Most digital marketing agencies started off by bootstrapping, the process of starting a business by financing it personally. This usually means investing personal savings or borrowing funds from friends and family. Many will turn to this option when banks will not issue loans without a successful track record, or when they don’t have big investors.
Because of the nature of digital marketing, bootstrapping is a popular way that many entrepreneurs begin. Dubai-based Fresh Engagements is a prime example of a successful digital marketing agency that started with limited funding. They started in 2015 with only a small roster of clients. In an industry that is already so saturated with competition, they managed to find ways to increase their clients while continuing to deliver results.
However, this isn’t always the case for digital marketing agencies. The reality is many fail, and it’s not always because they don’t do good work. It’s not just skills that matter, it’s also the ability to sustain a business on a small amount of bootstrapped funding. Success isn’t overnight and you need to be able to tread the waters until you build momentum.
There is no better way to learn, than by example. We asked the team at Fresh Engagements to share what they found to be the top things you need to do to find success while bootstrapping a startup digital agency.
It’s important to note that bootstrapping any business is not easy. However, the rewards and opportunities it provides you with outweigh any hurdles. When you don’t have investors to answer to, you find yourself with a lot more control and freedom to make decisions.
It also gives you a built-in discipline and accountability to yourself because your funding is personal. This means you’ll likely find yourself more driven to tap into your competitive advantages in order to produce revenue. There are so many agencies that open with big money behind them. However, they don’t all last in the long term.
Every business needs to be financially smart, especially when they are just starting out. Digital marketing agencies have a unique challenge when it comes to this because of the industry itself. Many of your employees or team members might be used to the frills and fun that many tech companies out there offer. Don’t fall into that trap, and rather set expectations from the beginning. Working at a startup means building something from the ground up.
Having the latest and greatest in amenities and even technology might not always be possible. Perks don’t make the job, and technology doesn’t always make the creation. There are many things you can do to make smart financial decisions while still building a successful agency. Fresh Engagements made the decision from day one that their team works remotely. This not only saves them in real estate costs but also allows them to attract talent from around the world.
When you’re just starting out, every client counts. But at the beginning, there’s a difference between finding a client and finding the right client. Bad clients can be your downfall. They can create friction amongst your team and potentially pose problems when it comes to billing. You want to instead focus on attracting clients that are easy to deal with and most of all understanding that you’re a startup.
This can be one of those lessons you just need to learn. When you’re trying to build your agency, it can be tempting to snag any client you can find. However, it’s important for you to remember that as much as you need to deliver as a vendor, they do too as a client.
Fresh Engagement’s biggest piece of advice when it comes to this, is to learn how to spot a difficult client immediately. Not only will it save you from having to deal with them, but also having to drop them as a client. A red flag to keep an eye out for would be scope creep or being pushed to deliver more than what you were hired for. Also, if a client starts out the relationship by trying to negotiate your pricing, you might want to reconsider if they value your work.
A bootstrapped startup will generally find itself running with a lean team. However, there are just as many tasks to accomplish as any digital marketing agency. Instead of putting the majority of your capital into hiring multiple employees, you can instead invest in a few key people who will grow with you. So not only do you want to hire employees with a good work ethic you should also try and attract talent with diverse skills.
Another benefit of starting off with a smaller team is that it encourages collaboration. This builds a group of people that learn to work well together and helps them understand how they all contribute to the overall organization. As your agency grows and requires more employees you already built the foundation you need to develop a management team.
One thing many startups drop the ball on is creating strong onboarding materials from the start. But there is truly no better time to develop manuals and training materials than as you’re building your agency’s foundation. Creating these process manuals will also help you keep everything streamlined and consistent especially if you’re a one-person operation.
As you’re ready to start hiring a team you’ll already have documentation in place to train them on all aspects of the role. And as your team continues to expand, your first set of hires can take over the onboarding process for you. A few things Fresh Engagements recommend including onboarding materials are checklists for content creation, client management, IT and HR procedures, and accounting practices.