Are you a Professional or do you have passion and interest for things like SEO, website building, web design, branding, on-line marketing, social media and similar areas, you may consider to set up a digital marketing agency.
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A digital marketing agency offers services related to online marketing. It works to improve a brand’s online presence and performance, driving more traffic, realizing more engagement, and conversions.
A typical digital marketing agency offers some or all of the following services: Search Engine Optimization (SEO), Pay-per-Click Advertising (PPC), Content Marketing, Social Media Management and Marketing, Email Marketing, Affiliate and Influencer Marketing, Web Design and Development, Analytics and Data Analysis, E-commerce Solutions, etc.
Over the past five years, there has been a strong demand for digital marketing services from the retail, financial services, automotive and telecommunication sectors and this demand increased the industry revenue. Year by year, as more brands sell their products directly online, retailers are fueling demand for industry activities such as search engine optimization services to help them compete. In the last five years, industry revenue grew at a CAGR of 25.2%, including a 7.7% increase in 2023 to reach $60.0 billion. In US, there are around 10.000 digital marketing agency businesses, with total number of employers around 161k.
Let us discover the essential components of a digital marketing agency business plan, explain what should be covered in section.
Executive Summary:
Although it’s the first part of the business plan, the executive summary is often written last. This section offers a brief overview of your digital marketing agency, outlining your specific services (e.g., SEO, PPC, content marketing, social media management), company structure (LLC, sole proprietorship, Inc, etc.), management team, operations, and financial projections for the forthcoming three to five years. Also write how much funding you need for your digital agency.
Company Description:
This section is the place to write the specific details of your agency. Give information about your location, legal structure, shareholders, briefly your services, your team’s expertise, and milestones or success stories if any. Highlight what differentiates your agency from the competition.
Services:
Write the details of digital marketing services you offer. Your services may typically include services like search engine optimization (SEO), pay-per-click (PPC) advertising, content creation, social media management, email marketing, web design and development, analytics, and more. Describe any additional or complementary offerings like consulting services, if you have any. Also include the Pricing of each service for different tiers.
Market Analysis:
Market Analysis stands out to be a very important part of a digital marketing agency business plan. Especially as an expert, you first need to know your own market and the factors affecting your market. Visualize your market clearly, provide industry statistics, such as its current size, growth potential, trends. List the specific characteristics of your potential customers such as their location, their business & industry, age, gender, their income, number of employees, etc.
In this section, also include your SWOT analysis. A SWOT Analysis is a strategic tool which helps you identify your business’ Strenghts, Weaknesses, Opportunities and Threats. While doing your SWOT Analysis, be aware that Strengths and Weaknesses refer to internal factors, i.e., things you have control over and can change. In contrast, Opportunities and Threats are external factors, i.e., things you cannot control, but you can potentially respond to.
>> Click this link to subscribe and download a SWOT Analysis Template (free)
Competitive Analysis:
If you like, you can put competitive analysis into the “market analysis” section too. In other words, you can combine section 4 and section 5 and write a longer section 4.
Identifying your competitors and understanding their strengths and weaknesses is very important for the success of your digital marketing agency, since there is a high competition in this industry.
Gather data and analyze competitor agencies, their client portfolios, strategies, pricing, and service reviews. Use this information to position your agency to an adventageous position. Make a comparative list of your competitors’ strengths and weaknesses and define the differentiators that will make your agency preferable over competitors.
Sales and Marketing Plan:
This section is the most crucial section of your digital marketing agency business plan. With no clients, you will not be able to make it to anywhere. To build your marketing plan, first, define your target customers. Describe who they are, where they are located, what revenue ranges they have, which industries they are in, how many people they employ, how their purchasing processes are, where they are seen, how and where you can reach them, etc. Develop unique and attractive sales propositions for your target customers.
Positioning: Describe how you plan to position your business in the market.
Pricing Strategy: Detail how you’ll price your services in relation to competitors.
Promotion and Advertising: Set up and define your marketing strategies considering social media, local ads, networking events, on-line platforms, etc.
Describe your sales channels, including your sales process, techniques, and activities, including your payment collection processes.
Management and Operations Plan:
In this section, define your day-to-day operations, including Management team, employees, equipment and technology needs, and regulatory compliance.
- Define which partner(s) will be in which role(s)
- Define the main employees
- How many employees will there be
- Include their expertise and certifications
- Which platforms and software will be used, for what and at what cost
- How you will conduct the Daily operations, how does a typical day look like
- Include any payment systems that you will have
- Include partners and suppliers information and how you will conduct relations with them
- Include customer relationships, etc.
Emphasize how you will make collaborations with freelancers, third-party platforms, or industry influencers.
Financial Plan:
For a successful digital marketing agency business, you will need a good financial plan.
First, define your startup costs such as website, initial marketing costs, Office space, software, hardware, working capital for the first 6-12 months, etc. These will be your starting costs and the initial funds you need to start your agency. Do not confuse this with monthly recurring expenses.
Go on with estimating your revenues for the upcoming months and years. Usually, this is done for 3 years. On a monthly basis for the first year, on an annual basis for the second and third years.
Next, define your recurring expenses like wages, subscriptions, rent, utilities, Accounting, comissions, etc. Usually, this is done for 3 years. On a monthly basis for the first year, on an annual basis for the second and third years.
At the end, deduct your recurring expenses from your revenues and you will have a result of net profit/loss for that year.
Also include the details of your funding needs, cash flow, and financial statements
Watch our very detailed video about how to write the financial plan of yur business plan here:
https://youtu.be/N-SlYs1BGzw?si=8mK4JGfOuEZyzwCH
Also read the article about how to write the financial section of your business plan:
https://peakplans.co/how-to-write-the-financial-section-of-your-business-plan/
Appendix:
Include any additional information that supports the business plan, such as legal documents, resumes, and marketing materials.
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