I Went From Being Laid Off To Starting A $35K/Month Marketing Agency

Dan Thompson

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Published: July 31st, 2022

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About
Business

Dan Thompson

Founder, Salt Water Digital

$35K

revenue/mo

Founders

Employees

Salt Water Digital

saltwaterdigital.com

from Vancouver, BC, Canada

started January 2014

$35,000

revenue/mo

Founders

Employees

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

Hello! My name is Daniel Thompson. I am the owner of Salt Water Digital, a digital marketing agency with an emphasis on SEO, PPC and Website Development.

We serve small businesses generating between 300k and 5m in revenue.

We’ve grown from $25k/month to $40k/month in the past 8 months with a goal to hit $60k/month by the end of the year.

This is me (glasses), my business partner Steve (beard), and our web developer Jenn (gal) at Disneyland. Oh and Connor, he was part of an e-commerce brand we built and sold in 2020

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

In 2011 I was working for a research and development company that built downhole oil & gas tools. I knew I wanted to escape the corporate lifestyle but quitting my job felt incredibly risky.

So I did what many budding entrepreneurs do - build something during evenings and weekends.

I taught myself web development and SEO and built an affiliate site called ExerciseFoamrRollers.com. It got a little bit of traction and then in 2012 oil crashed and I got my big break…

I was laid off.

Businesses that NEED digital marketing to drive all of their revenue tend to be terrible clients.

Oddly, this provided me with enough financial stability to try to build something of my own. Because I was laid off I was able to collect unemployment insurance.

It wasn’t much but I didn’t need much, I had 12 months to figure things out.

I convinced my best friend to start a softball review site with me. And when that started to work we started another, and then another. Eventually, he felt he could quit his sales job, build sites with me and bartend on the side.

At our portfolio’s peak, we were generating $15k/month in revenue with a few thousand dollars in expenses.

In 2015 our affiliate sites got obliterated by a Google Update. We lost 85% of our income overnight.

We had a handful of clients and none of them got impacted, at this point, we pivoted to focus on our agency, Salt Water Digital.

Take us through the process of designing, prototyping, and manufacturing your first product.

Initially, we only offered SEO. We undercharged, our branding and positioning were terrible, finding clients was hard and we generally struggled. We worked mostly with local businesses, many of whom were struggling themselves looking for a magic bullet for their own struggles. Businesses that NEED digital marketing to drive all of their revenue tend to be terrible clients.

We added web design and PPC to help increase revenue through cross sales. As we built our book of business we were able to attract better clients.

Today most of our clients are still smaller, local businesses but generally they are producing >$500k/yr in revenue or are successful entrepreneurs working on their second business.

Our first “brand” was my local SEO which eventually got hit with legal action so we rebranded to Salt Water Digital.

If I were starting from zero I would either get on Twitter, Linkedin, Tiktok, or Youtube and grow an audience.

Describe the process of launching the business.

Our entrepreneurial path has been winding.

It started with affiliate marketing, we pivoted to building Salt Water Digital before getting sidetracked with building and selling 2 separate 7 figure Amazon FBA brands (Gold Mountain Beauty and Left Coast Performance).

And I think most entrepreneurs can relate to this story. It is rarely a straight line.

We’ve had two distinct “launches”. The first was in 2015-2016 when my business partner found agencies to partner with. They white labeled our services and we were able to grow from $0-$300k/yr.

The advantage to working with larger full-service agencies is twofold: they have much larger clients with larger budgets and they often lack experience in certain areas. This could be a decision they’ve made or it could be because they lost a key team member or two. We fill these gaps making their lives easier and because they’re charging more than we would, they still make their margins.

The two agencies that have provided us with the most work were both local to Vancouver and were a result of my business partner networking.

The other agencies we found through applying for jobs on Upwork. A lot of freelancers and smaller agencies underestimate how incredible that platform can be. If you work at it and build up your reviews and experience you can sell your services for full price (we charge anywhere from $100-$150/hr for context).

The second was at the end of 2021. In 2020 we sold our second FBA business (we sold the first one in 2017) and by the end of 2021, I had fulfilled my contract to run that FBA brand for 12 months. It was at this point that, both my business partner and I were able to invest 100% of our efforts into the agency.

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

Offering a high-leverage digital service is the least risky way to start a business.

What do I mean by high leverage? A service that helps business owners with one of two things

Free up their time
Makes them more money

These are universal pain points for every business owner.

What are some examples? SEO, PPC, Email Marketing, Copywriting. These are relatively obvious examples.

A couple of less obvious examples. Pairing business owners with overseas talent, ghost writing for Twitter accounts.

That is effectively what we do - we offer high-leverage digital services: SEO and PPC.

Our business is driven via three channels

Agency referrals. We do good work at reasonable prices. We have several agencies that white label our services. Basically, they sell the service we fulfill it for them.

This (and networking) got us for $0-$300k. These opportunities have arisen organically but if you were trying to force the matter cold calling, or cold emailing would be the tactic I would use.

Organic Twitter. At least half (probably more) of our sales calls come from my Twitter account. It is small (1,800 followers) but I create content about SEO and PPC. I am seen as an expert on that platform, so when small businesses need digital marketing help, they reach out to me. My pinned tweet generates most of our business:

embed:tweet

I started building on that platform 1 year ago it’s been incredible for us.

My partner is a member of BNI. If you are starting off and are looking for your first 5 or 10 clients this is often a great way to find them. The only problem is it doesn’t scale particularly well.

If I were starting from zero I would either get on Twitter, Linkedin, Tiktok, or Youtube and grow an audience.

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

Our agency is growing and we feel like we’re in control of that growth.

As owners, we’re paying ourselves $80k/yr each and our net profit margin after all expenses is ~17% which is growing our business bank account by ~$7,000/month.

Our current business goals are:

Increase our salaries
Increase all of our employees’ salaries
Grow from $40k/month to $60k/month.
Improve our net profit margins to 20%
Add another lead gen source. We’re currently working hard on our SEO which we’ll turn into a proper funnel.

To hit $720k/yr we will need to add one more team member. That will give us a team of six at which point we want to evaluate our “why”. We might target $850k/yr or even $1m but at what cost? And to what benefit?

Do we want to remove ourselves from the day-to-day campaign management and sales? More money = more clients = more headaches. At what point is enough, enough? I really don’t see us growing beyond a team of 8 which I think will limit us to ~$1m/yr.

I think a lot of new business owners go into a new venture and think “I want to grow this to XXm/yr” without really thinking through the downside.

If you’re starting a business or maybe you’re a freelancer and are thinking about moving towards an agency model reflect on this.

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

The sooner a business can find what channel will drive sales for them the better. That may be SEO or PPC. It could be Twitter or Tiktok.

This was true 10 years ago and it’s still true today. Gary Vee built a wine empire on Youtube 12+ years ago.

Want to start a DTC ecomm brand? Tiktok Launching a digital marketing company? Twitter.
Want to earn a living by teaching others? Youtube.

What platform/tools do you use for your business?

Notion is our workspace. We use it to keep our to-do lists organized and accessible. We keep project details in it. We use it as our CRM. It’s an incredible (free) tool.

Calendly for booking sales calls.

Twitter for generating leads.

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

I read a lot but have a hard time thinking of books or podcasts that have had a great influence on me. It’s more about the culmination of all the books, podcasts and content I’ve consumed that have influenced me.

But if I had to name a few:

Ryan Holiday. I’ve read all of his stuff. The best is probably the obstacle is the way. He is a great example of a classic overachiever and a striver trying to figure out “what’s enough”.

Steven Pressfield: The war of art. I’ve read this several times.

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

I think there is a misconception that starting a business is the fastest way to wealth creation. We’ve been lucky we hit a couple of homeruns with our e-comm companies but I’m resigned to the fact that we’re not going to get rich off of our digital marketing agency. It’s a slow, methodical grind up the mountain.

Start a business because it’s calling you. Because you can’t do anything else, not because you think you’re going to get rich.

Are you looking to hire for certain positions right now?

As of July 8th we aren’t currently hiring but we will be hiring soon. We’ll be hiring either a PPC or SEO analyst. If you’re a new grad or want to get a foot in the door in digital marketing we’re a great shop to work for because you’ll be exposed to both SEO and PPC.