Marketing is a very competitive sector and many digital agencies fail. Very few of the hopeful startups reach the five-year point. While it can be enticing to see yourself succeed, the first years of a new business can be the most time-consuming. You can expect to work more than you ever will in a regular job before things get up and running.
The Challenges
There are thousands upon thousands of digital marketing agencies, all trying to get the same clientele. All of them experience the same challenges. When you fail to address these, you risk losing it all and closing the business shortly after. Here are some reasons why many agencies fail:
Trying to Service Everyone
Many starting agencies want to offer their services to a wide range of clients. In some way, it makes sense because you’re able to capture more leads, in theory. The problem is that clients are often looking for specific skill sets and knowledge. If your knowledge is too broad, then they’ll always choose an agency that best fits with their company.
Lack of Sustainability
Cash flow is one of the issues in maintaining a marketing agency. Even if you land big projects, you’ll have to work on the job until you finish the contract before you get paid. Many big companies will only pay you money after you complete the contract. Due to this, you may want to avoid targeting Fortune 500 companies until you have enough money.
Staff Inefficiency
Scalability is an issue that many agencies encounter as they’re trying to grow. Trying to take more opportunities will reap more profits, but you’ll need a team to sustain the work you do. Inefficiency is a big issue. Even if you have several marketing experts, some may work better on specific projects than others. You could take a project thinking your team can handle it only to be rushing the deadline.
No Data
Many digital marketing agencies don’t realize that it takes a lot to keep the company running. They take on projects and work through each day only to discover that they’re losing money. Data is vital in any business endeavor and companies should always be on top of their expenses. For this reason, many agencies fail as they struggle to keep a good record of their financial information.
Avoiding the Pitfalls
Now that you know why agencies are failing, you can take steps to ensure that you don’t encounter the same problems. Here are some things you can do to help your agency as it grows to become self-sustaining:
Start Small
Many successful agencies started with SMB marketing. Servicing small to medium-sized owners isn’t taxing on the resources and the payout is much faster. You’ll find it easier to scale as these businesses aren’t looking to expand rapidly. You won’t have as much money when you start, and lucrative projects that pay faster will be essential.
Find a Niche Where You Can Flourish
Many businesses today are looking for experts in their fields. A B2B manufacturing company would prefer working with a specialist team. A careful examination of what businesses are looking for and opportunities will help you survive. You can also try to integrate your interests to work within an industry you understand.
Keep Track of Your Data
From the first month of launch, you should have complete details about your cash flow. Your documents should answer where your money goes and where it’s coming from. That way, you’ll understand if you need to lessen spending to avoid losing money fast. It will also help you examine if a potential project is profitable for your company.
Work With Your Employees Strengths
Your employees will be good at different types of marketing, and you can leverage their strengths. For example, if you have people who are knowledgeable and skilled with video marketing, you can promote video marketing services more as they are in demand. The same goes for other skills like content, PPC, email, etc.
Maintaining What You Have
Once you get to a point where you’re profiting with your digital agency, the challenge now becomes maintaining what you have. You’ll have to keep your team happy and address their concerns so they’ll stay with your business longer. The same goes for your clients. You’ll also need to prepare to scale up as you get more business.
The good news is you don’t have to do everything yourself. Getting experts can give you the workforce needed to help sustain everything. Eventually, you’ll reach a point where you won’t have to work so much to keep the business running.