This is certainly not the definitive guide to starting, running and growing a digital agency.
Because there isn’t a definitive guide.
There are endless ways to create a successful agency. The information below has been gathered from interviews with founders of digital agencies from around the world.
It’s from these experiences that we can learn from and adapt to our respective journeys as a digital agency founder.
Whether you use Hassl for your agency or not, you will find a bunch of golden nuggets of insight below.
This post will cover the basics for absolute newbies and more complex tactics that someone who has been in the industry for 20 years could take away and incorporate into their agency.
So, let’s jump in!
How to start a digital agency
- Choosing the type of agency
- Getting your first clients
- Building a brand, portfolio and reputation
- Getting clients with referrals, pitch decks and return briefs 7
How to run a digital agency
- Managing tasks, projects and clients
- Managing Clients – Cashflow
- Managing a team using Hassl
- Find your niche, wear your values
How to grow a digital agency
- Hiring and growing a team
- Streamline, track, pivot, letting go of team members
- Networking and working with other agencies
How to start a digital agency
1. Choosing the type of agency
An agency is a business or organization providing a particular service on behalf of another business, person, or group.
Sounds sexy, doesn’t it…?
There are endless industries that you could serve as an agency. Even in the digital space, you could focus your attention on design, advertising, marketing, creative, websites, apps, programs, graphics or visuals. You could even bring together a few skills and create a multidisciplinary agency.
Your skills and experience will determine what agency you should run. Focus on how you can provide the most value to clients.
2. Getting your first clients
So you want to start an agency? So do thousands of others. But that doesn’t mean there isn’t room for one more; there certainly is. You just need to get your foot in the door.
The competition just means that there are more options for clients to choose from but no matter how many agencies there are in your field, the ones who will succeed are the ones who do the best work.
There are a few options to build your agencies portfolio, reputation and brand.
You will be in either of the following groups:
- You already have an existing reputation in the industry.
- No one knows about you.
If you already have a network within the industry, you can leverage this social equity to bring on your own clients. This could include contacting previous colleagues, businesses partners and brands that you believe could benefit from your services.
Just be careful of non-compete clauses in your contracts if you have worked with agencies prior.
A non-compete clause is a clause that prevents a party from competing with another party. For example, preventing an ex-employee seeking employment in a competitive business.
If you don’t have the luxury of an existing network, the next best thing is to work for free.
Yes, you read that right: WORK. FOR. FREE.
Well if not free, heavily discounted. This will provide you with an opportunity to build a portfolio with work that really shows how good you are. Some will say never to work for free, but if you are a fresh face in the industry with little experience and nothing to show for your work, it will be hard to get good, paying clients straight off the bat.
“Start with at least one paying client. Keep ‘em happy, but make sure they pay you fairly. Only work for free if that makes you happy. Don’t pitch for free (ever). Be bold. Ask for more money than feels comfortable. Be nice. Reward your staff nicely. Let corporates pay for your small & NGO clients.”
Jarijn from Grayscale Agency, a digital agency based in Hong Kong
It’s also important to build a portfolio of clients and projects which you WANT to do. If you want to work with chocolate companies, build a portfolio of chocolate companies (or those in a similar field).
If your goal is to have Patagonia as a client, build a portfolio of similar brands with similar values and offerings as Patagonia.
“Never underestimate your worth, but you also have to prove your worth and that is only through results, not words. I made so many mistakes when I started the agency particularly around charging and collecting on money. I promise you, giving a discount or doing work for free in return for possible referrals because the potential clients ‘knows’ all these people never happens. However, one thing I did do before starting the agency was that I made sure I had a client base to start. I built the client base through freelancing while working another job.”
Adam Stead from Stead Lane, a full-service agency in QLD, Australia.
3. Building a brand, portfolio and reputation
So you’ve landed some clients and finished some great work, now what?
It’s time to put it on display.
Creating a website for your agency’s services and a portfolio of your work lets potential clients see the value in working with you.
However, it’s also important to have a strong brand behind your agency.
A brand isn’t just about colours and a cool logo.
A brand is what you stand for, who you are and what you can offer. This is shown in the way you talk, the clients you work with, the team you build and the work you create. It’s important to stick to your brand and build your agency with authenticity – this is what will make you stand out from the crowd.
Your portfolio will include all of the work you have done for your clients. It’s important to communicate the thinking behind a project too (it’s more than pretty pictures and fancy mock-ups). You want to tell your potential clients – who will be reading your portfolio items – that there was a lot of thinking, strategy and research behind the end product.
This is what separates you from a good agency and a great agency. If you do the best you can possibly do, every project, you will be destined for success. If you are just chasing clients and the cash-monies, you’ll be burnt out, eaten up and spat out.
“Do what you say you’re going to do and do it by the time you said you’d do it.”
Courtney from Nearly Media, a podcast development and production agency from Melbourne.
Your brand, the work you do and the network you build is the foundation of your reputation.
Good work travels fast.
Have a clear vision of what you want it to be in the future. And then work towards it.
You’ll have to make some sacrifices for the long run. Going to have to say yes to somethings that you don’t want to in order to build into that goal. You’ll have to make some sacrifices but you’ll also need to know at what point you have to say no.
4. Getting clients with referrals, pitch decks and return briefs
There is no better marketing and sales tactic than word-of-mouth. Like I said earlier; good work travels fast.
92% of consumers will believe a recommendation from friends and family over any other type of advertising.
And how do you get others to refer your services onto potential clients? By doing great work; it’s as easy as that.
Once you have a potential client, there are usually two ways to start a business relationship.
- The Proposal
- The Return Brief
Pitching to a new client occurs when you initiate the service by providing solutions to a problem that they may – or may not – be aware of.
i.e. Cleaning Company X has a bad website. You pitch to them to build a new website so they can acquire more clients.
Sometimes a proposal is an easy sell and sometimes it takes a few rounds of changes before the client finally agrees. The key to a good proposal is to focus on the problems and how you can solve them. Reduce the amount of scepticism and fear the client might have about making a new change and present them with an alternate way of doing their business.
If you want to nail pitches, check out The Art of the Pitch: Persuasion and Presentation Skills that Win Business by Peter Coughter.
The Return Brief
This occurs when a company already knows what they want and they are seeking out agencies to solve their problem. The brief typically includes what the client needs and it is your job to provide a return brief, outlining how you can meet their needs.
Ie. Cleaning Company X knows they need a new website with a booking form. They contact multiple agencies to find someone who can deliver what they need at the right budget.
What to include in a proposal and return brief:
- Who are you and why are you right for this project?
- What are the problems?
- How can you solve them?
- What will it cost?
- How long will it take?
- What are the next steps?
“Build your profile and network first and foremost. And cost projects first before quoting.”
Gabriel from Take Friday Off, a product development company based in Sydney.
More reading: How to start a digital agency
- 3 Tips on Starting Your Own Design Agency – The Futur [Video]
- Use this formula to write winning project proposals [ Video ]
- How To Write a Design Proposal
How to run a digital agency:
Woohoo! You have successfully started an agency, you have a great brand, portfolio, client list and you know how to get more projects.
Now it’s ‘make or break’ time.
Many agencies (and any small business for that matter) fail in the first year and almost half will fail in the first 5 years. Why?
Here’s how to make sure you don’t burn yourself and your agency into the ground.
1. Managing tasks, projects and clients
It’s remarkable how much work you can accomplish in a 35-hour work week. It’s also remarkable how little work you can accomplish in a 50-hour workweek.
The difference? Task management.
Not time-management. TASK-management.
You can’t manage time. Unless you’re superman, an hour is the same for everyone. It would be amazing if you could, imagine being able to pause or slow down time! But sadly, you can’t. But you CAN manage your tasks.
Successful projects are made of many, small successfully completed tasks. Whether it is a 50-page website, an 80-story building or a business proposal.
They can all be broken down into small, manageable tasks.
And the best way to manage tasks is by getting the house in order; making sure everything is easy to access and your workflow actually makes work flow, not flop. Using a task management tool can make this process much easier. For example, when using Hassl, you could break it down like below:
Managing Clients – Set up a folder in Hassl for each of your clients. This is where all of their files, projects, tasks, time tracking and communication will live. It’s on the cloud so you can access it at any time and even if your laptop is eaten by a shark, your files will be safe, but the shark will have a helluva stomach ache.
Managing Projects – Within your client folder, make separate projects for the main activity you are doing with them. This could be a one-off project like a ‘ Website re-design’ or a recurring project like ‘Social Media Management’.
Managing Tasks – Under each project, create tasks and milestones. Milestones are made up of tasks. Tasks are anything that needs to be actioned to complete a milestone.
For each task you should follow 4 simple rules:
- Provide enough information
- Add a realistic due date
- Assign people to the task
- Track time
2. Managing Clients – Cashflow
There are often two main revenue streams for agencies.
Many agencies will use a combination of both but it highly depends on the services you offer and the clients you attract.
Projects – You complete a project for a client, you invoice for your time, the client pays you.
If this is a big project, you can make a reasonable sum but it can also mean that you can go long periods without any income. Big projects are also mentally and resource-draining. Projects are typically invoiced once completed (after an initial deposit is paid).
Retainers – You create an agreement with a client of recurring hours each month.
This is great for cash flow as you will receive a regular income each month. However, this can often be tricky to navigate with clients which is why Hassl reporting and time tracking comes in handy. You can simply export all of the tasks and hours you completed each month for the client to see.
However, the most important thing is to choose the clients that you WANT to work with. Yes, you are likely going to do work that you don’t necessarily love but it will pay the bills. But it’s important to try and work with as many clients that you love working with as much as possible. Which means that sometimes, you might need to say no to some projects.
“Be good at saying no even if your heartstrings are being pulled. Taking on too much destroys everything.”
Adam Stead from Stead Lane
See the opportunity in everything; regardless of client or industry. Work towards a value-based approach. Whether it’s a boring corporate client, you can still make great work and provide value for your client and yourself.
3. Managing a team using Hassl
Managing people is one of the most difficult parts of any business. Whether it’s managing your team, your clients or yourself, time management is key.
Using a project management tool like Hassl is essential if you want to succeed and not burn out.
Hassl, unlike many other tools, is as simple as you want it to be. No integrations, no complex customization, just simple project management for you and your team.
Give responsibility to your team. If you run an agency, you’re probably a bit of a perfectionist, which is great but you also need to learn to let go. Spend less time hand-holding, let go of being a perfectionist and trust your team. You’re actually not always the best, sorry.
Each week your team needs to know what they are doing and what needs to be accomplished. Assigning tasks, projects and deadlines for each team member ensures that everyone knows what deliverables are needed before Friday knock-off drinks. The easiest way to do this is to schedule what each of your team members (including yourself) needs to accomplish by the end of the week, breaking down projects with key tasks and dates. You can then assign tasks to each team member and add a due date.
Michael from Lion and Lamb has one piece of advice that trumps them all:
“Learn to plan, schedule & budget ASAP.”
And the best way to plan, schedule and budget, is by utilizing your team.
“Protect you and your team’s time! In the beginning, you will have to make decisions on not only the types of clients you want to work with but what clients are worth your time. Not all, even the high paying ones, are worth it. Building trust with your team by honouring their time will be 10x more beneficial in the long run.”
Yasmin from JSY Agency
4. Find your niche, wear your values
Niche – a specialized segment of the market for a particular kind of product or service.
Your product or service is unique to you (well, at least, it should be) which means that there will be clients out there who will want your type of product and service.
If you offer broad and common products and services then you might have a wide client base (and competition too). If you have a unique product or service then you are likely to have a smaller client base.
People often think of niches as target audiences; they aren’t.
Your niche should reflect your work, style, and values.
For instance, you might be a small branding agency with strong sustainability values who likes to support small, local businesses. This is your niche. You don’t want to go out and try and rebrand multinational oil companies, do you? By building a portfolio of small, sustainable brands, you will begin to create a reputation and brand for yourself. Naturally, clients alike will start coming to you and clients that you don’t like, will go to another agency.
This is why it’s important to wear your values. Whether you are an agency, a bakery or a musician, it is all too common to see people follow the money rather than following their heart. Wearing your values means that the work you do, the clients you work with and the team you build all align with your core values.
You are going to need to stand out and create a unique selling proposition when approaching new prospects.
This is your brand.
These are your values.
This is the work you’ve done.
These are the clients you work with.
If you work with people you respect and work for people you admire, you’ll wake up excited and energised every Monday morning. If you work with people and work for clients you don’t respect, you’ll have a hard time running a successful agency. And it won’t be much fun either.
How to grow a digital agency:
Growth can show itself in many ways; the number of clients you work with, the number of staff on your team, revenue, office space, etc. Whatever you envision growing means to you, there are a few key principles to follow:
1. Hiring and growing a team
Hiring should be a fun process but it generally isn’t. If you are in a small agency, your team is like a family. In fact, you probably spend more time with your agency family than your real family! So it makes sense to choose the right people.
Sasha Kanthan says that one of the most important things he wishes he was told when he started, was about building a team:
“Build a team with shared goals – if they share your enthusiasm then they will contribute more than what they’re being paid. Conversation and writing things down is the key to getting things done. Let others know early how you want to be treated by setting expectations. Use simple contracts with clear boundaries on deliverables. Call out failures early and re-negotiate or walk away.”
Onboarding employees with Hassl is the easiest way to get your new team members off on the right foot and into work mode quickly.
According to a benchmark report from SHRM, the average cost per hire across organizations and industries is $4,125.
So it makes sense to have a streamlined onboarding process.
2. Streamline, track, pivot, letting go of team members
Now that you have all the foundations in place, you have a steady client list and you manage to run a sweet agency quite smoothly.
But there are still a few kinks.
And if you don’t address these kinks they’ll turn into knots that will tie you down. So here’s how to make sure that doesn’t happen:
Streamline – Once you understand your workflow and how your team works best, it’s time to streamline these processes. Whether that be onboarding, QA, client feedback or accounting; there is always room for improvement. Streamlining could mean checklists, templates, decks or briefing documents. Anything that reduces the time to get real work done.
Track – Time tracking. Time tracking. Time tracking. That’s it. I know it can be annoying and often you’ll forget. But if you and your team track each and every project, you will be able to plan, schedule and analyze far better than anyone else.
You will end up with more time on your hands, deadlines that actually make sense and invoices that equate to the hours you’ve worked.
Pivot – If it’s not working for you and your team, move on. This could be a main service you offer or an industry that you have been working with. Just because you have always offered it, doesn’t mean that you have to continue to offer it in the future.
By streamlining processes and time tracking, you might come to realise that certain services are draining your time, team, and resources without the financial benefit.
Improve your team – Your team is the most important asset you have. Unfortunately, you might need to let someone go. This is often hard, especially when the team member you are letting go hasn’t done anything wrong, they just might not be the right person for the team.
It’s important to have a strong workplace culture and to have people in your team that align with what you want for your agency. In some cases, you might have a team member who has worked with you since the start of your agency but you have since changed your mentality and philosophy. If you do have to let someone go, do it right. Make sure they have time to get another job, give them a good review and make an effort before you let them go to see if they can change.
People leave jobs, it’s normal, so let’s make it as nice as possible for everyone involved.
There are two key benefits of trying to win awards.
- Your work will naturally get better because you have an external motivation
- It’s free advertising and networking for work you’re doing anyway
By trying to win awards, you will have another boost of energy and resources to make sure every project you make is to the best standard possible. Not only do you want to please the client and deliver an amazing job, but you also want to show the world how amazing you really are.
There are countless awards depending on your industry. Some are more respectable than others, so choose wisely. There are awards that are just made to make money from entries. Pick awards that you believe would attract the clients you want to work with and awards that are reputable.
By entering awards, you will also have the chance to see what others in the industry are creating. Flooding your creative senses with new stimuli to bring back and incorporate into your own projects.
It’s free advertising.
Well, mostly. Sometimes you have to pay an entry fee but in the scheme of advertising, it’s practically free. Potential clients could be at an awards night and see your work. If you win, you will be able to showcase your success on your website, social media, LinkedIn, email signature, you name it!
And at the end of the day, being nominated for an award in your industry or niche is a great feeling. You work hard, week in week out, it’s about time you get the respect you deserve!
For a list of great design awards, check out the Wikipedia page: List of design awards from around the world
4. Networking and working with other agencies
The main client stream for most agencies comes from referrals and word of mouth. However, this also means that you will begin to revolve around the same network circles. This is why it’s important to go out on your own to create and engage with new networks.
This could be through talking to people at events that relate to your services, industry or target market. It could also be by sharing your knowledge to others at events, social media or podcasts.
“Networking is key – but make it meaningful and genuine.”
Gabriella Swartwood from G3, a marketing and PR Agency from New Jersey.
Networking is about building a network, not selling your services to anyone who will listen.
“A network is a personal network is a set of human contacts known to an individual, with whom that individual would expect to interact at intervals to support a given set of activities. In other words, a personal network is a group of caring, dedicated people who are committed to maintaining a relationship with a person in order to support a given set of activities. Having a strong personal network requires being connected to a network of resources for mutual development and growth.”
Let’s break that down:
- Interact at intervals to support a given set of activities
- Caring, dedicated, committed to maintaining a relationship
- Mutual development and growth
There is a common misconception with agencies that you must offer as many services as possible and try to keep all of your clients projects for yourself.
Running an agency doesn’t mean you can’t work with other agencies, in fact, it’s highly recommended.
The bottom line is to provide the best service you can to your clients, your team and to make money doing it. Work collaboratively, share knowledge, you can even share or refer clients.
For example, say your agency offers Video Production as a service. You might not be the best at making videos, but you can do it to a satisfactory level. But say you have a great client that needs the most amazing, high production video for a website you are developing for them. You could try it yourself and provide a mediocre video or you could partner with a professional film production agency. The film production agency will be grateful that you referred a client and brought them work. They then will be more inclined to refer website clients to you when it arises.
“Take all the feedback you can get and be open to learning new things. Go above and beyond for your clients – word of mouth is unbelievably powerful and effective in this industry. Network and tell people what you do even if you don’t think they need your services – you never know when they might come back to work with you down the line or refer someone they know.”
Sadya from Creative Corner Agency, a full-service creative agency from Melbourne
Work with specialists when needed.
You don’t have to offer every service.
Conclusion: Start, run and grow an agency
So let’s recap.
Starting your agency:
- Choosing the type of agency that aligns with your skills, experience and values.
- Use your existing network to get your first clients, you might need to work for free.
- Build a brand, portfolio and reputation through the work you do.
- Build a solid client list by pitching and referrals.
Running your agency:
- Use a project management tool like Hassl to create an optimal workflow to keep track of tasks, projects and clients.
- Create a solid cashflow with a range of different clients: big projects, small projects and retainers.
- Do the work you are proud to do and work with people you are proud to work with. Develop your own niche and wear your values.
Growing your agency:
- Hire the right people who are passionate about what they do and want to grow with you.
- Streamline everything you do, reflect, ask yourself how you could improve and what is holding you back.
- Win awards. Well, at least, try and win awards. Make sure you are continually improving and doing new, exciting work.
- Build your own professional network and work with other agencies.
Good luck! We hope this post has taught you a thing or two. A huge thank you to all the amazing founders who gave their time to provide us with some valuable insight and quotes.