The past decade has brought a tremendous shift in consumer habits. Advances in technology have given more and more people access to the Internet, allowing them to find, connect and interact with businesses more than ever before. The dark ages have passed, and growing businesses are moving full speed ahead into the digital universe. Still, many of them need a little help.

Small- and medium-sized businesses need to optimize their digital presence, but they’re often at a loss of how to do it. Without the resources to hire and maintain a marketing department of their own, they turn to digital agencies as the professionals that can help them achieve results.

This has spurred massive growth in the digital marketing industry, and not just for the big guys. Small agencies and startups are attractive to local businesses who are looking for a specific skill set or someone that understands the challenges of growing a small business in a local community. They also know that some of the best talent doesn’t get sucked up by big companies.

This has made it possible for small-scale operations to emerge, sometimes with just one person and a makeshift home office behind the genius of an agency. However, when you’re great at what you do, opportunities for growth are going to present themselves. In this Agency Framework article, we’re going to discuss how successful digital agencies are born and the paths they take to growth.

The Birth of an Agency

So, how is a digital agency born? Occasionally, an agency is born as the brainchild of a larger operation, but often it’s just one or two people with the ability to identify a need, the talent and drive to meet the need and then just the right combination of creative and business genius to fuel their growth.

Many people that take the leap to step out on their own don’t have the immediate resources to hire a team, or even just one extra employee. Instead, they take on the whole of the operation until they feel confident and secure enough in their business venture to consider bringing others on board.

“I started Local SEO Search in 2013, when I recognized an untapped market segment: Local Canadian businesses didn’t know how to develop the techniques necessary to be found organically on Google and other search engines. I started as a one-man operation; after a few months, I had to expand my team. There was an unexpected, immediate influx of demand for the service.” – John Vuong, Owner of Local SEO Search, Inc.

“Regex SEO was started in 2016 by me and my friend with $0 in the bank. I was responsible for all production, he was responsible for all sales.” – Dmitrii Kustov, Internet Marketing Director at Regex SEO

“The agency started as a freelancing gig for myself and my business partner Chase separately. We were doing our own gigs and would help each other out with different facets of digital marketing (he’d assist with social, I’d assist with SEO). After a while we realized our skill sets complimented each other’s, so we combined skills and clients and hence unknowingly started the roots of an agency.” – Ryan Klein, Owner of Market My Market

Challenges Along the Way

Starting and running an agency is a tremendous amount of work, and while startups of all sizes have challenges, for single person agencies those challenges can quickly build upon each other to the point that they seem insurmountable. This is because the biggest challenge of all for single operator agencies is that they’re only one person who can only do so much.

For example, a sole proprietor might start out small, offering their services to only a select few; however, as word of mouth expands the size of an interested client base, it’s no longer just about providing that one service they’re great at:

“Sachs Marketing Group started by accident. I never intended to create a digital marketing firm. I ran into a guy whose business was failing because no one could find his website. I told him I could help, and he became my first “client.” From there, word of mouth recommendations brought me more and more clients. At some point, I realized I couldn’t do all the work myself, so I hired my first marketing assistant and rented two desks in a friend’s office. That first employee is still with our firm today.” – Eric Sachs, CEO and Founder of Sachs Marketing Group

Small agencies almost always eventually come to the point where their lack of resources makes it impossible to grow. This could be something as simple as not having enough bandwidth to take on additional clients, or clients asking for or expecting services that a sole proprietor or small team might not have experience in.

For some small agencies, what they have is enough. They’ve narrowed in on their focus, and they’re comfortable maintaining their current client load without thinking about what’s next around the corner. However, for growth-minded digital agencies, taking the giant leap of bringing new team members on board for your agency is unavoidable.

The First Hire

Is there anything more nerve-wracking than trusting the agency that you’ve invested so much sweat and tears into in the hands of someone who not that long ago was a complete stranger? Welcome to the world of growing your agency.

Making your first hire is a tremendous step for you and your agency. It signals that you’re on an upward projection of growth. Still, many agencies are unsure about when is the best time to grow their agency and what type of professional should be the first one they bring on board.

The answer to this question requires sitting down, looking at where your growth opportunities are and assessing what’s preventing you from reaching them at your current size.

For example, if you’re skills are highly specialized in video production, you might be spending more time managing accounts and keeping finances straight than someone with experience in those areas of business would. Every minute that you’re spending inefficiently taking care of tasks is time that’s being pulled away from clients. Likewise, you might be so invested in providing the highest level of service to your existing customers that you have no time left to promote your agency. In this case, a salesperson might prove to be a great investment as a first hire.

Some small digital agencies also take advantage of contractors and freelancers to help fill the gaps in their workload and service offerings as they strategize their plan for growth. This can be a great way of meeting growing client demands while not overcommitting yourself to hiring a team that you might not want or be able to financially support in the long term, at least not yet.

“We are still a small company, but with the ability to scale to nearly any size project. Henry Schneider serves as the lead on productions while Dan Jagunich handles much of the day to day business and post-production. We rely on a close network of sub-contractors to bring the right people to each project.” – Henry, Schneider, Director/Producer and Owner of Open Window Productions

“We are a core team of six and we work with 2-4 contractors at any given time.” – Andrew Peluso, Marketing Director at Websauce Studio

“Our company is about 10 people now, with various freelancers utilized on different speciality projects such as animators, stedicam operators, editors, etc. It took me and now partner/Dad, Chris, several years to get where we are now.” – Alex Cascio, Founder of Vibrant Media Productions

Strategies for Scaling Up

It’s important to recognize that the success of your agency isn’t just about growth, but rather scale. There’s plenty that you can do to “grow” your agency, but that’s not necessarily the goal. Scale is about increasing revenue at a steady rate while also increasing your resources at an incremental rate that fuels growth but doesn’t detract from the bottom line. This is often a difficult equation to compute.

Which comes first, the need or the resources to facilitate the need? This is just another version of the classic chicken or the egg question. What agencies need to be focusing on when scaling up is quality and keeping the best interest of the agency as the priority over pure financial growth.

For example, is your agency receiving more requests for a service that you don’t currently offer or have the resources to compete in that niche? Then, considering adding a person who does have those skills and the time to devote to that specialized offering can add value and generate growth for your agency.

It’s also acceptable to wait a bit and test your limits before bringing on new talent, but just don’t overload yourself to the point that clients are suffering from your procrastination to bring on someone to help with the workload.

Here is how a few of our agency partners found the right balance and learned how to successfully scale their agencies.

Take, for example, this agency partner that learned from experience:

“I can’t say we scaled intelligently. It was many trial and error work until we figured out how to do it properly.” – Oguz Konar, President of Local Marketing Stars

Or these partners who have refined their approach to scaling their agencies:

“Trying to focus on specific industries, platforms and services that we can be really great at rather than trying to grow too big too fast and trying to be too many things to too many people. We pride ourselves on our customer service and want to be sure that we are staffed appropriately to make every client feel like they are the only one.” – Jeannine Richard, Director of Digital Services at Wakefly

“We’ve definitely had a learning curve, but now we do not take on more than we can handle. That’s number one. We are pickier with the clients we onboard and we are growing slowly, but wisely. Continuing to educate the team, since marketing is always evolving, is important and so is enjoying life. For us, it’s not about growing the fastest. We value flexibility and we work on staying grounded. That being said we collaborate well and we are extremely picky about whom we hire. For us, it’s more about having a cohesive, happy, productive team than scrambling to make the most money.” – Nancy Deol, CEO of HeartBrain Marketing

And finally, a few jewels of wisdom:

“Hiring the right people is the key. People who are willing to be not just employees but are willing to truly become the part of a growing company. Pains and all.” – Dmitrii Kustov, Internet Marketing Director at Regex SEO

“Managing scale intelligently requires strategy, flexibility and agility. We have suffered from “too much success too quickly” in the past but mitigate that (happy) situation now with a core group of freelancers, account directors empowered to do what needs to get done quickly, reducing internal bureaucracy, and setting up systems so that we can anticipate success (or increased demand) in a way that makes it less a surprise and more of an expectation. A part of this is cultural, building an internal culture that is ready for success, and a part of it is systemic, with different teams always ready for more work, and showing that more work is a sign of success for everyone.” – Arjun Basu, SVP Product at Bookmark Content and Communications

Need Help, But Not Ready to Hire? UpCity’s Reseller Services Can Help.

We understand the challenges of building and scaling a digital agency for success. There will be stops along the way when you’re almost ready for the next step, but you just aren’t quite ready to take the leap. Keep the forward momentum going for your digital agency by contacting UpCity and letting us connect you to the Reseller services that can help. Be smart about growing your digital agency and contact UpCity to learn more today.

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