How I Started A $100K/Month Shopify Ecommerce Agency

$107,000
revenue/mo
2
Founders
16
Employees
product
Velstar
from Liverpool
started May 2016
$107,000
revenue/mo
2
Founders
16
Employees
2.35M
alexa rank
660
followers
106
followers
accounting
productivity
design

Hello! Who are you and what business did you start?

Hello, I’m Dan Sheard and I’m the Managing Director of Velstar, a Shopify Plus partner agency based in the UK.

We help direct-to-consumer brands make more money online. We do this using the Shopify platform, building engaging and conversion focussed eCommerce websites mixed with highly effective growth marketing. Since starting Velstar we have seen huge revenue growth year on year of at least 100% every year! We have a team of 15 people and we’re looking to double that within 18 months, eCommerce and our business show no signs of slowing down and we’re going to maximize this opportunity.

how-i-started-a-100k-month-shopify-ecommerce-agency

What's your backstory and how did you come up with the idea?

I went straight into work after leaving high school and my first few roles were in sales which have helped enormously in starting this business. Sales quickly teach empathy and understanding and give you a fast introduction to the hard commercial realities of running a business.

Although I learned a lot, I quickly realized that working in sales wasn’t my calling and so taught myself to be a web developer by reading tutorials online and signing up for an overpriced distance learning course. This was before the time of online code schools, I think it’s a lot easier to become a developer these days there are some great online coding schools and also some great free tools such as Codecademy to get started with. After that, I worked at a number of large agencies in London. Again, I learned a lot and gained valuable experience, but I also wanted to focus on helping brands that didn’t have million-pound budgets. My ambition then became to start my own business combining ‘big agency’ experience with simple, intuitive platforms, to help democratize what can be a very expensive and inaccessible agency process, and to help eCommerce businesses to thrive.

Take us through the process of starting and launching the business.

I’d been running my own agency in London and was keen to develop more clients outside of the capital. A friend of mine had met my now business partner, David Solomon, at a Wirral networking event and introduced us. Dave was something of an eCommerce veteran and had already enjoyed considerable success with a number of his own online businesses.

Have sufficient cash in the bank or you’ll take on the wrong projects and drop prices.

At that point, he was helping other eCommerce business owners on a consultancy basis and was looking for a partner to help build Shopify sites. We started working straight away and opportunities kept popping up. I then asked Dave if he’d be interested in setting up a new business together and the rest, as they say, is history.

We launched the business to work solely with merchants either already on the Shopify platform or trying to migrate onto it. We believe that Shopify is by far the best eCommerce platform for the majority of direct to consumer businesses and this laser focus has helped us to grow rapidly from 2 people with an idea for an agency with a difference to a team of 16 working with some major brands. We have tripled and then subsequently doubled revenue in our first 3 years of business.

Since launch, what has worked to attract and retain customers?

Our clients come from all areas - some directly from Shopify, some through our website and a lot from recommendation, which is obviously a great position to be in. We have experimented with Linkedin which hasn’t been hugely successful for us.

We do have a new website launching in the new year and plan to build a greater marketing push behind it, but the reality is that we’ve had all the work we could manage from the start, and don’t want to overstretch and impact quality control.

I wish I could share some magic formula but in reality, all you can do is really good work that builds your reputation.

From the outset, we’ve done great work on Shopify which then led to more work and additional referrals. Because of this, we became official Shopify Experts within a month of launch - joining the Experts Directory at the perfect time as it’s now closed to further agencies.

Landing a major sportswear brand in our first year also gave us a platform and then we received Shopify Plus accreditation in 2019 which has really helped. Shopify has played a huge part in our success and since becoming a Shopify Plus partner we work closely together on large scale projects. Also, by being an official partner it adds a level of trust with potential clients and makes our sales process easier.

However, because of our relationship with Shopify we have neglected our own marketing efforts, we have done virtually zero marketing of our own business and case studies. Also, my co-founder Dave is well known in the eCommerce world after building a successfully exiting an eCommerce business, his reputation and network helped us acquire customers in the early days and still does to a certain extent. We have big plans for 2020 though and will be launching a local Shopify Plus meetup, an eCommerce podcast, investing in content marketing and hiring our first business development person.

How are you doing today and what does the future look like?

The business is in a great place - we’re working with some amazing brands, building our reputation and growing in both value and volume terms.

We now offer a fully integrated service, which helps us to extend client relationships and support them in all areas of their business - this has been pulling in bigger projects and growing the team consistently.

The future looks incredibly exciting because direct to consumer brands are increasing on an almost daily basis and Shopify shows no chance of slowing down.

We’re excited to grow but still want to continue to work on a mix of young start-ups and big established brands - because that is why we started the business in the first place.

Through starting the business, have you learned anything particularly helpful or advantageous?

We’ve made a lot of mistakes since we started out, but learned from each of them. Taking on bad projects, that we could see a mile off at the start, is by far the biggest thing that’s caused us problems. Not all revenue is good for the business, we’ve taken clients on that we knew would cause issues to help the bank balance. In nearly all of these scenarios, it has ended in disaster. If you get a gut feeling about a client at the start listen to that advice because it will end up costing you more money in the long run.

My advice would be:

  • Plan, plan and then plan some more.
  • Make sure you have enough funding to protect you from taking on the wrong projects/clients or dropping your prices too much.
  • Keep a close eye on cashflow.
  • Manage your people carefully - it really is true that your most valuable asset walks out the door at 5:30 and they have the ability to make or break a business.
  • Have resilience but also empathy - nobody has the time to call just to tell you you’re great. Keep that in perspective and don’t take it personally.

What platform/tools do you use for your business?

For projects we use Shopify/Slate, Done Done, Jira, Slack, Creative Cloud, Sketch and GitHub to name a few, but we’re always looking for ways to improve efficiency and productivity so are likely to keep exploring.

For managing the business we use Gsuite and Xero - quite simple really.

What have been the most influential books, podcasts, or other resources?

I listen to a lot of podcasts, one of my favorites is How I Built This with Guy Raz, I love hearing other people’s stories and how they got started in the business. A lot of the time from the outside looking in other businesses can seem perfect, but hearing the tough time's other founders had when starting out but they kept working hard and reaped the rewards can be really inspiring.

I like Twitter for snippets of business gold that’s easy to digest. Some key people I follow across the business, marketing and eCommerce are:

I’m also a subscriber to 2PM which covers commerce and direct to consumer fantastically well!

Advice for other entrepreneurs who want to get started or are just starting out?

Don’t give up too early - it takes time to build a business but with diligence and determination it will pay off if you have a good product-market-fit of course.

Again, have sufficient cash in the bank or you’ll take on the wrong projects and drop prices.

Be process driven from the start as it’s much harder to introduce later.

And finally, clear communication and management of expectations both internally and externally will be critical.

Are you looking to hire for certain positions right now?

We’re always looking for great people to join the business and so talented agency and eCommerce people should always get in touch. We’re looking for growth marketing specialists specifically right now and would love to hear from anyone interested in joining us before the next stage of our own growth.

Where can we go to learn more?

We have a new website launching at the end of the year to replace the current Velstar and people can also get in touch via Twitter @DanSheard or email [email protected]

If you have any questions or comments, drop a comment below!

-  
Dan Sheard,   Founder of Velstar

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