How to Build a Creative Agency from Scratch

The creative industry in the United States is a multi-billion-dollar industry, and it seems everyone wants a piece of the pie.

Since 2021, there has been a 12% increase in the number of creative agencies. If you’ve got your sights set on building your own business from scratch, you’re in luck. We’ve laid out everything you need to know to help you get started.

Without further ado, let’s dive in.

Step 1: Financing Your Agency

There are five main ways to raise the money you need to get started.

• Bootstrapping: You’re basically using your own money. You either tap into your cash savings or your 401K through the ROBS (Rollover for Business Startup) scheme.
• Banks: This is a frustratingly slow process, as these lenders want to see a steady income, equity in your home, a 700+ credit score, relevant industry experience, and your business plan.
• SBA loans: These fall under two types – community programs, which loan you up to $250,000, or micro-loans, which can furnish you with $50,000.
• Crowdfunding: You can apply for funding through online platforms like Indiegogo, Kickstarter, and GoFundMe.
• Angel investors: there are two types – warm market (friends and family) and cold market (people you don’t know). Approach the warm market when you want smaller amounts and the cold market when you’re seeking larger sums.

Step 2: Hiring Your Employees

As a startup owner, your first hire should be someone with opposing skills/strengths. For example, if you’re strong at sales but poor at administration, then hire someone who is skilled where you lack and is a collaborative worker. 

Ultimately your agency should have at least one person in each of the following core departments:

• Sales
• Marketing
• Accounting
• Finance
• Product development
• Operations/administration
• Legal

You’ll also need to figure out a compensation model for your staff. Are you hiring full-time, part-time, or seeking freelancers?

Consider hiring supporting freelancers or SMEs for client contracts, like an SEO audit or a media strategy, by using resources such as CloudPeeps, Upwork, or Torchlite. These marketplaces focus on bringing the right talent to companies like yours.

Step 3: Choosing an Office Location

The first question you might want to ask yourself is, “Do I need an office right now?” Locking yourself into a year-long lease when you’re not even established yet might not be the best decision for your business. If you’re a homeowner, consider turning a spare room into your workspace. You could even use your garage!

As you grow and start looking for space, think about joining incubator and accelerator hubs in your city, to get access to communal offices and boardrooms to meet with your clients.

Once you can afford a place of your own, create a budget first. Then pay attention to the functionality as you view different locations (e.g. ease of access to the office, safety, visual needs of your agency) and your contract terms (e.g., does rent increase yearly?).

Keep in mind that you may want to create an agency that is fully remote. Or, perhaps, you want one that has a hybrid approach. Either way, these decisions should be taken into consideration when/if looking for a physical location. 

Step 4: Networking and Building a Client Book

Without clients, you don’t have a business. As a brand-new creative agency, you’re going to have to spend time building brand awareness and credibility so you can secure clients. This can be done by leveraging social media to push content and winning awards and accolades (e.g., check out the various US Agency Awards you can apply to.)

Start networking by reaching out to your current professional network. Utilize your contacts! Reach out to old coworkers and colleagues and ask them to catch up on the phone or grab coffee or lunch with you. Sometimes, your contacts may have opportunities they’re too busy to manage or don’t have the right resources for. This would be the perfect opportunity for an introduction.

If you share with your colleagues that you’re going out on your own, chances are they’ll want to support you and keep you in mind the next time a creative need lands on their plate. The power of referrals and word of mouth is incredible. People are more likely to buy when referred by someone they know. But don’t just wait for these referrals; ask for them!

Also, think of networking karma. When you’ve learned all you can from your new and existing connections, don’t just move on. Make sure you pay it forward to new entrepreneurs who might need guidance or introductions to support their new business. Agree to chat with people who reach out and ask for help building their own businesses. 

Step 5: Establishing KPIs

The late management expert Peter Drucker once said that you could not manage what you don’t measure. Simply put, every business owner needs to track business metrics and analyze them.

You cannot gauge how well you’re doing as a company on a month-to-month basis without keeping accurate records. Without data, you won’t be able to tell where you stand in the industry against peers. So what should you be measuring?

There’s a host of Key Performance Indicators (KPIs) you could potentially track but here are some important ones:

• Monthly Recurring Revenue (MRR)
• Net Promoter Score
• Lead Conversion Rates
• Website Traffic
• Retention Rate
• Client Acquisition Cost
• Customer Lifetime Value
• Employee Satisfaction

Step 6: Figuring Out Your Payment Models

There are six primary pricing models you can opt for based on your needs and objectives as a creative agency:

• Fixed fees: clients like this model as there are no surprise surcharges.
• Hourly fees: in this compensation model, the client is billed based on the time taken and associated expenses incurred to complete a project.
• Monthly retainer: most common model in use. Each client pays a set fee each month.
• Performance-based pricing: some well-established agencies prefer to opt for this model, although the agency assumes the greater risk.
• Project fees: client is billed per project regardless of the time taken or resources needed to complete the task.
• Value-based pricing: an excellent way to build a mutually beneficial long-term relationship where pay is based on value addition.

Step 7: Creating Your Agency Website

First impressions count. You’re a creative agency. You need a brand and a website that wows your visitors and prospects and shows off your capabilities and talents. 

However, don’t be that agency that tries too hard to be clever. Consider working with a UX expert to ensure you don’t end up with confusing navigation and no clear website hierarchy. Your website should appear professional and unique but also have really clear information for any visitor that wants to hire you.

Also, remember that your website is meant to generate leads. Be sure you have a clear call to action and that the visitor can easily understand who you are, what you do, and how you can help them.

Besides your call to action and clear navigation, there are a few other things you should consider to make your web presence an effective part of your marketing strategy:

• Contact information on every page
• A blog
• An SEO strategy to drive more qualified traffic to your site
• Testimonials and case studies
• Photos or videos of your work, venue, or team (think: online portfolio)
• A newsletter sign up
• Social media accounts

Step 8: Setting up a Content Strategy

Content marketing is SO important for lead generation, as well as brand trust and awareness. As mentioned above, two necessary basic things to consider when you create a website are a blog and an SEO strategy. Help your potential clients find you!

Content fuels your online marketing channels. Start with writing blogs that will attract clients to your business. Think about the problems your prospects are trying to solve and how you can help. Dig into creative problems you’ve solved for past brands and clients. 

The content on your blog can form the basis of bite-sized content that can be used on your social media platforms, such as Facebook and Twitter. It can also be repurposed into:

• An email newsletter
• E-books
• Online Courses
• Lead Magnets

Try to gain additional exposure and showcase your expertise through guest blogging for top creative publications such as AdWeek, B2B Marketing Blog, or Creativity.

Keywords are also critical to consider as a part of your content strategy. Keywords will help you drive more qualified traffic to your specific web pages, which leads to better conversions. Put simply; they help you get your content in front of the right people at the right time.

Owning an agency is not for the faint of heart, but it’s worth the work to build a business of your own. When you’re burning the midnight oil, it’ll all be for your own success and your own revenue. Be sure to take the time to consider what kind of company you are — really hone in on your value proposition. 

Focus on the type of clients you want, how to make them happy, and build a team culture that you’re proud of. Lastly, don’t forget to have fun. Your agency is your livelihood and something you should feel passionate about. Share your passion with your colleagues, employees, and your clients.

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