Starting an agency can be thrilling and intimidating. You can choose your schedule, assemble your client list, and do work that reflects your vision. Perhaps you’ve noticed a gap in the market or you’re simply ready to offer a service on your terms. Maybe you’re freelancing and want a more established presence. No matter your goals, an agency can be an excellent way to channel your expertise into a business. The market for global digital marketing agencies was valued at $6.32 billion in 2024 with a compound annual growth rate of 14.32% from 2025 to 2033.

Below, we’ll outline the process of starting an agency, including how to book your first clients, handle day-to-day tasks, and tackle the challenges of growing.

What’s in this article?

• What is an agency, and why start one?
  
• What steps should you take to start an agency?
  
• What tools do you need to run an agency?
  
• How do you attract clients to your agency?
  
• How much should you charge for your agency’s services?
  
• What are the biggest challenges in starting an agency?
  
• How do you effectively scale an agency?
  

What is an agency, and why start one?

An agency provides specialized services to clients for a fee. Agencies come in many forms, including:

• Marketing agencies: These might focus on social media campaigns, email marketing, or brand strategy.

• Recruitment agencies: These connect employers with job seekers, often with a focus on specific industries or roles.

• Creative agencies: These work in the fields of graphic and web design, illustration, photography, or video production, among others.

You can earn a living by applying your skills to client work. Instead of being a lone freelancer, you can establish a recognizable brand with a name, a website, and refined offerings. You can also hire a team to help serve more accounts at once. It can be a powerful way to build a reputation in your field while retaining more control over your professional life.

Many businesses rely on agencies. Not every business wants to hire in-house staff for each specialty. Instead, businesses often search for agencies with proven track records, distinct skill sets, or the nimbleness to deliver results quickly. If you can solve a pressing problem with consistent returns, there’s a good chance your agency will succeed.

What steps should you take to start an agency?

There’s a basic set of steps to start an agency. Here are the primary tasks you’ll typically handle during the startup phase:

Define your services

First, clarify the services you plan to offer. If you’re a marketer, is your focus social media, content strategy, email funnels, or large-scale brand strategy? If you’re a recruiter, do you specialize in tech, finance, healthcare, or where those sectors meet? If you’re a designer, do you do web, print, or product work? Know what your strengths are when you choose your core services.

Though it’s tempting to say yes to everything, especially in the early days, that can muddle your positioning. Specialized services help you stand out and let clients who are searching for your talents find you more easily.

Choose your name and legal structure

Think of a name for your agency that reflects your mission and is easy to remember. It could be your personal name or something distinct that positions you as a brand. Check domain availability to ensure you can secure your preferred website URL, and then choose a legal structure. These are common options:

• Sole proprietorship: This is often the most simple to set up, but you’ll assume personal liability.

• Limited liability company (LLC): LLCs offer personal liability protection and are popular for small agencies.

• Corporation: Founding a corporation is more common for larger entities because they require more complex filings.

Research local regulations, consider consulting an accountant or attorney, and meet any registration requirements.

Build a simple portfolio

Even if you’ve done only a handful of projects, gather those examples into a polished online or physical portfolio. People want to see what you’ve done. If you’re new and don’t have many samples, try working on a few pilot projects—for free or at a reduced rate—to start building a body of work that showcases your skills. Potential clients often want to check your portfolio before they contact you, so keep it sharp and up-to-date.

Track your financials

Open a business bank account, and carefully track your finances. Choose accounting software to record expenses and income and to help during tax season. If you’re unsure how to proceed, speak with a financial consultant. Most importantly, keep your personal and business finances separate: it’ll be much easier to see where your money is going and measure how you’re doing overall.

Create a brand presence

At a minimum, your agency needs a website that outlines what you do, what kinds of clients you work with, and how to contact you. That can be as simple as a landing page or as elaborate as a full website that features case studies and a blog. Think about a visual identity—the colors, fonts, and imagery you want clients to associate with your agency. You can keep it minimal, but consistency matters. A few social media accounts can help attract work as well. Present yourself in a way that resonates with the clients you want to attract.

What tools do you need to run an agency?

Running an agency involves creative energy and administrative discipline. Choosing the right tools to support your work can help you manage your work, connect with people, and more. Here are a few to consider:

• Project and task management software: Having one central platform to see who’s working on what and when it’s due helps you avoid missed deadlines. Some software options accommodate small teams at low or no cost. Look for features such as the ability to assign tasks, set due dates, and share files.

• Communication and collaboration apps: You’ll likely need a chat and video conferencing platform to meet with prospective clients and your team. Though emails work best for discrete tasks, a quick meeting can be an effective way to set expectations and do check-ins. Recording action items after video calls can help keep projects on track.

• Invoicing and accounting: You might start with spreadsheets, but it’s worth using an efficient system that unifies your billing, payment tracking, and financial reporting processes. Reliable invoicing software can minimize errors and administrative work and save you time. That said, you’ll still need a separate method (e.g., a simple accounting platform) to track revenue, expenses, and profits.

• Payment platforms: All businesses need a trustworthy payment processor. Stripe is known for being developer friendly, but you can still benefit even if you don’t code. Stripe supports one-time invoices, recurring billing, and payment links you can embed in your proposals or website. It also integrates with many systems you might already use for accounting or ecommerce to save you from chasing late payments or managing deposits. Once you create a Stripe account, you can easily accept credit and debit cards, bank transfers, and other payment methods.

How do you attract clients to your agency?

Once you’ve established your services, legal structure, and brand, it’s time to secure paying clients. Marketing might seem complicated at first, but it comes down to building relationships. Here are a few approaches that can help:

• Rely on referrals: Referrals can be a strong way to begin. Let your contacts know you’re open for business. Talk to former colleagues, classmates, or friends who might need your help or can introduce you to someone who does. Word of mouth can lead to new clients, especially if you’ve done good work.

• Use social media strategically: Find one or two platforms that seem consistent with your brand. Share mini case studies or behind-the-scenes glimpses of your work. Show how you solve problems. Ask and answer questions in public threads to display your expertise. But avoid spamming people with too much or irrelevant content.

• Focus your outreach: You could email or message potential clients; just be respectful of their time. Be concise about who you are, what you do, and how you can help. Show genuine interest in a person’s business or area of focus. This approach won’t work every time; but if you focus on contacts who might be the right fit for your agency, it can start relationships and lead to work.

• Consider content marketing: Writing blog posts, newsletters, or short guides can increase your visibility. By showcasing your expertise on relevant subjects, people who want assistance in filling skill gaps might find your content and want to connect. If you don’t excel in writing, think about using short videos or audio clips instead. The goal is to demonstrate your knowledge.

• Lean on your local networks: Meeting people in person is still an important part of doing business in some fields. If that applies to your business, consider attending local meetups, business associations, or specialized events. Making face-to-face connections can help people remember you more than a quick email ever could.

How much should you charge for your agency’s services?

Pricing is one of the biggest challenges for new owners. Setting the best rate depends on your experience, the demand for what you do, and how valuable your work is to each client. Here are three common pricing structures and their pros and cons.

Hourly rates

Pros

• Charging an hourly rate is straightforward to calculate.

• The client pays for the actual time you worked.

Cons

• This pricing method doesn’t reward efficient work. As you build your skills and work faster over time, you might be paid less if your rate stays the same.

• Hourly billing can make clients nervous if they don’t know how many hours a project will take.

Project-based fees

Pros

• Predictable pricing benefits both parties.

• Charging by the project rewards efficiency because finishing sooner doesn’t lower your income.

Cons

• This method requires a careful evaluation of costs. If you underestimate a project’s complexity, you might do extra work for the same flat fee.

• It’s more challenging to adjust your fee if clients add tasks while a project is in progress.

Retainers

Pros

• Retainers provide your agency with predictable recurring revenue each month.

• They can help you build a long-term working relationship with a client.

Cons

• This pricing structure requires trust. Clients might hesitate to lock in monthly payments if they don’t know you or your work well.

• You’ll need to demonstrate how you consistently add value every month.

What are the biggest challenges in starting an agency?

Running an agency involves more than creative brainstorming and marketing. It can be a tough venture with real obstacles. Here are challenges to prepare for:

Regularly finding new clients

Most agencies struggle when they don’t have a reliable way to bring in new business. It’s easy to get stuck in a cycle of frantic sales efforts when cash is low and pause outreach once a project is secured. This feast-or-famine cycle can be highly stressful, and not strategizing for the future can limit your growth potential. Keep your marketing efforts consistent, and continue to make contacts so you maintain a steady stream of leads.

Scaling as you secure larger projects

Delivering quality work might get more difficult as your client base grows. Suddenly, you need more people or more specialized talent to handle the workload. However, hiring without knowing how big your team should be (and what head count you can afford) can sink your agency. Define your hiring processes and the scope of each role so projects don’t spiral out of control. Good project management tools and clear communication can help, but the transition from a small shop to a large agency can be tricky.

Managing finances

Many agencies learn the hard way that monthly invoices don’t always translate to on-time payments—you might wait weeks or months for some clients to pay. You need to have enough money in reserve to cover your overhead and staff salaries in the meantime. Tracking how money comes in and goes out is an ongoing, everyday priority. Embracing features such as recurring billing and partial deposits can help you avoid cash flow issues.

How do you effectively scale an agency?

If your revenue is stable and demand is consistent, it might be time to expand. But growing too quickly or in the wrong areas can sink your agency. Consider taking these actions as you make plans to scale:

Hire the right people

At first, you might be a one-person agency. As your business grows, you’ll find you can’t handle every task alone, so you’ll need to hire people. Ask questions about these factors as you do so:

• Core functions: What functions are you missing? Maybe you handle big-picture strategy well but need a solid copywriter or an experienced media buyer.

• Type of employee: Do you need full-time, part-time, or contract help? Some agencies do best with a mix of contractors, while others prefer permanent employees for in-house collaboration.

• Quality: How will you maintain quality? Prepare a process for training and feedback. If multiple people produce inconsistent work, that can damage your brand.

Create repeatable processes

Formalizing how you deliver projects saves time and energy. Write down or record videos of how you handle topics ranging from bringing clients on board to transferring final files. Processes should include checklists, file-naming conventions, who should be cc’d on emails, and how to manage revisions or changes in scope. This might sound tedious, but well-documented procedures help you take on a higher volume while still delivering quality work.

Thoughtfully expand service lines

Once you have a small roster of satisfied clients, you might notice they have related needs. For instance, if you design websites, some clients might also want ongoing website management or help with search engine optimization (SEO). View this as an opportunity to expand your agency’s services. But be intentional: adding too many new offerings at once can strain resources or affect quality. Start small to test demand and monitor profitability. If a new service is profitable and sought after, it might be worth adding to your list of services.

Strengthen your brand

Growth often means updating your website to reflect your broader team, revamping your visual identity, or focusing your messaging on more specialized or premium offerings. As you grow, you’ll likely attract bigger clients who want to see proof of your capabilities, such as testimonials, case studies, and media coverage. Gather these, and display them so potential clients feel confident choosing you over someone else.

Maintain quality and culture

Even an office with only three or four employees should have an overarching ethos or guiding principle. How you treat each other, how you interact with clients, and what you value as an agency will come through in your work. If you care deeply for your clients or push creative boundaries, that’s part of your identity. Ensure new hires fit with the environment you’re building. And maintain quality in client interactions by being consistent in your communications, meeting deadlines, and delivering work that solves real problems.