If you have a knack for branding, and are looking to take your career to the next level, you might be wondering how to start a branding agency.
This business can be extremely rewarding, but you’ll need a blend of creativity, dedication, and a strong understanding of how branding agencies work.
Here at Slam Media Lab (Slam), we’re helping you navigate this process, breaking down how to start a branding agency in 7 simple steps:
- Setting up your agency legally and financially
- Identifying your target customer
- Developing your processes and services
- Building your agency team or contractor network
- Understanding your branding agency finances
- Optimizing your website for search results
- Attracting your first clients with digital marketing
Established in San Francisco during the pandemic, Slam has since scaled to a $2M agency focused on Webflow, SEO, brand storytelling, and content marketing.
Throughout this time, we’ve helped over thirty clients slam dunk their branding and marketing, from software companies like Apalis to financial firms like Worklife Ventures.
Today, we’ll be sharing everything we’ve learned along the way about starting a successful branding agency.
If you’re looking for a full guide to building a branding agency that slams, check out our How to Start an Agency Course, where we break down everything we’ve learned while scaling to a multi-million dollar marketing firm.
Setting Up Your Branding Agency Legally and Financially
Before you can actually start finding clients and cashing checks, you’ll need to set up your agency’s legal and financial foundation. To do this, begin by determining your agency’s structure.
Typically, agencies will benefit from selecting a Limited Liability Company (LLC) or S-Corporation (S-Corp), depending on their earnings and preferences.
An LLC is generally the go-to option, as it requires minimal documentation and registration fees while still separating personal and business liability.
As you scale, you might opt for an S-Corp for tax benefits. With an S-Corp, agency owners can pay themselves as employees, mitigating the self-employment tax.
This structure also entails additional paperwork, so it’s important to weigh the benefits of each structure before moving forward.
Opening a Business Bank Account
Once you’ve determined and registered your business structure, you can open a business bank account under your branding agency’s name.
To do this, you’ll need to apply for an employer identification number (EIN). This number is essentially a social security number for your agency, which is necessary to open a bank account.
Once you’ve gotten your EIN, which only takes a few minutes, you can head over to your favorite bank or credit union to open a business bank account. This could be a local credit, or an online bank, like Ramp or Mercury.
By setting up a separate business bank account, you can simplify your bookkeeping and taxes, establishing a secure foundation to start charging clients, paying expenses, and employing a team.
Identifying Your Target Client
With your legal and financial groundwork in place, you can begin searching for your ideal client.
Great branding looks different in every industry, so if you want to resonate with potential clients, you’ll need to focus on branding in their particular field.
Niching down also makes it easier to get familiar with your target client’s challenges and goals, allowing you to craft content that resonates with them on a personal level—a level that’d be almost impossible to achieve when targeting a wide variety of industries.
To determine which industry you’ll target, identify a crossroad between your experience, interests, and network. By selecting a target client that intersects all three components, you’ll be well-equipped to not only find clients but also brands you’re passionate about.
For example, at Slam, we specialize in brand identity for nonprofits, working with clients like Equis Labs, Fresh Approach and Prepared to Teach.
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Developing Your Processes and Services
Once you’ve chosen a target customer, the next step is to determine how you’ll help them. This journey begins by understanding your target client, underscoring the importance of niching down.
Start by doing some research on the most memorable brands in that field, and take some time to understand what led them to that spotlight.
Then, research some “average”, or less memorable, brands in your target industry and identify where they are most commonly falling short.
For example, at Slam, we’ve honed our offerings to cater to our target audience through five brand strategy and identity services:
- Brand Strategy
- Brand Identity
- Art Direction
- Illustration, Motion, and Graphic Design
- Email Design
After you’ve determined which services you’ll offer, the next step is to establish how you’ll provide them. By outlining clear service processes in the beginning, you’ll position your agency to not only retain but also enhance quality as you scale.
For example, these processes might outline your client onboarding processes, service performance reporting, customer relationship management practices, and, of course, your brand identity and strategy service processes.
These processes are crucial for the long-term success of branding agencies, so we’ve actually dedicated an entire module of our How to Start an Agency course to help you establish your onboarding, operations, and other processes.
Building Your Agency Team or Contractor Network
Your team or network is the backbone of your agency, playing a critical role in the quality of your services.
However, every agency must ask the same question: employees or contractors?
Starting off, contractors, often called freelancers, provide the flexibility and cost-efficiency that many branding agencies benefit from in the beginning. You can find and vet these contractors on a variety of platforms, such as Fiverr and Upwork.
With contractors, you can adjust your workforce to accommodate your current demands, which is often helpful for new agencies with fluctuating workloads.
However, you’ll typically have less control over your contractor’s schedule and overall commitment, urging larger agencies to turn toward in-house employees.
In-house employees allow you to build a more committed and coordinated workforce, which can pay large dividends if you foster a positive agency culture.
Positive workplace cultures benefit from increased employee productivity and loyalty, making it crucial to employ the following strategies in either employment structure:
- Schedule regular team meetings
- Be supportive and flexible
- Encourage open communication
- Provide opportunities for growth
While the choice between an agency team or contractor network depends on a variety of factors, both structures will benefit from these strategies.
To ensure your team and projects are organized, our team at Slam has compiled a variety of resources, including a Notion Meeting Notes Template, a Notion Wiki Template, and a Notion Feedback Template.
With these resources, you can save time and resources by keeping your team on the same page, both literally and figuratively.
With your team in place, the next step is to keep them busy with a high-converting website.
Understanding your Branding Agency Finances
With your target client and service offerings in place, it’s time to take a look at your agency’s finances, from the startup costs to the profit margins.
By taking the time to understand your finances ahead of time, you’ll establish a strong and profitable foundation to build your client base upon.
So, let’s dive into the costs, revenue, and, most importantly, profits a branding agency can make.
How Much Does it Cost to Open a Branding Agency
Opening a branding agency entails several upfront and recurring costs. However, these costs can vary widely depending on how aggressively you pursue this venture.
When defining your financial operations, it’s important to consider the following:
- Office Space: While a physical location is not necessary, many agencies seek offices to promote visibility and productivity. The costs include rent, utilities, and office supplies.
- Technology and Software: Investment in high-quality design software, project management systems, and customer relationship management (CRM) tools is crucial.
- Marketing Expenses: When establishing your branding agency online, you’ll incur web hosting and domain fees, as well as marketing expenses to drive traffic to your site.
- Legal and Administrative Fees: When registering your branding agency legally, you’ll incur registration fees, as well as any necessary consulting, insurance, or licensing fees.
- Employment Costs: As you scale, you’ll need to expand your team. These costs include not only salaries and training but also all expenses and taxes associated with payroll.
While the costs vary greatly depending on your location and strategy, these expenses provide a strong foundation to forecast your branding agency’s expenditure.
How Much Can a Branding Agency Charge?
Branding agencies can charge anywhere from a few hundred dollars to hundreds of thousands of dollars. This amount depends on the project’s duration and requirements, as well as the agency’s experience and reputation.
Regardless of the project, branding agencies can benefit from a variety of payment structures:
- Project: The price is calculated using a predetermined formula. To determine the price, estimate the total project costs, including labor, and add a margin to protect profits.
- Retainer: The payment grants clients access to a specific amount of an agency’s time and resources on a monthly basis.
- Time: The total price is based on an agreed-upon hourly amount. This structure ensures the project covers your labor costs, but it is often unfavorable for large-scale projects.
In each of these methods, it’s important to reference the costs established above to ensure each offering meets your desired profit margin. As your agency gains experience, you can gradually increase these margins to reflect the increase in value.
Developed a high-quality proposal can also help you attain higher-value clients by appearing more reputable and organized. To help you with this, our team at Slam has just released the Marketing Proposal Template that we’ve used to close 100K+ deals.
What’s a Sustainable Profit Margin for a Branding Agency?
Now that you know how much you’ll spend and earn, let’s determine how much you’ll take home.
To calculate your agency’s profit, begin by totaling your monthly expenses and revenues. Then, subtract your estimated taxes to determine the take-home profit.
To identify where your agency’s margins lie, divide your profit by your total revenue. This value, typically expressed as a percentage, is called your profit margin.
For example, if you’ve profited $2,000 from $8,000 in services, your margin would be 25%. Most agency margins float around 10-20%, but this value will often fluctuate on a monthly basis.
Optimizing Your Website for Search Ranking
An optimized website and portfolio allow you to get recognized in search results and make a strong first impression with potential clients. This includes everything from captivating copywriting and design to strategic SEO practices.
To start getting recognized online, you’ll have to identify which keywords you’ll rank for. To do this, consider which queries you’d like your website to appear under using Slam’s keyword research template.
Once you’ve identified your keywords, implement them into your metadata and content to show search engines what your website is all about.
It’s important to continuously monitor SEO and optimize your keywords, ensuring your website remains competitive in the search results.
With this foundation, you can move into technical SEO, which includes everything from your sitemap to page speed. To simplify this process, we’ve compiled a comprehensive technical SEO audit tool for our readers.
With these considerations in place, you can start driving traffic to your website through keyword-targeted content. For example, Slam’s “Agency RFP” article ranks first on Google, which means we’re the first resource potential clients find when searching for this topic.
By following these strategies, we’ve also helped various clients skyrocket their search ranking. Among them, Worklife Ventures’ SEO has seen substantial improvements, helping them reach over 500k visitors each month alongside our team at Slam.
By implementing these tactics, your branding agency can do the same, generating organic traffic from your desired search queries.
Once traffic hits your site, you must ensure a captivating experience through the following tactics:
- Implement your brand identity
- Ensure user-friendly navigation
- Optimize for mobile responsiveness
It’s also crucial to ensure quick and easy navigation to your portfolio page. This page will often determine whether or not they reach out, making it crucial to develop a high-quality portfolio.
A high-quality portfolio should highlight your best work, providing insights and case studies into your creative process and the results achieved.
By doing this, you’ll not only demonstrate your branding expertise but also your problem-solving skills and credibility. To ensure your website is high-converting, from the first impression to the call-to-action, check out Slam’s Website Launch Checklist.
With these strategies in place, you can start generating leads through your website.
Attracting Your First Clients with Digital Marketing
Once you’ve published your website and portfolio, you can start generating leads and attract your first clients.
To do this, you can employ a wide variety of strategies, which we’ve dedicated an entire module to in Slam’s How to Start an Agency course.
At Slam, the most common ways we find clients include:
- Targeted Groups: Share advice to relevant groups to build rapport.
- Social Media: Build authority through valuable social media content.
- Cold Email: Reach out to target clients directly via email.
- SEO & Content: Demonstrate authority to search engines and potential clients.
- Referrals: Leverage your network to ask for referrals.
- UpWork: Apply to relevant jobs on UpWork.
By implementing these strategies, you can build a multi-faceted marketing plan to attract your first clients on multiple fronts. In another article, we break down exactly how to get clients for a marketing agency, based on the strategies we’ve used to scale north of $2M.
How to Start a Branding Agency — Key Takeaways
To start a branding agency that slams, you’ll need to understand each component of your internal processes and service strategies. While this article provides the foundational strategies to build a branding agency, this is just the tip of the iceberg.
In Slam’s How to Start an Agency course, we’ll break down everything we’ve learned while scaling our agency to over $2M in revenue.
Each module breaks down a critical step in building a successful branding agency, sharing over 20 agency tools, templates, and 10 hours of guides throughout the course.
- Blueprint to creating your agency
- My Journey (Slam’s Origin Story)
- The role of an agency CEO
- The company setup
- Finding your niche
- How to get your first clients
- Setting up services & pricing
- Crafting a winning proposal
Through hard work, consistency, and the implementation of these strategies, you can build, operate, and scale your branding agency like Slam!
Want to start a different type of agency? We’ve gotchu covered:
- How to Start a Content Marketing Agency
- How to Start a Creative Agency
- How to Start a Facebook Ad Industry
- How to Start a PR Agency
- How to Start a Google Ads Agency
- How to Start an SEO Agency
- How to Start a Social Media Marketing Agency
- How to start an Email Marketing Agency
- How to grow a Digital Marketing Agency
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