If you were planning how to start a social media marketing agency 30 years ago, there was a colossal entry barrier. The overhead of creating such an operation was daunting because of the primitive landscape. In fact, it was nearly impossible without making a huge initial investment. 

You were limited to traditional and physical media in addition to the startup costs. You could also have some headaches as you try to fabricate something that resembles a high ROI to your customers. Therefore, it was inevitable to be in red for an extended period. 

The good news is that times have really changed. Currently, even a small business can create a fully operational social media marketing agency from scratch. It can even take a few months for your strategy to begin yielding fruits. 

Currently, companies are spending a larger proportion of their marketing budget on digital advertisement than ever before. Social media is among the best alternatives because most clients spend their time on these platforms. It means that the demand for social media marketing agencies is on the rise. 

This article will give you some tips on how to start a social media marketing agency. It is one of the most effective business ideas as long as you do it right. To succeed, you need to implement the following strategies; 

The average American social media user spends 2.7 hours per day on social media

12 Tips for Start a Social Media Marketing Agency in 2020

I. Develop the Right Skills 

There are so many nuances that come with managing client relationships and accounts. Even if you are intelligent and creative, you should be experienced and prepared to handle these nuances. It can take you several years before you build the necessary skills for running a successful social media marketing agency. 

However, the period can be less depending on the investment that you out in place. It is advisable to hold down a real job for a while before you venture out on your own. The working environment is more complex than what you see in your office. 

In addition to the actual work that you produce, there are so many other expectations, politics and nonverbal and verbal communication gymnastics. Everything from the structure of the organization to its leadership, product, and culture define what unfolds daily. 

Before mastering your social media marketing skills, you should experience what it feels to work where your customers may work. It will develop you into a well-rounded and more understanding professional. When your customers get stressed and begin to project on you, you will not take it personally. 

With this in mind, you need to understand that soft skills only make up 50% of the final product which is you. You should become good at what you will be offering as a professional service. Your sales game may be so slick but the client will discover that they have a raw deal. 

How to Start a Social Media Marketing Agency

Therefore, you should have the ability to drive sales before you start a social media marketing agency. If you start your career by managing customers for bigger agencies, you can start by working on a Content Marketing team. Alternatively, you can pick a few small clients to learn the skills and channels that you will execute on. 

Working with a marketing team will help you to develop your paid acquisition skills. If you have never been to a marketing team, you will never tell what actually goes into it. Apart from the pressure and results, you need to learn complex systems. 

With a small team, you should develop several skills to get the simplest campaigns from the ground. Examples include constricting positioning and messaging, designing ads, and building landing pages. You should also learn systems like Salesforce, HubSpot, and Marketo. 

The other thing that you need to learn is the proper implementation of tracking. You should not spend several hours on a promotion just to see it fail. The other thing to learn is applying substantial pressure to produce. 

As you manage clients, you will take care of most of these things before they get to you. When you have experience of these issues, you will know what to do when something seems not to be working. You will able be able to deal with the pressure of delivering high-quality results as you have been there severally. You have to be a social media marketing expert before you sell yourself as an agency. 

ii. Be a Contractor Before You Become a Founder 

Having a job that pays as you start a social media agency comes with so many benefits. However, this is one of the things that most people take for granted. You should not find yourself in a cycle of debts before you even begin. 

So many risks come with the attempt to try and work for yourself. It is wise to make a foundation for your business before you make a decision of doing it full time. You can do some contract works on the side for some time while holding on your full-time job. 

It allows you to strike out by yourself without assuming so much risk. You will test the entrepreneurial life by beginning with it as side work. By putting aside extra money for the case to invoicing, the important elements of running a business come into play. 

The other thing you need is managing your time wisely as you are still having a full-time job. You may work over the weekends and at night at the expense of your leisure. 

As a contractor, you will build relationships that will get you referrals over time. If you can pay all your bills as a contractor, it will not be hard to make a transition into a one-person agency. The worst decision you can ever make us starting a social media marketing agency from scratch. 

When you manage customers as a side gig, you will gain experience on how to build contracts. You will get uses to putting a proposal together and signing the necessary documents. Once you streamline this part of the game, you will spend less time on onboarding new customers. 

The side work will also help you in building valuable relationships. You can get some side work by networking yourself, mutual connections, and former coworkers. It will give you enough experience on how to build and maintain customer relationships. 

Most people also overlook the skill of negotiating. Your expertise and time are worthwhile regardless of how well you understand the other individual. The skills you build here will help you to ascertain the amount to charge for a particular service or project. 

You will discover that it is an extremely valuable resource down the line. It is hard to start a social media marketing agency successfully without this knowledge. 

iii. Develop the Correct Business Model

There are so many ways of setting up a social media marketing agency. How you bill and the services that you offer will determine how you will efficiently manage your brand. Here are some of the common approaches to billing for the work that you do to your customers; 

iv. Hourly 

Most consultants prefer to bill their customers on an hourly basis. The reason is that you will be spending most of your time one-on-one with your customers. It can either be directly in person or over the phone. However, hourly billing becomes mudding over more complex and longer service offerings. 

There are fluctuations in the number of hours that you spend on every social media marketing customer. The time will continue to widely vary over time. Several factors come into play like restructuring accounts and launching and setting up new campaigns. 

The other factors include the time you spend on making calls and maintaining something that works perfectly for your customer. It can be tricky to state the exact number of hours you spent on doing something every week. 

The customer can also warry if he begins to question the amount of time you use to take certain actions. Unless part of your service is one-on-one consulting, it is wise to keep off the hourly billing model. 

v. Plat Retainer 

The simplest of all the pricing models are the flat retainer. You assess the work and time of each customer and agree on a flat monthly fee. It is a simple approach that will also help you to reduce any frictions that come with hourly billing. 

The customer knows the cost and if you meet the set targets, he won’t have a problem paying. The only challenge is when your customer scales exponentially with time. Set a contract that will guarantee that price for some time and you can renegotiate once the time is over. 

With the retainer-based model, you will be in a position to forecast your earnings. You will hypothetically see how much you will earn if you stay with the customer for 12 months. It is an essential component to business growth as you can set your goals and prepare for any setbacks.

vi. Percentage of Spend 

Social media marketing agencies love this pricing model as it factors the scalability and growth potential of the customers. Once an agency reaches a particular maturity, it will turn down customers who have no or pre-existing spend. 

It may not be the best option when you are starting out because you want to grow your customer base. Over time, you will discover that it is far more beneficial to have a larger clientele. The challenge is deciding to run your business fully on the percentage of spend.

The reason is that several internal factors within the business will dictate the budget. You have control over some of these factors but others aren’t. For instance, you have control over results but not most costs, seasonality, and internal decisions among others. If a customer spends very small amounts and you only get 10% out of that, it limits your earnings. 

It is better, to begin with, a retainer fee. Afterwards, implement the percentage of spend business model in addition to the retainer as the business continues to grow. It tells the clients that if they want to spend more and scale, making it happen will call for more work from your end. 

vii. Commission-Based

Most social media marketing agencies use this model to gain a competitive edge over others. You will only get a payment when the customer makes money off a sale. 

It sounds enticing as you will be building trust by doing everything in your power to see your customers succeed. Customers who have bad experiences say that they were spending a lot of money with no ROI or results. 

Such a gun-for-fire approach is quite tantalizing for customers who have bad experiences with agencies. However, it will be extremely difficult to bill the business unless you have great insights into their operations. 

The model can be a complete nightmare for companies that have complex sales funnel and SaaS businesses. It is more practical for clients who sell their products directly and eCommerce stores. You need to assess the volume of sales you have driven and done the calculations. 

The other downside of this approach is that it relies heavily on the product that you are selling. If the brand reports significant profit margins, then that will make sense. If not, you will be exposing yourself to unnecessary headaches. 

The best advice here is to keep it simple. You don’t want to spend much time calculation your commission with little success. choosing the wrong business model will see your social media marketing agency fail before you go too far. 

viii. Define Your Niche 

As you start out, you can easily be seduced to work with any business. Thinking of turning down a customer will course you some cognitive dissonance yet your livelihood is on the line. Some social media marketing agencies specialize in particular fields while others don’t. 

Unless you are getting several referrals, you should stand out and create unique selling propositions while approaching new prospects. In addition to specializing within a client type or industry, focusing your services on a clearly defined niche is advantageous. Some of the benefits include; 

ix. It Makes Onboarding Easy 

When onboarding customers, you should consider several variables to determine whether you are making a wise move or not. It is good when you have a clearly defined ideal customer. The process will be streamlined as you know the type of information and questions you need from them. 

Also, you will have a perspective on how the various businesses run internally. It will help you to know the amount that you should charge them on average. 

x. It Exponentially Strengthens Your Skill Set 

If you are skilled in paid social media advertising, you can run ads for almost all businesses. However, you should learn the target market and the process of formulating effective messaging. It can take more time if the business is abstract or unfamiliar with your way of working. 

If things are not going on well, it can lead to several problems. With an already defined ideal clientele, you will build a plethora of experience as you work with that type of clients. It builds the intuition and muscle memory to know the decisions that you need to make and the right time to make them. 

Having seen similar problems before, you will be able to handle them more efficiently. It will also make you proficient in recognizing customers you don’t need for your business. 

xi. It Gives you a Competitive Edge 

The internet allows so many people out there to experience success. There are so many low-quality social media marketing agencies in the market. The client will have the desired peace of mind when your agency caters for businesses that are similar to them.

You can adapt the ‘insert niche here’ type of agency as this gives you the expertise and social proof.  You will be able to address the needs of these persons and organizations confidently. 

xii. Determine How Much You Wish to Scale 

Running a social media agency doesn’t necessarily mean hiring a bunch of employees or renting out an office space. In most cases, it is one of the worst decisions that you can make. Remember you have so many bills that you need to pay. 

It is good to start by surviving personally if you want to grow. Before you start a successful social media marketing agency, you should be highly skilled at what such agencies do. When you manage accounts by yourself for some time, you will refine your skills and find talented assistance easier as you know the necessary knowledge and skills for the job. 

You should also know the financial implication of the cost for that help. When you hire an employee, it will bring in another layer of complexity. You also need to understand your client mix, the average lifetime value of your customer, and how to acquire new customers. 

It is another matter altogether to convince another person to work with you. All employees want security while on the job. Therefore, you should be able to pay them well and offer them benefits. If not, they will not have the interest to take the gig. The most cost-effective solution to this is just finding contractors. 

How to Start a Social Media Marketing Agency

The market has several people who are willing to work with you on a contractual basis. You won’t be paying any benefits to these individuals. When you delegate time-consuming and monotonous tasks to reputable contractors, it will take a huge load off your shoulder. 

It will help you to focus on other important business issues.  The method will allow you to scale to the point where it makes more sense to have full-time employees. If things go well, the contractors can decide to join you full time. Remember these are people who have already proven their competence with your brand. 

This advice will help you learn how to start a social media agency by yourself. If you have business partners, it will change the process a bit. Remember you will also split the profits and hence you may want to charge higher rates. Increase the number of clients can also lead to mutual benefits which are better than going for normal daily work. It is good to keep some of these things in mind. 

Most startups think that extreme growth is the only thing that will make them succeed. There is so much pressure to onboard new clients. You can discover that a certain number of great clients can satisfy you financially. 

It may come out clearly that rapid expansion is not in your vocabulary. Unless you have external investors putting pressure on you, the ability to lead a financially stable life in your own terms could be more enticing. 

When you run a sustainable social media marketing agency, you will have the freedom to end the business. You can make your own decisions as long as you are running the agency by yourself. You may also discover that you don’t want to run the agency for all your life. It can become a platform for investing in other businesses. It is good to do something you are passionate about even if it will take you long to develop the business idea.

After running the social media marketing agency for some time, it will give you a lot of experience in the niche. You will be able to create valuable relationships for a better future. 

Final Thoughts 

There are chances that you have already ventured out by yourself and you are now thinking about it. My advice is that you should make an informed decision and stick to it. To start a social media marketing agency is not hard as long as you follow the above tips. 

Managing a business comes with several ups and downs. You should be able to weather the storm if you want to enjoy the benefits. It is a dramatic event in life and you should just take it that way. If you feel as if you are not ready, you should not drag yourself longer than you need to. 

You will fail if you are going to make a decision that you don’t believe in. There is a need for maximum commitment and you will discover that running your own social media marketing agency is highly fulfilling. These tips will help you to learn how to start a social media marketing agency. 

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