How to start a marketing agency: the first 90 days, and the numbers behind them

How to start a marketing agency

To start a marketing agency, choose one service for one kind of client, set up the business so it can sign contracts and take payments, price the service from your costs, win a first client from people who already know your work, then document what you did before you add anything else.

Most guides to starting an agency are lists of steps. The steps are right, but they rarely say what anything costs, how much to charge or how many clients it takes before the agency pays its founder. This guide follows the same order and adds the numbers.

The first 90 days of a new marketing agency

1. Weeks 1 to 2Choose one service for one kind of clientPick the service you can deliver best, or resell with confidence, and the kind of business that buys it.You should haveA one-line offer: what you do, for whom, and the result it aims at.
2. Weeks 2 to 4Set up the businessBusiness structure, tax ID, bank account, insurance and a contract template, in that order.You should haveA business that can sign a contract and take a payment.
3. Month 2Price it and find the first clientWork out the price from your costs and the margin you need, then go to the people who already know your work.You should haveA price you can explain, and a first client or a shortlist of prospects.
4. Month 3Deliver, document and decideDeliver the first project, write down how you did it, and decide what to add next.You should haveA documented process, a result you can describe, and a decision on the second service.

Step 1: choose one service and one kind of client

Choose one service you can deliver well and one kind of business that buys it. A narrow offer is easier to explain, easier to deliver consistently and easier to build a reputation in. Copyblogger’s guide makes the same point as its first step: select one service for one industry.

The test of a good first offer is whether you can describe it in one sentence that a prospect would repeat: “SEO for dental practices”, “Google Ads for home services”, “websites for architects”. If the sentence needs the word “and” more than once, the offer is still too wide.

Choosing the service

• Start from what you can prove. Work you have done before, for an employer or for yourself, is evidence a new client can check.
• Prefer recurring work. A monthly retainer pays the next month’s bills; a one-off project has to be sold again.
• Check the demand. Search volume for the service and the client type, and the number of agencies already selling it, tell you whether the market exists.
• Know the delivery cost. Whether you do the work or a partner does, you need to know what one client costs to serve.

Choosing the client

Choose a kind of business you understand, that can afford the service, and that has a reason to buy it now. A business that already spends on marketing is easier to sell to than one that has never paid for it, because the question is who to buy from, not whether to buy.

Step 2: set up the business

Set up the business before the first contract, in a fixed order: choose a structure, get a tax ID, open a business bank account, buy insurance, prepare contracts and set up payments. Each step depends on the one before it.

Step	What it involves	Official source
Business structure	Sole proprietorship, LLC or corporation. The SBA says an LLC protects your personal assets from the business’s debts and lawsuits in most instances	SBA, Choose a business structure
Tax ID	An Employer Identification Number from the IRS, free and issued online. Form an LLC or corporation with the state first	IRS, Get an EIN
Bank account	A separate business account, so business and personal money never mix	SBA, Choose a business structure
Insurance	General liability, and professional liability, which the SBA describes as covering loss from errors and negligence for businesses that provide services	SBA, Get business insurance
Contracts	A client agreement and a statement of work for each project, plus partner agreements if you resell	Your own lawyer
Payments	A way to invoice and take cards. Stripe’s standard fee for domestic cards is 2.9% + 30 cents per successful transaction	Stripe, Pricing

SBA, Choose a business structure; IRS, Get an EIN; SBA, Get business insurance; Stripe, Pricing. US rules; other countries differ.

Business structure

In the US, the Small Business Administration explains that you are automatically a sole proprietorship if you do business without registering any other structure. That is the simplest start, but it gives no separation between the business and you. The SBA says an LLC protects you from personal liability in most instances, so your vehicle, house and savings are not at risk if the LLC faces bankruptcy or lawsuits. It also notes that rules vary by state and suggests confirming the choice with a business tax specialist.

Tax ID and banking

The IRS issues Employer Identification Numbers free, online, and says that if you are creating an LLC or corporation, you should form it with the state first, or the EIN application may be delayed. With the EIN, open a business bank account; the SBA notes that keeping business and personal funds separate is part of what gives you limited liability protection.

Insurance

The SBA’s insurance guide lists general liability insurance for any business, and professional liability insurance for businesses that provide services to customers, which protects against financial loss from malpractice, errors and negligence. For a marketing agency, professional liability matters most: the risk is not that someone trips in your office, but that a client blames your work for a loss.

Step 3: price your services

Price your services from what they cost you to deliver, the time you spend on each client and the margin you need, then check the result against what the market pays. Starting from a competitor’s price, without knowing their costs, can leave a new agency busy and unpaid.

What the market pays

Published surveys give a starting point. In Ahrefs’ poll of 439 SEO providers, agencies charged $3,209 a month on average and consultancies $3,250, and the average hourly rate was $111. For other services, the pricing pages on my white-label price list show the market rate for each, with the source and the arithmetic.

What you need to charge

A price has to cover four things: the cost of delivering the work, your own time managing the client, the fees on taking payment, and your margin. Stripe’s standard fee for domestic cards is 2.9% plus 30 cents per successful transaction, which on a $3,250 invoice is $94.55. Small amounts like this add up across every client and every month.

• Delivery cost. What a contractor, an employee’s time or a white-label partner costs for one client.
• Your time. Sales calls, briefs, reviews, reports and answering questions. Count the hours and price them.
• Fees. Card and bank fees, as a percentage of the price.
• Margin. What is left to pay you and to cover the months between clients.

Margin and markup are easy to confuse when quoting, and the difference is explained in markup vs margin. The markup calculator has a resold-service mode that adds your own hours and fees and gives the price that leaves the margin you want.

Step 4: work out how many clients you need

Before looking for clients, work out how many you need. Divide what you need to earn each month, plus your fixed costs, by what each client leaves after its delivery cost and fees.

Enter what you need to earn, your fixed costs, and the price and delivery cost of one client.

What you need to earn a month$Fixed costs a month (tools, insurance, accounting)$Price per client a month$Delivery cost per client a month (wholesale or contractor)$Payment fees%

What each client leaves you a month

$1,502.50

Price – delivery cost – fees

Clients needed

4.3

(Pay + fixed costs) / what each client leaves

Monthly revenue at that number

$14,060

Clients x price

Hypothetical defaults: the price is the Ahrefs average for SEO consultancies and the delivery cost my own white-label wholesale price for the same work. Your own time on each account is not counted here; the section below adds it.

At the defaults, each client paying $3,250 a month, with $1,650 of delivery cost and 3% fees, leaves $1,502.50. To cover $6,000 of pay and $500 of fixed costs, that is $6,500 / $1,502.50 = 4.3 clients, so in practice five.

Adding your own time

The calculator leaves out your own time on each account, because it is already counted in what you need to earn. But time is the limit. If each client takes 6 hours a month of your time, five clients take 30 hours, before any selling. That is why the number of clients a founder can manage alone, not the number of prospects, is often what caps a new agency.

Change the price and delivery cost to see how sensitive the number is. A $500 cheaper price at the same delivery cost needs noticeably more clients, which is the strongest argument against starting cheap to win business.

Step 5: find your first clients

First clients often come from people who already know your work: former employers, colleagues, clients from a previous job and businesses in your network. They trust you before the agency has a reputation, which is the hardest thing for a new agency to get.

• Tell your network, specifically. “I am starting an agency” is easy to ignore; “I do SEO for dental practices, and I have room for two this quarter” is easy to pass on.
• Show the work. Case studies from previous roles, with the employer’s permission, or results from your own site.
• Write about the problem. Articles that answer your client type’s questions bring in people already looking.
• Partner with adjacent agencies. A web design studio gets asked for SEO; an SEO agency gets asked for ads. Referral and white-label arrangements work both ways.

Once a prospect is interested, the discovery questions, the opportunity sizing and the proposal are what close the sale; for SEO, they are set out in how to sell SEO.

Contracts before work

Sign a client agreement before starting work, with a statement of work for each project. It should cover the scope, the price and payment terms, what happens if either side ends the agreement, who owns the work and the accounts, and confidentiality. If you use partners, your agreement with them needs confidentiality and non-solicitation terms, explained in the guide to non-solicitation agreements.

Step 6: decide what to deliver yourself and what to white-label

A new agency rarely has every skill its clients ask for. When a client asks for something you cannot deliver, you can learn it, hire for it, refer the client or white-label it. The right answer depends on how often clients ask and how much you want to own the work.

Situation	What to do	Why
You are good at it and clients ask for it	Deliver it yourself	It is the agency’s reason to exist, and the margin is all yours
Clients ask for it, you cannot do it well	White-label it	You keep the client and the relationship, and learn the work by managing it
Clients rarely ask for it	Refer it	A partner relationship is not worth setting up for occasional requests
It needs a licence or regulated advice	Refer it	Legal, financial or medical advice is not marketing work

White-label delivery means a specialist does the work and you sell it under your agency’s name. You keep the client, set the price and manage the relationship; the specialist delivers unbranded work to you. How the arrangement works across services, and the platform and data rules that apply to it, is set out in what white-label marketing is.

The risk to manage

The risk of white-label delivery is selling work you cannot judge. If a client asks why a ranking fell or why a campaign changed, and you cannot answer without asking the partner, the client will notice. Start with a service close enough to your own that you can review the work, and keep the accounts in the client’s name so you can change partner without disrupting the client.

Step 7: document the work, then grow

Write down how you deliver the first service before you add a second. A documented process is what lets someone else do the work later, whether an employee, a contractor or a partner, and it is what stops quality slipping when the agency gets busy.

• Onboarding. The questions you ask, the accounts you need and the baseline you record.
• Delivery. What happens each week and month, and the checks before work reaches the client.
• Reporting. The report template and what it measures.
• Offboarding. What the client receives when the work ends.

When to hire

Hire when the work is steady enough to keep someone busy and the margin can pay them. Until then, contractors and white-label partners turn a fixed cost into a cost per client. The comparison for SEO, including the point at which a hire becomes cheaper, is worked through in outsourcing SEO versus hiring.

Growing the agency

Agency growth usually comes from three places: more clients for the same service, more services for the same clients, and higher prices as results and reputation build. The second is often the quickest, because the client already trusts you; it is also where a reliable partner for the services you do not deliver yourself makes the most difference.

A worked example: the first year in numbers

A worked example shows why the first year is mostly about cash, not clients. Take the calculator’s defaults: each client pays $3,250 a month, costs $1,650 to deliver and 3% in fees, and leaves $1,502.50. Fixed costs are $500 a month, and the founder needs $6,000 a month.

Now suppose the agency signs no clients in its first two months, while it sets up and sells, then adds one client roughly every two months: one in months 3 and 4, two in months 5 and 6, three in months 7 and 8, four in months 9 and 10 and five in months 11 and 12. That ramp is an illustration, not a forecast; yours will be faster or slower.

Quarter	Client-months	Left for the founder
Months 1 to 3	1	$2.50
Months 4 to 6	5	$6,012.50
Months 7 to 9	10	$13,525.00
Months 10 to 12	14	$19,535.00
Year	30	$39,075.00

Each client-month leaves $1,502.50 ($3,250 – $1,650 – 3% fees); fixed costs $500 a month. Hypothetical ramp.

Over the year, the agency serves 30 client-months, which leave 30 x $1,502.50 = $45,075. Take away $6,000 of fixed costs and $39,075 is left for the founder, against the $72,000 a year the founder needs. The gap, $32,925, is money the founder needs from savings or other work while the client list grows.

The month the agency first covers the founder’s $6,000 is month 11, with five clients: 5 x $1,502.50 – $500 = $7,012.50. With four clients it leaves $5,510, just short. The example’s lesson is not the exact month but the shape: the first months cost money, and the speed of signing clients matters more than the price of any one of them.

What changes the picture

• Higher prices. Each extra $100 a month on the price, at the same delivery cost, leaves $97 more per client after 3% fees.
• Lower delivery cost. Doing the work yourself removes the delivery cost but adds hours, which caps how many clients you can take.
• Project work first. A one-off audit or build brings cash in sooner, and often leads to a retainer.
• Existing clients. A founder who leaves a job with one or two clients already agreed skips the hardest months.

Common mistakes when starting a marketing agency

The mistakes that hurt new agencies are mostly about scope, price and paperwork, not about marketing skill. Each has a simple fix if it is caught before the first few clients.

Mistakes new agencies make, and what to do instead

IfYou sell every service from the first day

ThenStart with one service for one kind of clientA wide menu is harder to sell, deliver and prove. Add services when clients ask for them.

IfYou price by copying a competitor

ThenPrice from your own costs and timeA competitor’s price says nothing about its costs. Run the client calculator with your own numbers.

IfYou start work before the contract is signed

ThenSign an agreement and a statement of work firstScope, payment terms and ownership are easy to agree before the work and hard to agree after it.

IfYou hold the client’s accounts in your own name

ThenKeep accounts in the client’s name, with you as a userIt protects the client, and it protects you from being blamed if access is ever disputed.

IfYou resell work you cannot judge

ThenStart with services close to your ownIf you cannot explain the work to the client, you cannot stand behind it.

IfYou hire before the work is steady

ThenUse contractors or partners until it isA salary is due every month; a partner’s fee is due only when a client pays you.

Before you sign the first client

Before you sign the first client, check that the business, the offer, the paperwork and the delivery are each in place. Gaps here are cheap to fix before the first invoice and expensive after it.

The business

The business structure is registered You have a tax ID and a business bank account Professional liability insurance is in place

The offer

You can describe the service in one sentence The price leaves the margin you need after your own time You know who will deliver each part of the work

The paperwork

You have a client agreement and a statement of work Payment terms and late payment are written down Ownership of the work and the accounts is stated

Delivery

The first month’s work is planned You know how you will report results Any partner has signed confidentiality and non-solicitation terms

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The SBA’s startup costs guide suggests adding up one-time and monthly expenses to see how much capital you need and when. For an agency with no office or staff, the one-time costs are small; the larger risk is the months before enough clients are paying, which is why the client calculator above is worth running before you give notice anywhere.