How to start a Digital Marketing company in 2020 (or any type of company really)…
Think… think… think…
If you are thinking about starting a business in 2020 you’re not alone. There were more than 200,000 companies formed in Delaware alone in 2017. Now the math side of my brain is wondering why roughly 21% of the state’s population would want to create a new company? And what kind of company’s are they creating? How much business can a state that is only 2,489 square miles hold? There are a lot of reasons as to why there are a lot of companies formed in states like Delaware, Nevada and Wyoming, but that is another topic for another day. It is important though to think about the state you want to form your company in and why you want to form it their. But alas… let’s talk digital marketing.
Digital marketing has expanded over the past two decades to be what it is today and will keep evolving into tomorrow and we all have Yahoo! to thank for this. Back in 1998 two guys just wanted to sell a little known company for $1 million so they could finance their education. The bright minds in Silicon Valley at the time were turning them down and even Yahoo! (remember them?) laughed in their face all because their search engine would send search engine users to other sites outside of their network. To stupid too believe? No way this ever happened? What a Yahoo (lol… I’m remembering the scene from Frequency). Any who I will actually believe you if your a skeptic, so let Yahoo! Finance tell you about, well… Yahoo!’s finance (or lack of).
Looking at the marketing side of starting a digital marketing company let’s delve into a few areas that we believe you should be focusing on in order to succeed in the digital environment. We are by no means the end all be all and this blog doesn’t cover every step, just a few of the many that you’ll need to start a (digital marketing) company and be successful in doing so.
STEP ONE: Form a business plan (and try sticking to it) A lot of business owners want to sit at the table discussing an idea with a loved one or a friend about how they are going to revolutionize an industry and make a lot of money doing so. The expectation of waking up the next day and starting to make money is an amazing dream and a great desire; problem is though is that it’s not very realistic. So if we can’t wish money what should we do to make this voice happy? Well keep it busy of course with the formulation of a business plan. It’s an easy six step process that focuses on: 1) Executive Summary – Highlights and summarizes everything in the business plan and should only be a page or two. 2) Opportunity – What problems are you solving for your customers and what are some solutions you can offer? 3) Market Analysis – Target the market you want to enter, segment that market and then market to that market. 4) Execution – What’s your marketing plan? How are sales involved? Need logistics? What barriers will you need to hurdle? 5) Management – What is the management structure of your company going to be once you are up and running? 6) Financial Plan – How are you paying for the software, salaries and the infrastructure needed for daily operations?
Target, Segment, Market
As you can see, there are not a lot of steps involved with a basic business plan. When you are creating a first draft of a business plan you should outline the most important parts of your plan and summarize them. This is not only a great way to keep focus on why you are forming your digital marketing company, but to also help think of ways to differentiate yourself from your competition. Remember that marketing should be creative. You’ll want to stand out, not follow the crowd with every step (differentiate) and most importantly open up as many channels as you can to tie back into your website.
STEP TWO: Know yourself In the college of business at school they talked about doing a SWOT analysis. In my MBA we would perform a SWOT analysis. In my doctorate we delved into SWOT analysis. After years of studying business and marketing, my one true belief is every marketing and most business students know what a SWOT analysis is and that it is both useful and practical as a stand alone tool. So what is a SWOT analysis? It is a way to play four square and analyze you or your company’s Strengths, Weaknesses, Opportunities and Threats (S.W.O.T). Some are internal (Strengths, Weaknesses) and some are external (Opportunities, Threats) while some can be positive (Strengths, Opportunities) and some can be negative (Weaknesses, Threats). This analysis is completely subjective of the user.
If you cannot find a weakness in yourself than there are a lot and your not realistic. It’s not that you cannot do it, you or your company just might not be the best at it.
Why is this important? It gives you a birds eye view of your business plan and areas to strengthen and work on. It can also help you differentiate yourself or your business from the competition. Remember, digital marketing consists mainly of SEO (technical and non-technical; on-page and off-page), SEM, PPC and Social Media (Advertising and Optimization). You can choose to be a digital marketing handyman (jack of all trades master of none) or a real savant in a sub-field of digital marketing. So what does a SWOT analysis for a digital marketing company look like? Here is an honest assessment of Mark Marketing SB.
Now since this is about just starting a digital marketing company in 2020 and not all the fundamentals or software used within a company, lets just skim a few areas. Mainly focusing on opportunity and weakness I can see areas to improve and opportunities to exploit (that sounds so bad). First off weaknesses… I know that part of my off page SEO is getting quality backlinks. Not backlinks for numbers, but quality backlinks that are on pages with a lot of page authority. It’s not that I can’t do it, it’s just tough to do it properly. Another area that I can do, but I’ve seen better is graphic design. I enjoy doing graphic design in Adobe Illustrator, I’ve just seen better and I know that it will take me a lot of time comparative to others who could do it in half the time or even better. I am able to mask this weakness though with programs like Canva. Finally, direct sales… nope, no way, no how. I’d rather spend money on people to make phone calls and sell the ice to an Eskimo, it’s just not my thing.
“It takes 20 years to build a reputation and five minutes to ruin it.” -Warren Buffett
The opportunity section is where the money is made in business. If you are a newly formed digital marketing company who doesn’t have bottomless pockets to throw at pay per click advertising and a friend at Google who can put your website on the first page the moment you hit the publish button, than you’ll want to Target, Segment and Market. Your first step should be deciding if you want to be a local SEO or a national SEO and then move onto step two… targeting. I cannot emphasize enough the power of targeting and segmenting from a money, time and knowledge aspect. It’s easier to manage your new company when you have a good overall view of current and potential customers instead of a broad view of what you think could be happening and the people you could be helping. Try to focus on a few ears of corn and not the whole field.
STEP THREE: File Properly When you’ve finally got your ideas laid out and figured out where you would like to start your niche than it’s time to figure out how you want to legally set up your operations. Some people enjoy the ability of freelancing their abilities as 1099 employees while others like to work for others as a W2 employee. There are benefits and drawbacks to both, the most obvious and discussed is the tax situation between the two. Just remember that Uncle Sam is going to want his cut no matter what you decide to do, or as George Harrison said, ” Let me tell you how it will be… There’s one for you, nineteen for me… ‘Cause I’m the taxman, yeah, I’m the taxman” (The Beatles – Taxman, 1966).
So what should you do as a business owner? If you’re not looking to be a lifetime freelancer, than incorporating your business is probably the way to go. Which brings us back to Delaware. If a company were to do business in just one state, than they have to register in that state UNLESS they register in another state and file as a foreign company in your “home state”. And this my friends is why we have subject matter experts, attorneys and the Google. There are roughly five options and so many possibilities that the combinations and permutations of setting up a proper business is almost endless.
Different business options when considering to incorporate
I would advise doing more research on what type of business you should form before forming. If this is your first time researching the different variations of ways to legally form a business than here is a quick overview of your options.
LLC – The most popular as you (the individual) are sheltered from legal liabilities (the company), but accrue pass through taxes to your own personal income.
C-Corp – Popular for large businesses that have a board of directors and are typically “double taxed”. Not very popular when initially forming.
S-Corp – Another popular option for upstarts that are starting small and want to share legal and financial liabilities with their company. It’s another way to have the tax liabilities “pass through” the company to the owner.
Partnership – If you and a friend or friends want to start this company together and trust each others judgement than this is for you. 50/50… 25/25/25/25… 90/10… You and “someone else”. If you all have ideas and want some control this is what will be necessary to run your business. Taxes, profits, responsibilities and liabilities should be discussed with a lawyer before formation as you are all in this together.
Sole Proprietorship – It’s just you on your own island. This is best if you want your company to be unincorporated and you like paying personal income taxes on profits earned through the company.
So what is best for you? That’s ultimately a decision that you will have to make. There is so much that actually goes into forming and running a business that you’ll need to do extensive research before starting but after dreaming. It’s easy to fall in love with your ideas, but remember that this should be for the long hall. The ultimate goal of any business is to make a profit and hopefully hire employees to make money for you. So if that is what you are looking to do than starting a digital marketing company (or any business in that matter) should be fun. So lets recap.
Form a Business Plan SWOT it out Incorporate (or not)
But most importantly… Target, Segment, Market. Then… Buy a domaine name Get it hosted Purchase an e-mail domain name subscription (@hotmail.com and such is lame) Design your website SEO SEO SEO SEO SEO SEO SEO SEO SEO SEO SEO Social Media accounts Google My Business Google Analytics Google Ads Facebook Business Manager Stay up to date on digital marketing Network Software and then… and then… and then…
But ultimately. Have fun 🙂