If you’ve been dreaming of starting your own social media marketing agency or have recently started one, then you know how important it is to establish your budget. Whether you’ve already built a list of clients and have started to generate revenue, or if you’re still working out how you can start your own agency, proper budgeting is essential in order to grow a successful agency.
For many business owners, the reason behind starting their own business is the freedom to generate income on their own terms, doing what they enjoy. That also means that they have the freedom to work from wherever and whenever.
Regardless of the freedom and fun behind running your own business or social media marketing agency, the bottom line is that it is still a business and businesses have startup costs. Fortunately for you, we’re going to show you a few things that you can do in the beginning to keep costs relatively low.
Understanding how to manage operational costs is crucial in order for your agency to grow and be successful, and in fact, improper planning of this stage is one of the biggest reasons why so many companies fail.
In this blog, I’m going to go over everything you need to know about operating a social media marketing agency on a budget.
What are my operating expenses?
One of the first things you have to figure out when it comes to budgeting, is exactly what your operating expenses are, if any. Grab a piece of paper and write down anything that can be considered an expense to your business.
This will most likely include:
To run a successful SMMA, you’re going to need to find the right software to help you produce content, manage clients, and streamline operational processes. Depending on what you’re offering to your clients, this could include software that will help you with video editing, project management, email marketing, graphic design, and website design.
After trying out a few different programs, these are my current favorites that I’m using to help my business run more smoothly:
- Filmora for Video Editing
- Canva for Image Editing
- Active Campaign Partner Program to save money
- Asana Free Version for Project Management
I also used Squarespace to build and manage my website. There are a lot of different programs out there, so don’t be afraid to try out a couple before settling on what works best for you. Luckily, a lot of software programs offer free versions so you can basically take it for a test drive before deciding whether or not you’ll need or want to purchase the paid version.
You should always be on the lookout for tools that will help you improve your business and allow you to produce great work for your clients. If you ever find that you’ll need to invest in some new software in order to better meet the client’s needs then make sure that you incorporate any extra needed software into your proposal when you’re finalizing your deal.
Outsourcing work to freelancers, virtual assistants, etc will also account for a portion of your operational expenses. Remember, the work you do should be focused on things that will generate revenue—and that means that you shouldn’t be spending your time scheduling every social media post. That’s what you hire freelancers and virtual assistants to do.
I’ve had a lot of success using virtual assistants from around the globe, including VAs from India and the Philippines. I’ve hired VAs to help with web/app development, design, posting and scheduling, and even admin work. There are a lot of websites and apps that specialize in pairing business owners with freelancers or VAs, including Upwork, Fiverr, VirtualCoworker, and Teams.ph.
I’ve also hired many freelancers to help create copy for my projects, but I find it’s best to try to find someone local to your area or that speaks your client’s customer’s language. While finding one of the more affordable options is usually a good way to go when it comes to a task like scheduling posts, that isn’t the case for copy. The cheaper it is for copy, the worse it usually is. However, spending a little extra there will save you time and money in the long run, as a good copywriter won’t require extensive edits.
Like software, the equipment you use is a necessary operational expense if you want to be putting out the best results for your clients. As soon as you get into the world of video—which you absolutely should be if you’re running a social media or digital marketing agency—then you’ll need to invest in the right equipment.
That includes video cameras, tripods, lighting, microphones and whatever else is needed to make great content. My video equipment setup includes the following products, which help me put out great video content every week:
- Logitech HD Pro C920
- Canon EOS 70 D
- Fifine USB Microphone K668
- Rode VMGO VideoMic Go
- CRAPHY Soft Box Lights
- Canon PowerShot ELPH 110
- Canon EOS 70D Video Creator Kit with 18-135mm Lens, Rode VIDEOMIC GO and Sandisk 32GB SD Card Class 10 – Wi-Fi Enabled
One of the main keys to becoming a successful social media marketing agency owner is a commitment to keep learningeverything you can about your industry. This could include brushing up on tried and true business management techniques, or investing in learning about all the newest trends and media that you can use to keep your clients happy.
Whether this means enrolling in an online course or mentorship program, or attending relevant conferences, you have to factor these costs into your operational expenses. This is one of the most important areas where you’re going to have to spend money to make money, because you should always be investing in yourself.
What tools are available to help solo entrepreneurs manage money?
Once you start bringing in clients that means you’re also going to be bringing in money, which means you need to be able to send, receive, and track payments online. It’s even more helpful if you’re able to find tools and software to help you populate reports and keep track of all of your accounting.
Some of my favorite tools and programs are:
It’s a solid accounting tool that will help you track and manage your finances. The desktop application lets you track sales, send out invoices, and review recent payments while away from the office. There are even mobile apps available for both Android and Apple phones.
Similar to Quickbooks, it’s an accounting software designed for small businesses and the self-employed
This is the online payment processing software that Cereal Entrepreneur Academy uses, and allows us to accept credit and debit cards as forms of payment
Not only will these tools and software help you keep your business finances organized, but they’ll also be a real asset during tax season. As a business owner, it’s also very important to learn how to keep your business and personal expenses separate. Being on top of this will help you decide on tax deductions for you agency, giving your business more credibly, remove personal liability, and won’t put an extra burden on your personal account.
Now that you know how to operate your social media marketing agency on a budget, it’s time for you to get out there and start bringing on clients!
If you want to learn more about how to run a successful social media or digital marketing agency, then visit the Cereal Entrepreneur blog for more helpful resources. You can also follow us on Facebook, YouTube, and Instagram for great content daily.