How to Write a Business Plan for Your Digital Agency?
If you’re looking to breakthrough in the digital marketing world, you need a solid digital agency business plan.
There are no secret tricks, shortcuts, or techniques to help you accomplish this. It’s going to require a team effort, hours of forethought, and an agile mindset to do it right. If you aren’t prepared to get your hands dirty with research and cold, hard numbers, you should rethink your plans to start a business.
If that hasn’t scared you away, then it’s time to get to work. While we can’t do the work for you, we can provide you with a marketing agency business plan template to follow. Take these broader strokes and carefully consider how each category applies to you and your future team.
Step 1 – Define the Business
When creating your digital agency business plan, you need to ask the core questions. When it comes to the business itself, you should be considering:
- What is the business?
- Who is it for?
- Why does the business exist?
- Where will you market and sell your services?
- How will you make all of this happen?
When it comes to defining your new digital marketing agency, you want to focus on the who, what, and why of the matter.
Making money is not a sufficient reason as this is the primary purpose of all businesses. Making a profit is not enough of a motivator to guarantee that your agency will succeed.
The services offered by a business are also not what defines a business and what helps it succeed. There are thousands of digital marketing agencies available. In an industry where location is ultimately irrelevant, you need to offer your customers something more than paid ads, content, and SEO.
A digital marketing agency exists to solve the unique problems that businesses face when striving for growth and customer connection. Your primary business goal should be aligned to help your target audience solve the specific problems they face that may or may not be unique to other potential audiences.
To help gain a better understanding of what your new digital agency business is and why it exists, you’ll need to perform the following:
- Name the business
- Create a mission statement (why does the business exist and who are we helping)
- List your company’s defining values and motivators
With a better visualization of your company’s goals and values, you’ll then have a framework to start building. To achieve your vision, you’ll need to consider the individuals you’ll need to partner with and hire to make it all possible.
- Define the management hierarchy and their titles/responsibilities
- Company structure for future employees
- Expected salary/benefit structure for each employee hired
When it comes to your employees, you shouldn’t plan for just the initial hire. The talent you’ll want to acquire is already active in the industry and will be looking for competitive compensation packages that scale with their time invested.
You don’t want to start your new digital agency out with a high turnover rate, so you should plan out scaling compensation over years 1-3. Not only will this give you an accurate view of your payroll expenses, but it will help you with the hiring and onboarding process.
Step 2 – Define the Customer
Like any business, your digital agency can’t survive without a steady flow of new clients and customers. However, you’ll benefit more from targeting a specific, ideal customer that happens to benefit most from your business specifically. The more refined your planned targeting is, the easier time you will have landing new sales when the time comes.
Thankfully, we already started this process by defining your digital agency’s reason for existing in step one. You should already have a specific audience in mind, whether this happens to be:
- Individual persons / self-employed individuals
- Small businesses
- Other marketing / SaaS companies
Your ideal client doesn’t have to be confined to any of these suggested categories. However, you can already begin to understand how our business plan will change depending on whom we intend to primarily serve.
Not only should the company service platform be designed for that customer, but it will define our sales and marketing efforts in future steps.
Bonus – Define Who You DON’T Want as a Customer
A strong digital agency business plan will also benefit from defining those who will not benefit from your offerings.
Of course, you need not list the obvious. Your digital agency will provide little to no assistance to the average working consumer.
Instead, you need to eliminate audiences early that may be tangentially related to your offerings. For example, DashClicks exists to serve other digital marketing agencies, SaaS companies, hosts, coaches, and directories. While small businesses can benefit from digital marketing services, they are not our primary clientele based upon our decided business plan.
This allows us to better engineer our offerings package as well as our digital advertising and sales efforts. With a clear vision of our ideal customer, all of our business efforts trend in that direction. We avoid wasting time, effort, and expenses on leads that aren’t truly aligned with what we have to provide.
Do the same with your business plan. Know who you want to do business with and whom you want to avoid.
Step 3 – Define the Services
While you’ve likely generated an idea of what your digital agency’s services will look like, it’s time to nail down definitions.
For this step of your marketing agency business plan, you’ll want to address the following:
- What are the core service offerings?
- What type of talent will you need to hire to sell these services?
- What will it cost for your company to provide these services?
- What can/should you charge for these services?
- When can your business expect to turn a profit?
Going through each potential service step-by-step should naturally help you curate your company’s unique offerings. If your cost-benefit analysis determines that service will cost more than you can expect to earn, you may need to eliminate it from your platform. Alternatively, you can choose to postpone that offering for now and revisit the matter a year from now.
Each service your agency provides should be critical in helping your target client solve the problems they face in business. This may also help you realize services you need to include that you have not already considered.
You may choose to position your agency to specialize in specific services or to offer a comprehensive, complete package. Agencies around the globe find success with either strategy. As long as your services align with your company’s mission statement and work to satisfy your desired client, you will be golden.
Step 4 – Defining the Sales Process
Thus far in our digital agency business plan, we have:
- Defined our new digital agency
- Identified our ideal customer
- Curated a cost-effective service platform that serves our audience
With these factors, we have nearly realized a legitimate digital marketing agency. We now need to consider how the team will approach selling the brand to audiences and acquiring new customers to reach our monetary goals.
For starters, your business plan should clearly define the strategies you intend to use to approach both new leads and established clients.
While it’s true that each customer will have unique qualities, laying out a defined approach or pitch will provide a higher success rate and help employees stick to the company vision.
Because not all new leads typically buy right out of the gate, you’ll also want to lay out your strategy for nurturing prospects.
Remember, you’re not writing out a guarantee nor is your suggested process set in stone. Nevertheless, you’ll need a proof of concept regarding how you intend to obtain new clients if you want to sell your digital agency to others.
Something that can help you define your sales approach is conducting a detailed competitor analysis.
Scout out other digital agencies that will be your direct competitors and determine what strategies they use to attract and secure new clients. Find ways to incorporate tried-and-true techniques into your plan, but do so in a way that adheres to your vision.
Clearly Define Your 1-, 2-, and 3-Year Sales Goals
With your sales strategy defined, you’ll now want to create a predictive sales forecast for your digital agency. Every new business is unique, so you’ll want to work together with your partners to create realistically achievable sales goals for years 1-3.
It’s expected and virtually a guarantee that profits will be low during startup. That’s why it’s important to project sales growth over time with supporting data.
When outlining your business plan, you should be able to estimate target sales revenue goals as well as a profit margin that slowly increases with time. You must be able to prove to yourself and investors that your brand will be able to operate, market, and sell services in a way that spawns steady, predictable business growth.
Step 5 – Your Marketing Plan
Another major business expense will be your digital agency marketing efforts. Every business has an expected cost-per-acquisition (CPA) and you’ll want to define yours now.
You’ll get a better idea of how much it costs to market your brand once you decide which channels you aim to utilize. Because you’re in the digital marketing business, you should be aware of your available options:
- Paid ads
- Paid search
- Organic search (SEO)
- Social media
- Content marketing
However, you may want to consider additional forms of advertising including print advertising. You may also wish to create your Affiliate marketing program, providing incentives to existing clients in exchange for marketing assistance.
The marketing section of your business plan should not only include a cost-benefit analysis but should fully detail anticipated strategies for each channel. Not only will this serve as your proof of concept, but will serve as the instructional guidelines your employees need to execute and achieve your marketing goals.
Step 6 – Financial Analysis and Summary
Throughout our entire digital agency business plan, we’ve set out to define our business, our services, our customers, our sales strategy, and our marketing approach.
With all of this accumulated data, we can create a full-fledged financial analysis of:
- Cost to startup
- Cost to operate
- Office expenses
- Cost to acquire new customers
- Cost to retain existing customers
All of this data can help us determine the digital agency’s expected yearly gross revenue, and, therefore, the expected gross and net profit. As briefly mentioned before, you’ll want to set numerous short-term and long-term goals for each category.
Consider setting goals for expected customer acquisitions and revenue for each quarter and each year. This will help to guide business behavior and alert you to potential problems with your business plan if you fail to achieve said goals. Failure to reach expectations can either be an indication of internal issues or that your set goals are unrealistic with the existing market.
Either way, you’ll be able to make smart, data-driven changes as long as you have goals that allow you to respond quickly.
Your Business Plan Can and Will Change!
The final thing you should take away from this digital agency business plan template is that none of your writing should be fixed. A rigid, inflexible mindset is almost guaranteed to spell a quick doom for your new startup.
Your desired audience may not be your best choice. Your service package may require changes to net more revenue. Your overall business goals may change as you acquire more experience with new partners, employees, and clients. Even uncontrollable global or economic factors can suddenly shift the way you do business forever.
What makes a successful business is not nailing it on the first try. Rather, it’s the ability to intelligently plan for the future, anticipate problems, and remain proactive to changing landscapes as opposed to being reactive. Regardless of what happens, your company should always fall back to its core values and remember that its objective is to serve others and help them solve their issues.