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challenges faced by advertising agencies

Why MOST Marketing Agency Owners Will Fail in 2019

February 2, 2019

Just like any other business, starting and running a digital marketing agency is hard work. It comes with its own challenges and requires agency owners to give it their all. Luckily, many people find success running their own social media or digital marketing agency. However, just as many, if not more, fail.  

There’s no doubt that there are many obstacles that agency owners will encounter while building their business. If these obstacles aren’t handled well, then it is easy for the business to fail.

In this article, I’m going to be exploring some of the most common mistakes agency owners make, and let you know how you can avoid making them yourself! If you keep these obstacles and challenges in mind, then I have no doubt that you can make your agency a success as well!

Lack of Product/Service Knowledge

Your number one focus when you decide to embark on a new career in digital marketing, is to learn everything you can about marketing. Luckily, there are multiple avenues for you to acquire the knowledge and skill you’ll need.

Online Courses

Online courses, like Cereal Entrepreneur’s own Digital Marketing School, are a great way to get the skills and tools needed to run a successful business—from learning the essentials of the industry to learning how to acquire new clients.

Most courses cover a wide variety of skills, including:

  • Social Media Marketing
  • Email Marketing and Automation
  • Content Marketing
  • Website Design
  • SEO
  • PPC

When starting your own agency, find one or two of these areas that you are good at and focus on those two skills. You do not have to try to be an expert for every skill, because once your business grows and you can afford to, then you can outsource freelancers to handle the skills you are not good at. Spreading yourself too thin and taking on too much will only result in you burning out and in neglecting the areas that require your attention the most.  

Mentorship Programs

While book-learning is great, sometimes the greatest teacher is experience—and right now, you’re not in a position to have learned from experience. Instead, enroll in a mentorship program so that you can learn from someone else who has the experience you have yet to acquire.

By joining a mentorship program, you can get one-on-one access to real life experts and learn from their experiences, and you’ll be able to ask any questions you may have about the industry or your agency.

Digital Marketing Conferences and Networking Events

You can also learn valuable skills and get to know more about the industry by attending conferences or networking with other marketing professionals in your area.

A great place to start with your agency is to study, find a mentor, enroll in training, conduct personal research—do whatever you can to enhance your knowledge of the industry.

Poor Management Skills

Even if you are the first and only employee of your agency, you need to be able to manage your own time and resources. Once your agency grows, these skills will only become more essential.

You will struggle as a leader if you don’t have enough experience making management decisions, supervising a staff, or the vision to lead your organization. Bad management will not only affect morale, but will also hinder productivity, which will eventually affect the services you are providing to the client or customer.

Poor Financial Management

Most often, finances are the issue that will put the nail in the coffin if your agency is struggling. You must know, down to the last dime, where the money in your business is coming from and where it’s going. To avoid disaster, be prepared with a contingency funding plan—a reserve of money you can call upon in the event of a financial crisis.

No matter how small your operation is, use professional business accounting software to keep records of all financial transactions, including expenditure and all revenues received, and use this information to generate profit and loss statements.

If you lack skill in financial management, consider hiring a tax advisor and professional bookkeeper or certified public account to help manage your financial affairs.

No Business Plan

Without a doubt, operating an agency without a business plan will lead to failure. Your business plan should include information on what your competitors are doing, including a thorough review of the way other businesses in the industry operate.

A thorough and complete business plan should include financial forecasting based on predictable revenue, strategic marketing, and management solutions. Your business plan should also include how you plan to price your services.

Underpricing services is also one of the most common reasons that agencies fail. Your prices should be competitive, which means you need to analyze the pricing of your competitors. While offering incentives can be a great way to attract customers, you need to make sure that you’re not spending too much of your valuable time on tasks that aren’t making you money.

While pricing your services, you also need to take into account labor costs. Weigh these costs—whether this means your own labor if you’re the sole employee, or the labor of your team—against the profit you wish to make.  

Not Focused on Revenue Generating Tasks

As an agency owner, you have to prioritize your time and skill. If you want to make money and be successful, you need to focus on the tasks that will bring in revenue. To prioritize your tasks, remember to:

Set Goals

Prioritize your day by writing out your goals. It’s okay to start small, with easily completed tasks. You should also keep in mind longer time goals, perhaps writing out your weekly and monthly goals as well as your daily goals.

Be Conscious of Workload

Do not take on too much too fast, especially when you’re first starting out. It’s natural to feel like you shouldn’t say no to opportunities that might help you advance your goals, but if you spread yourself too thin, then you won’t be able to devote the needed time to any of your tasks. Always be conscience of what’s on your plate, and how much time everything reasonably requires.

Take Ownership

Many new agency owners face one particular challenge: lack of supervision. Being your own boss is certainly an adjustment, and you need to be prepared to hold yourself accountable. If you’re not prepared for the stress of owning your own business, you will burn out fast and will give up. Take ownership over your tasks, over your time, your productivity, and your goals.

Manage Time Wisely

If managing your time is a challenge for you, there is still hope. There are many tools, software, or personal tricks that can help keep you focused and aware of the time you’re spending on each of your tasks.

Work/Life Balance

One of the biggest benefits of owning your own agency is that you get to set your own schedule. However, this can be a challenge if you start to prioritize personal time over your business. To live the lifestyle you want, you MUST invest in your business first. Do not spend valuable time on tasks that aren’t making you money.

Lack of Sales Experience

Even if you have a handle on every other aspect of managing a business, the sales side of running your agency requires a whole different set of skills.

Building relationships with clients is crucial to the agency’s success and growth. Some agency owners are not comfortable cold calling or attending networking events, but until you start generating revenue, this is something you will have to do.

Print out business cards and pass them out wherever you go, talk to friends and family about your business—get the word out there about what your agency is about and the services you offer. Once the agency starts to grow, then you can look to hire a dedicated sales person if this is an aspect of agency life that you are not comfortable with.

Starting a digital marketing agency in 2019 can be both rewarding and challenging. Most agency owners fail because they do not know their competition, do not have a business plan, lack financial management and leadership skills, and don’t know how to prioritize the day-to-day operations to make sure time is spent on revenue generating activities.

However, knowing the challenges that you will face is half the battle, and being prepared for any obstacle that comes your way will help ensure that your digital marketing agency is a success in 2019.

If you are ready to start your own digital marketing agency in 2019, then enroll in our Digital Marketing School today! Right now, you can use the promo code Promo75 for $75 off the online course. You can also follow us on Facebook, Instagram, and YouTube for industry news and tips on running your own business, or visit Cereal Entrepreneur’s blog for more FREE training every week.

 

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