A marketing business finds ways to sell products or services to a target audience for its clients. This can involve anything from email communication and social media marketing to driving traffic through paid advertising. This guide will help you understand how to start a marketing business, including choosing the right service to offer and writing a business plan.
What is marketing?
The world of marketing is broad and ever-changing. New digital platforms and advances in social media constantly alter the online marketing landscape. It can be fast-paced and an exciting area to work in.
If you’re thinking of starting a marketing business, you must first define what services you’ll offer. and who your clients will be. You can use a range of tactics to reach your target market. This can include tailored advertising and bespoke communication plans.
Types of marketing
- Traditional marketing: This type of marketing is called this as it was commonly used before the introduction of digital platforms. It's any form of marketing that uses offline media to market products or services. It can include print marketing and direct marketing, sending physical communications to consumers. Event marketing is also included, which can be a great way to create excitement for consumers.
- Digital marketing: The second group is digital marketing, which involves any digital activity. It includes email marketing, content marketing, and search engine optimization. Social media marketing is also a large part of this group, including paid activations.
You may decide to focus on traditional or digital marketing, or offer both.
Choose your marketing services
This is where you need to examine your skills and experience and choose the role to match. Start by auditing your skills and knowledge of marketing. Do you already have any specific qualifications? Do you have experience in the industry? If you do not, you may want to get experience working for someone else's marketing agency.
After you have assessed and upgraded your skills, you should think about what you are qualified to do. When thinking about your preferred marketing area, it's helpful to consider the following:
- Who might your competitors be?
- Who is your likely target market?
Consider which services you may want to offer. Will email marketing and lead generation be your focus? Do your strengths lie in social media strategy or management of social media accounts? If you're creative, website design might be an attractive area for you. Creating high-quality landing pages or building successful marketing campaigns. SEO content and strategy are another layer you could offer.
To focus on a particular type of marketing, consider creating a single-channel agency. For multiple offerings, a multi-channel business might be a better option. Or, if you want to become a business for all types of marketing, a full-time, full-service agency could be best.
Why start a marketing business?
So, you've chosen your marketing specialty, but why start a business? Fundamental to creating a successful business is having the expertise to offer. You should be a marketing expert. There should also be a demand for the type of services you offer, so you know you can find clients.
Running a business has its perks, including being flexible about who you work with and when you work. You are your own boss, so you can choose how you run the business and what projects you work on. It can also be a lucrative business.
Potential challenges of running a business include the competitiveness of the industry. It can also be stressful, especially as you grow and evolve. Attracting those first clients depends on your marketing efforts. You must also manage cash flow and understand how to finance your business.
Step-by-step guide to starting a successful marketing business
Now that you've decided you want to start a marketing agency, we're here to help you succeed. This is our step-by-step guide to getting it up and running.
1. Develop a business plan
A business plan is an essential first step to starting a business. This document will guide you throughout the process and is helpful if you need to talk to banks for loans or financial advice.
But how do you write a business plan? Here's a helpful template. Just a one-page plan is all you need to start. You can adapt it later as your business grows and changes.
Your plan should consider the following:
- Executive summary – an overview of your plan
- Company overview – a summary of your business
- Industry analysis – an assessment of the market you want to reach
- Products and services – details of the services you want to offer
- Customer analysis – who your customers are
- Competitive analysis – who your competitors are
- Marketing plan – what you can offer and how you will market your new business
- Operations plan – supplier details, business systems, and your location
- Team details – your team for a small business or management team for a larger company
- Financial plan – three years of planning, including how you plan to scale financially and the initial startup costs
2. Determine your business structure
There are different ways you can structure your business. Those most suited to a marketing business are sole proprietorship and an LLC. But what are the differences between the two?
- Sole proprietorship: If you choose to be a sole proprietor, you own the business, although you can hire staff. Taxes are simple, as you report everything on your personal tax return. Yet, you are the only one responsible and accountable if anything goes wrong. Choosing the right business insurance will help to safeguard you and your company.
- Limited liability corporation (LLC): Setting your business up as an LLC creates a legal separation between you and your business. That can mean legal protection. With an LLC, you can also have additional owners. There are several tax options available for LLCs, including sole proprietorship, S corp, or a partnership.
3. Get an Employer Identification Number (EIN)
4. Apply for a business license
Permits and licenses vary from state to state. They can depend on federal, state, and local requirements, as explained by Forbes. Research your options and talk to a legal advisor to help you file the proper paperwork.
5. Define your target market
Defining your target market is essential to understanding how to market your business. Are there any industries you'd like to work with? Or do you have any prior experience working with specific businesses? Not all companies, especially small ones, have money to spend on marketing. So, it might be worth considering the size of the company you want to market to.
Location is also crucial. Do you want to work with potential clients locally? Or are you happy to offer overseas support? This will also make choosing your target audience and building brand awareness easier.
6. Set up a business bank account
Whether you're finance-focused or not, you must learn how to track your business income and expenses. Opening a business bank account can make keeping your personal spending separate from your business expenses easier. It's also helpful when filing taxes and applying for credit cards.
8. Establish your startup funding
Starting a business can be expensive, so you may need to consider funding options. Initial costs could include:
- Setting up an office – expenses include rent, furniture, computers, printer
- Computer software for web and graphic design, project management, and email campaigns
- Utilities and internet
- Business insurance
As you grow, you may also need to outsource freelancers, such as copywriters and designers.
Many types of funding may be available for small businesses. These include a bank or small business loan. You may also have personal savings you want to invest in your business. Or family and friends may be willing to lend you initial funds. Crowdfunding is also an option. It can generate awareness of your venture at the same time.
9. Set your prices
Setting your prices upfront will help you to understand how to grow your business. It will also build transparency with potential customers. You want to offer options in line with your market. So, start by exploring how similar marketing businesses are pricing their services.
The following pricing models are often used:
- By hour
- By project
- Commission-based, used when performance is measured, for example, PPC advertisements online
It is a good business practice to collect a retainer before beginning work.
10. Build your brand
The next step focuses on you and your brand. What's your business name? Which services do you offer? And how are you communicating them to your target audience?
You'll need to define your brand identity with a logo and website, showing a portfolio of marketing work. Testimonials and referrals from customers can help to build trust with new clients.
11. Understand business insurance requirements
It's important to protect you and your brand by choosing the right business insurance. Some states require specific insurance. So, it's essential to understand which ones you need and which additional ones you might like.
If you hire staff, you'll need worker's compensation. This provides financial support if a member of your team is injured or sick while working for you.
Professional liability insurance works if a client loses money due to your services. General liability insurance is if your services cause property damage or client injury. An example of this might be an injury caused by your equipment at a meeting you are hosting with a client.
You may also consider business owner’s insurance. It bundles a few insurances in one more cost-efficient package. Explore what's most important to your business and shop for the best deals. Read more information about insurance for small businesses at the SBA website.
12. Market your business
Your expertise is invaluable when it comes to marketing your own business. As you might for a client, start by establishing a marketing strategy. This marketing plan should define your tactics to reach your target market.
If you already have a trusted network, word-of-mouth can help build initial awareness. Explore the social media platforms that will work best for your services. Once chosen, create a content plan for organic and paid content. LinkedIn may be one of your chosen platforms. So start by creating a business page and adding the business to your profile.
Your website is vital to communicating your brand and its values. Ensure it's optimized for SEO and shows your work with compelling case studies. If you attend networking events, business cards might also be helpful to hand out.
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Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.
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