Learning how to start a social media marketing agency can be your way out of a dead-end 9–5 job.
Yet, taking the leap of faith is never easy.
After all, there will always be a fear that you won’t be able to land enough clients to pay the bills.
Don’t fret; in this article, we’ll help you work through these doubts with a step-by-step guide!
Read on to learn all the ups and downs of the social media marketing business.
- How Profitable is Owning a Social Media Marketing Agency?
- What You’ll Need to Start a Social Media Marketing Agency [& Associated Costs]
- Do I Need a License or Certificates to Start a Social Media Marketing Agency?
- Why You Should Consider Starting a Social Media Marketing Agency As a Side Hustle
- How to Start a Social Media Marketing Agency in 5 Simple Steps
- Things to Consider When Building a Social Media Marketing Agency
- INSPIRATION: Social Media Marketing Agency Ideas
- Frequently Asked Questions
- Similar Businesses to Consider Starting
- Wrapping Up
How Profitable is Owning a Social Media Marketing Agency?
The field of digital marketing, in general, pays above-average wages.
According to the Bureau of Labor Statistics, social media specialists make more than the median income.
The estimated annual pay in 2015 was $56,770, while the national median income was only $36,200.
Believe it or not, running a firm is even more profitable!
As a medium-sized agency owner, you can expect an annualized salary of around $351,000, according to Promethean Research.
If you run a small social media marketing business, the take-home could sit around $252,000.
What if you start a simple marketing studio? The salary could be around $171,000 in this case.
Regardless of the business scale, you’ll be in for around $20,000 worth of benefits every year.
The reason why these agencies are so lucrative is that some companies don’t favor in-house marketing.
This makes them more willing to pay top bucks for talent wrapped up in a professional front.
What You’ll Need to Start a Social Media Marketing Agency [& Associated Costs]
You can get a small social media marketing agency (SMMA) up and running for as little as $150.
This fee should cover the LLC, G Suite, and website building fees. However, there are some costs to consider if you plan on expanding.
- Virtual Assistant: Plan to pay $3–$5 per hour for an assistant to help you with administrative tasks.
- Technical Software: Some tools will eventually require a subscription, like Buffer, Adobe Creative Cloud, and Dropbox. Expect to pay around $50 per month.
- Remote-Work Software: If you’ll bring along employees, consider paying for software like Slack or Trello. The subscriptions usually cost under $10 per month.
- Office Space: Chop rent and utilities by working remotely or in co-working spaces.
- Payroll: Unless you want to tackle everything on your own, you’ll need to hire (or at least subcontract) a graphic designer and content writer.
- Marketing: As a B2B agency owner, you’ll want to put 2–5% of your revenue into digital marketing. Start with a daily budget of $10–$50 on Google Ads.
- Insurance: For a small-scale SMMA, you could need anywhere between $14 and $124 a month for insurance.
Do I Need a License or Certificates to Start a Social Media Marketing Agency?
Depending on where you are, you could have to register your marketing business.
However, this line of work usually doesn’t require licensing.
Why You Should Consider Starting a Social Media Marketing Agency As a Side Hustle
Starting an SMMA doesn’t mean that you have to quit your day job.
As it happens, there are a few merits to keeping it all as a side hustle.
- Little to No Capital Required: SMMAs are low-cost startups. Plus, you don’t have to pay for software or subcontractors until you land your first client.
- Small Steps: If you’re still testing the waters, you can start with social media freelancing before setting up an agency.
- Cash Influxes: It’s possible to get influxes quickly by doing audits for new clients. Then, funnel back the money into the core social media management services.
- Flexible Services: Don’t like working on a certain social media platform? As the SMMA owner, you’ll get to decide what services and channels the agency will cover.
How to Start a Social Media Marketing Agency in 5 Simple Steps
You can always expand your SMMA later, but the tricky part is setting a solid foundation.
Here’s what you’ll need to tackle at the beginning:
Step 1: Pick a Niche to Excel In
Picking a niche (or two) won’t only bring you closer to new clients that want the same thing as you.
It also affects the target audience of your digital marketing campaigns and the social channel that you’ll rely on.
For instance, if you prefer fashion, you’ll probably need to center your social media services around Instagram.
Sports, beauty, B2B, healthcare, legal, and tech are all common specialties to consider.
Step 2: Brainstorm a Name and Register Your SMMA
Clients won’t care all that much about your agency’s name. Still, it speaks volumes about your creativity.
To avoid falling into a rabbit hole, use the niche as a “keyword” in a business name generator.
Once you see something you like, check if the domain is available and subcontract a designer to come up with a logo—it’s that simple!
Before jumping to the next step, double-check your local laws for the required documents and registrations.
Step 3: Shape Your Service List and Rates
Consider what kind of marketing services you want to offer your clients from the following:
- Social media advertising
- Content creation
- Marketing strategy
- Community management
- Email marketing campaigns
- Social media accounts management
Next, customize your pricing structure with fixed project-based fees, hourly rates, or value-based compensation.
Regardless of the structure, you don’t want to undercharge.
Some experts recommend charging clients at least $2,500 for running a paid advertising campaign on their behalf.
Depending on the service, you could need subcontractors or hired talents. Make sure to factor their fees into the price.
Step 4: Start Generating Leads
Before you land your first client, you’ll have to go through the tedious process of lead generation.
Look for local businesses in your niche that aren’t running any Facebook ad campaigns at the moment—they might need your services.
Similarly, you can scour LinkedIn, Google SERPs, and social media platforms for a potential client.
Input all the info into a sheet as you go. When you have 50 or more leads, start reaching out.
Step 5: Do Client Outreach
As a social media marketer, you have few outreach tactics. The top options are calls, emails, DMs, and face-to-face meetings.
The trick here is to personalize the contact method for every potential customer and clarify your SMMA’s unique selling point.
If you have no previous clients to vouch for you, consider volunteering your social media management services for local charities or small business owners.
Then, build a case study to back you up.
Finally, networking will help spread the word about your new digital marketing agency.
It’ll take time to attend events and keep up with industry groups on social channels. However, the payoff will be worth it!
Things to Consider When Building a Social Media Marketing Agency
Setting a thorough plan isn’t only about pricing lists and leads.
You’ll also need to consider the business model, partnerships, and marketing strategies to retain new clients.
Can You Run a Social Media Marketing Agency By Yourself?
It’s possible to run an SMMA all by yourself.
This is particularly true if you plan on becoming a social media manager for less than ten clients.
However, as you scale the business, it’ll be hard to keep it as a one-person digital agency.
At one point, you’ll need to bring in some permanent employees or subcontractors.
Can You Collaborate With Other Agencies to Boost Your Client Base?
Some marketing agencies define themselves as full-service rather than focusing on social media. In this case, they could be potential customers or partners for you.
Approach them as a subcontractor and offer your social media marketing services to their clientele.
Even if you collaborate with full-service digital marketing agencies, you’ll still be self-employed under the independent contractor classification band.
Can You Attract Inbound Clients to Your Social Media Agency?
Aside from chasing down leads, it’s helpful to throw some inbound sales nets through ads on different social media channels.
Consider getting your website to rank by publishing SEO-optimized content. It’s also a chance to show off your content marketing skills!
INSPIRATION: Social Media Marketing Agency Ideas
It’s also a good idea to give your SMMA a competitive edge.
Nothing does this better than specializing in one aspect and basing your business idea on it.
- Influencer Marketing Agency: A business model focused on helping influencers gain traction and increase their follower counts.
- Video Marketing Agency: An SMMA specialized in creating video content instead of general social media posts. This model requires hiring heavy editing talents.
- Social Media Consultancy Agency: A variation of the business idea that focuses on audits and one-on-one marketing strategy sessions. This opens up your way to high-ticket clients.
- Community Management Agency: A business model that caters to real-time engagement with the target audience.
Frequently Asked Questions
Is Starting a Social Media Marketing Agency Worth It?
Yes, a social media marketing agency is generally worth the effort.
For one, the business model comes with low overhead costs and a decent profit margin, but that’s not all.
The work can be emotionally rewarding, especially if you pick a niche you enjoy.
Can I Start My Own Social Media Company?
Yes, it’s possible to start a social media agency regardless of what capital and formal education you have.
In fact, some people managed to get their SMMAs up and running when they were only 15 or 17 years old.
Similar Businesses to Consider Starting
Don’t fret if you’re not sold yet on the concept of SMMA; keep your options open by considering these alternatives:
- How to Start a Marketing Business: Instead of limiting your scope to social media channels, go for an agency with full-range marketing services.
- How to Start a Graphic Design Business: Graphic design can be a great alternative if the visual aspects appeal to you more than content creation.
- How to Start a Freelance Business: If you like the idea of one-person creative agencies, opt for freelancing instead.
Running a social media marketing agency or an SMMA can be profitable, either as a side hustle or as a full-time job.
If we had to pick the hardest part, it’ll probably be the client outreach. Thankfully, your agency can still thrive with a few clients.
What about you? Do you think an SMMA is worth quitting your day job for?
Let us know in the comments below and don’t forget to share the article with a friend!