MBA2287 Why You Should Start an Agency Business

0:09Heyo! Welcome to the$100 MBA show, powerful business lessons you can count on every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zinhome. I'm also the co-founder of Webinar Ninja, an independent software company. I started my co-founder back in 2014. And in today's episode, you will learn why you should start an agency business. An agency business is a business that serves other businesses with high ticket services. Starting the right agency business can really be one of the most profitable, stable, and low risk businesses you could start.

0:44You see, when other businesses rely on your services to deliver their services, to serve their customers, you're indispensable. You basically have a customer for life. This allows you to have stable income, stable revenue, regardless of the economy, because they need you to make money. So in today's episode, I'm going to break down exactly how to start an agency business. I'm also going to share some real-life examples of successful agencies. I'm even going to share with you the tools you'll need to create and deliver your service. It's far less expensive than you think. Let's get into it. Let's get down to business.

1:20Many people know Gary Vaynerchuk from his big social presence, his huge following on Twitter and Facebook and Instagram, his videos on YouTube and his big time keynote speeches. But what does Gary really do? What's his business? Well, he runs an agency business, VaynerMedia. He helps other businesses run their digital marketing. And Gary says it himself in interviews that he has one of the safest, least risky kinds of businesses you can start. And that's on purpose. He's not somebody who really likes to take risks and he's able to grow this business year after year. And obviously his personal brand has allowed him to also grow his business along with it.

1:57But maybe the example of Gary Vaynerchuk is a little bit out of reach for you. Let me share with you a different example. My buddy, Chris Johnson. Chris Johnson ran a business called Simply Films. He sold this business a few years ago for a pretty good profit, But basically, it was an agency business. He created trailers for authors that are releasing books. So these are videos that authors would commission his agency to create to help sell their books. Authors like Ryan Holiday and Robert Greene. And these videos weren't cheap. They're$10 ,000,$15 ,000,$20 ,000,$25 ,000 a video. And he would have a team of people creating these videos and delivering them to the clients.

2:36Now, this is one example. And it's a good example. But it's actually not my preferred example of an agency business. Why? Because these are kind of one-off projects. They even offer a release a book once every two or three years. Every year at the most. I like agency businesses that provide a regular service that helps a business do business, make money. So a good example of this is a business that helps another business run Facebook ads. Or Instagram ads. Or TikTok ads for that matter. The point here is that most businesses want to outsource this activity rather than hire somebody in-house and train them.

3:14And they don't really need somebody full-time to run ads. Ads are something that can be set up and monitored and will require, you know, maximum 15 hours a week, if that. Now, the key here is that if you do your job well and those ads convert for the business and they lead to leads or to sales, and it's a no-brainer for them. Like, hey, we spend, let's say$10 ,000 on ads. Your fee is$5 ,000. So I'm paying$15 ,000 in total every single month between the ads and your fee. And we get$45 ,000 in sales off those ads. No-brainer. They're going to run this play over and over and over until it doesn't work.

3:53And your job is to make sure it keeps working. And as long as you give them an ROI, they'll keep paying you. It just makes total sense for them. So the kind of agency business I recommend is a business that can plug into another business, that provides a service that's essential to another business. Here's another example. A fellow named Dan Norris used to run a business called WP Curve. He later sold this business for a pretty penny, but it was an agency. What WP Curve did is provide fixes and updates to any WordPress website. So you'd pay a monthly fee and you'd be able to contact these people, the agency, WP Curve, anytime you had a problem or need a fix or need a tweak on your WordPress website.

4:38Now, if you've ever run a WordPress website, you know that there are constant updates and plugins not working and you just got to constantly maintain it. And basically it's an insurance policy. It's a way to know that, hey, if I pay every month, I'll have somebody on call if I need a fix. Your website as a business owner is essential to you doing business. So this is a great service that plugs right into the pipeline of a business. And many of these agencies, their prices are not cheap. They're expensive. And the reason why is because they're high value services. They know that businesses will value them.

5:12And as long as the value they're providing is more than what they're charging, it's gonna be a no brainer for the business. So how do you start an agency business? You actually don't need much. All you need is a website, which is pretty standard for every business, to display what you offer, what services you provide, a way for them to contact you like a contact form, an email so that they can go back and forth on email with you, a project management tool so that when you're delivering your project or your service, that they can easily track the progress and you can manage that client in a portal.

5:46One of the tools I highly recommend that's really affordable is Basecamp. Basecamp is a great collaboration tool for agencies. And by the way, it's$99 a month So no matter how many customers you have, clients, team members, it's only$99 a month. And the last couple of tools are pretty simple. You're gonna need some sort of video call tool like maybe Google Meet, which is free. And lastly, you're gonna need a way to charge your customers, invoice them and charge them. And you can do this for free with Stripe. Stripe is an amazing payment processor that now has an easy way for you to just create invoices, send them a payment link where they can pop in their credit card and pay you online.

6:25And that's it. These are very, very basic tools and something that you can actually set up on a weekend. Your next job is to make sure you put out great content on your website, your blog posts, maybe some videos. This will allow you to get some organic traffic on the topic of your expertise, of what you do. So if you're like a podcast editing service, then you should write some articles about what makes a great podcast, the best equipment for podcasting, on-air voice techniques, all kinds of stuff like that. This will attract podcasters that might be interested in your service. And agency businesses are all about momentum, meaning once you get your first client, you make sure you over-deliver and you give an incredible experience.

7:07That way you get a testimonial and hopefully a referral. One customer leads to the next and the next and the next. And as you grow your customer base, you can start adding services and adding different kinds of products and solving new problems that your customers have. Now, I'm a big fan of agency businesses because they're B2B, meaning you're serving other businesses. This by nature means you're going to be charging more than A, B2C, meaning direct to consumer. Consumers in general are a lot more price sensitive. They don't have a budget for things. They don't even have anything to compare your prices to.

7:44So automatically you're going to sound expensive. But businesses, they're investing in their business and they see your service as an investment. And again, if you're choosing a service that is essential to their success, then this makes your life a whole lot easier. Thanks so much for listening to the$100 MBA show. If you want to learn more about some other tools you can use to leverage your business, to make more money in your business, especially AI tools like ChatGPT, then you're going to want to tune in tomorrow. Tomorrow's episode is all about that. In fact, I'm going to share with you five ways, five unique ways you can use ChatGPT to make money.

8:22And these are really easy to implement. Tune in tomorrow for that. If you love this podcast, why don't you hit follow or subscribe on your favorite podcast app right now. By doing so, you get our next episode automatically and you get our over 2200 episodes in our back catalog right there for you to consume. That's the only way you can get access to the back catalog is by subscribing or hitting follow on your favorite podcast app. Before I go, I want to leave you with this. One of my favorite things about agency businesses is that maybe you'll start out doing the actual work yourself. You're fulfilling the service, but then you can easily replace yourself by making your first hire, finding somebody that can be trained and do what you do.

9:05And then you can scale even further by making your second hire and third hire and fourth hire. And what I love about this is because you'll never hopefully be upside down because you only hire when you need to. This allows you to stay profitable and not overspend. Your team grows only when you grow. This keeps your margins in a good place. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

9:39Thank you.