3 Indispensable Tips For Starting Your First Agency

John Reeve | February 18th, 2021 | , ,

3 indispensable tips for starting your first agency

You’ve decided to go out on your own and start an agency. All you need is a computer and a few clients, right? That’s a start (and it’s how we did it), but, there are a few other important things to consider. Here are three indispensable tips for getting your agency up and running smoothly and turning a profit. These tips are based on our past successes and failures in running a web design and development agency at Pelago.

Specialize in areas you already have expertise

The freedom to start a business of any kind is empowering, but it can also be a burden if you have to learn a new skill. Your new agency should provide professional services in areas that you are already an expert (or on your way to becoming one). You could venture into a new area of expertise if you want, but the time and energy spent learning a new skill is going to set you back months, if not years.

Leverage the expertise you already have. You’ll be profitable sooner and will be less likely to need outside help. Once your agency is established and profitable, you can consider expanding your domain knowledge through conferences, webinars, classes, and independent study.

Focus every hour of your working time

As a professional services agency your most valuable resource is your time. It is also happens to be your most limited resource. Whether or not you are billing hourly, your time is best spent working directly on client work. As a founder and principal, you could pass all the work off to employees and freelancers, but then you’ll have to increase your margins to cover your salary. That can put a unnecessary strain on your business those first few years.

Instead of eating into your margins, roll up your sleeves and do some of the client work. As a result, your agency will be more efficient, produce better work, and reach profitability sooner.

If you do bill hourly, bill every minute spent on every client project. That includes meetings and time spent managing projects. Some clients may be reluctant to pay you for this time — and you may be reluctant to bill them for it — but it’s important to shows you value your time. As long as you are focusing your time and expertise on delivering a successful project to the client, it shouldn’t matter to them how that time is spent.

Time tracking software can be a powerful tool for your new agency. By tracking your time you’ll be able to quantify your time spent on client work, giving you the reports you need to improve productivity and it makes billing clients much easier.

Embrace change

You may get a few months into your new venture and realize the professional services you are offering are not as viable as you initially thought. Or, there may be a better opportunity that presents itself. This happened to our web design agency. We started our agency thinking we’d specialize exclusively in front end web design. No development, just design. But, a year into it we realized that development contracts were more plentiful and paid more. Not to mention, we’d already lost a few contracts because we didn’t want to do the development portion of the work.

So, we evolved. We did have some development expertise, but had to invest some of our time into learning more. Having been established for almost a year, we were also able to hire a few developers to bridge the gaps in our learning. As a result, our agency grew faster and was more profitable than it would have been if we’d stuck to only doing web design.

Be open to change. If what you are doing isn’t working, or could be working better, consider that an opportunity to grow your agency. The freedom and flexibility upon which you build your agency will also enable you to pivot and adapt quickly to your market landscape. Word of mouth and referrals go a long way in bringing you work, but being able to go out and find new client work is essential to growth.

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Intervals Blog

A collection of useful tips, tales and opinions based on decades of collective experience designing and developing web sites and web-based applications.

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Intervals is online time, task and project management software built by and for web designers, developers and creatives.
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John Reeve
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John Reeve

John is a co-founder, web designer and developer at Pelago. His blog posts are inspired by everyday encounters with designers, developers, creatives and small businesses in general. John is an avid reader and road cyclist.
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Jennifer Payne
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Jennifer Payne

Jennifer is the Director of Quality and Efficiency at Pelago. Her blog posts are based largely on her experience working with teams to improve harmony and productivity. Jennifer is a cat person.
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Michael Payne
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Michael Payne

Michael is a co-founder and product architect at Pelago. His contributions stem from experiences managing the development process behind web sites and web-based applications such as Intervals. Michael drives a 1990 Volkswagen Carat with a rebuilt 2.4 liter engine from GoWesty.
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