Start A Digital Agency - Business Ideas
Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.
A digital agency’s task is to make a business reach its advertising, marketing, or technology-related goals. Anyone with enough knowledge and passion for digital marketing can start and run a profitable digital marketing agency. With the proper skill set, the right tools, and the right mindset, you can start a successful digital agency.
The global digital agency market reached a value of nearly $305B in 2020. The future growth prospects of the digital agency market are projected to be high due to the rising population of people consuming and creating content through digital channels.
Starting a digital agency requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell digital agency, or selling digital agency online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a digital agency ➜
Key Stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
|
Office Space Expenses |
$0 |
$7,000 |
|
Employee & Freelancer Expenses |
$151 |
$352 |
|
Website Costs |
$223 |
$7,215 |
|
Business Formation Fees |
$600 |
$4,700 |
|
Equipment & Supply Expenses |
$66 |
$700 |
|
App Creation Costs |
$1,000 |
$20,000 |
|
Software Expenses |
$162 |
$3,094 |
|
Advertising & Marketing Costs |
$0 |
$2,550 |
|
Total Startup Costs |
$2,202 |
$45,611 |
Case Studies
•
$22K/mo
•
$600K/mo
•
$20K/mo
•
$60K/mo
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
|
Digital Agency Network |
digitalagencynetwork.com |
14,494 |
|
|
Digital Academy 360 |
digitalacademy360.com |
21,431 |
|
|
BairesDev |
bairesdev.com/ |
36,602 |
|
|
LaRochester Digital Agency |
larochester-digital-agency.ueniweb.com |
37,157 |
|
|
SEOReseller.com |
seoreseller.com |
39,509 |
|
|
El Salvador Times |
elsalvadortimes.com |
41,715 |
|
|
Red Track |
redtrack.io |
46,207 |
|
|
Digital Marketing for Local Businesses |
revlocal.com |
72,993 |
|
|
Centro |
centro.net |
79,861 |
|
|
Corra |
corra.com |
98,242 |
|
|
Online Printing for Everyone from Digital Room |
digitalroominc.com |
99,553 |
Pros & Cons
| Pros | Description |
|---|---|
|
Flexibility |
You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
|
Ability to start your business from home |
It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning! |
|
Rewarding work |
Starting a digital agency can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about. |
|
Traffic to your website |
A digital agency gives people a reason to visit your website and to keep coming back to you! |
|
Meaningful business connections |
You never know who you will meet as a digital agency. This could be the start of an incredible business opportunity! |
|
High customer retention rates |
Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Cons | Description |
|---|---|
|
Motivation of employees |
If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees. |
|
Low margins |
The gross margins for your digital agency are typically around 20%, which can make it more challenging to incur new expenses and maintain profitability. |
|
High employee turnover |
In the digital agency, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
|
Stressful work |
This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments. |
|
High overhead expenses |
With starting a digital agency, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below. |
|
You may need to charge sales tax |
If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article |
Marketing Ideas
-
1
Affiliate Program
Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.
Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.
The affiliate typically gets a unique link where clicks and conversions can be tracked.
-
2
Direct Sales
Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.
For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
-
3
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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