just need to do it the way other people are not doing it.

You need to start with the mindset to win - building systems and processes from the beginning, getting the help you need, etc.

Did you know you don't even need to be an expert at the service you offer? Let's explain that now.

Scalable and automatable

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]

When we finally decided to start the agency, I took the path that led me to failure with my first business.

I told my partners that we all need to go and learn a service separately.

I told one of them to learn about SEO, the other to learn about copywriting, and I was going to learn all about advertising through Facebook and Instagram.

I thought that we needed to be able to do everything for clients in order to win their business.

I then quickly realised that this is not how you run an agency - all you need is one service, one niche, and the right people to help you succeed

Success comes from mastery - it's important to master one service and offer that to clients rather than focus on everything under the sun and struggle to find clients or get results.

Let's say you knew this already.

Let's say you've already read my previous articles and started your own agency.

You've even managed to get your first client fairly quickly after reading the article about outreach and prospecting.

What's next? You're starting to feel overwhelmed.

You need to do the outreach, respond to messages, meet with your client, deliver their results.

You're starting to get very busy.

Well, it's time to scale your business!

It's amazing how far you can take an agency whilst maintaining high-profit margins and freedom in your own life.

One of my articles talked all about building an A-team for your marketing agency.

I feel like having the right team around you is the best and fastest way to scale an agency.

In fact, it's the best way if you're looking to automate (or delegate) most of the work and be free from its daily operations.

There are 2-3 big positions you need to scale the business:

  • A service delivery person
  • A VA or someone to find clients
  • Someone to close clients (optional)

I highly recommend finding all 3 - that way, all you need to do is have team talks and run meetings, and speak to clients once you've acquired them.

This also helps you look much more professional to prospective clients - when the owner of the business is not the one doing the prospecting or the sales calls.

You need a maximum of 2 service delivery people and a maximum of 4 virtual assistants.

These numbers are only necessary once you're making 100s of thousands per month in revenue.

When you're still on your first few clients, 1 is enough for each roll.

If you find me a business simpler to scale than an agency, send it to me and we can have an article written about it!

Cons:

You already know that nothing good comes easy.

There are a few things that might make you not want to start an agency.

It's up to you to make the decision whether the pros outweigh the cons or vice versa.

The first client

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]

After we went through a massive learning curve, only my partner and I were left.

The other one had left a few weeks in - I was happy, if I'm honest, because it meant more profit for me!

We've spent the last 1-2 months learning the wrong way, fixing it, and we're finally ready to launch.

We had the site ready to go and all that's left now is finding the clients and making the money.

We started off by doing some cold calling.

One day, I told my partner to jump on a Skype call where we sat together and started to do our first few calls.

I kicked things off - we had a small list of prospects ready to go.

I thought that all it needed was a few calls to get our first client.

As I entered the number into my phone, I felt my heart galloping out of my chest.

I was frightened - why? I did not know.

This was all new to me - completely out of my comfort zone.

For a month or so, I was a door-to-door salesperson.

That was so much worse than cold calling people, yet I couldn't get myself to do it.

After a few minutes of consolidation, I finally decided to ring the number.

3 seconds... beeep, beep...

10 seconds... beeeeep, beeep....

Then it happened.

No one picked up the phone - a sense of relief went through me.

My friend's turn came up and the same thing happened, only this time, the person picked up.

"Hi [name], this is Mekial from Elevate Marketing, how are you doing today?

Great, do you have a minute to speak?"

Then I heard the phone hang up.

A few calls later, we were defeated.

How could we do this? No one wanted our services.

That same day, we gave up cold calling and moved on to social prospecting.

For a few months, we tried, half-heartedly, until we picked up a VA to help us.

Even with the VA's help, we couldn't get a client to close.

3-4 months into officially starting the agency, my partner decided to leave like the first one.

We had failed to build an agency and make our dreams come true.

I never gave up though. I bought a course, strapped in, and made sure I'll succeed.

5 months later, following one defeat, after defeat, after defeat, I also gave up.

There was no way I could take it anymore.

8-9 months of failure led to this moment.

Do I give up and move on, or do I keep going?

I decided that this business will always be here if I wanted to come back.

Simply put, it can be a nightmare to get that first client to say yes.

Not only do you have no experience, but you also don't have the right mindset.

If you keep persisting, it will come eventually, but I couldn't keep doing what I was doing - I felt like I was on the brink of depression.

This was the reason I stopped the agency, and the biggest con I've heard many others speak of.

Saturation

The Pros & Cons Of Starting Of Starting A Marketing Agency [Advice From An Agency Owner]

Whilst I was prospecting for my own marketing agency, I had a lot of pushback from prospects.

Some prospects get angry that you contact them.

Some try to big brain you.

Others tell you that they receive a bunch of these same messages daily.

The first time I heard this, I was very surprised.

I never really knew how popular this business model was until I started doing it myself.

The truth is, there are tens of thousands of people out there just like you and I.

There are many people looking to start businesses - a lot of them end up finding out about running a marketing agency.

It's a very simple business model, yet the downsides of it might be enough to make you turn a blind eye.

The amount of competition is ferocious.

It doesn't help either that there are a bunch of fake gurus preaching about it all over the web.

It just makes more people come into it with false expectations, saturate the market, then leave disappointed.

If you had an agency a few years ago, you would have been much better off.

It's not a difficult business to start, run, or scale.

The longer you wait, the harder it could be to start due to the insanely low barriers to entry.

Once again, however, all you need to do is start off the right way.

Start by building the agency to last. Many people start agencies to make some quick money.

They know absolutely nothing about their service which makes it very hard to maintain a client once you do get them.

On the other hand, there are people like me - they strive for perfection only to get hit by imposter syndrome before getting a client.

Either end of the stuck is not ideal.

Yes, there's a lot of competition, but most of the competitors who own an agency are not successful.

It's just a title they have on LinkedIn or Facebook.

To differentiate yourself from the competition, you do what the competition doesn't.

You show the clients what you can do for them and their business, not just tell them about it.

This way, you don't need to worry about saturation, you're already ahead of 90% of the others.

Those were the pros and cons of starting a marketing agency.

Did you find this article helpful? 

If so, please leave your thoughts in the comments below - let's get some conversations going!

Share this article on social media and with others, let's help more entrepreneurs realize their dreams!

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Till next time,

Mohamad

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