10 Mistakes People Make When Starting a Digital Marketing Agency Focus on showing customers the value you bring to the table, gain their trust and make them see you're the expert they need.

By JC Hite

Opinions expressed by Entrepreneur contributors are their own.

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Starting a new business comes with unique challenges, and those first years are essential to your long-term success and growth. If you're starting a digital marketing agency, you will run into specific challenges and may make some of these common mistakes. Here's what they are and how you can avoid them.

Mistake 1: Not setting the right expectations

Like in any other type of business, setting the right expectations for your clients is a must. Don't overpromise, especially when you're not sure if you'll deliver those results. It's better to let go of a lead with unrealistic expectations rather than closing the sale and having to deal with an upset client along the way. Be honest with yourself and with them.

Mistake 2: Going into debt

Don't go into debt. Debt can often represent a problem for your business because of the unknowns of a new endeavor. In a moment of crisis or in the event that you need to downsize your expenses, having that fixed payment can take a toll on your business. Remaining debt-free as much as possible will be a huge asset for you as you start out.

Mistake 3: Not having a budget

Having a budget is essential for handling the ups and downs of a new business. You need to know precisely what you're doing with your money, what your expenses and profits are and where you're heading. Understanding where your money is going every month is a key part of the business that many entrepreneurs are scared of, but it's a powerful tool that puts you in control.

Related: Dave Ramsey's 5 Budgeting Tips for Small-Business Owners

Mistake 4: Not working hard enough

Digital marketing agency owners are often attracted to the digital aspect of the job because they are looking for a job they can do from anywhere. The freedom of being your own (online) boss is appealing, but you'll have to work hard for a few years to achieve it.

Building a strong foundation is crucial and you have to work harder than ever. If you were working 8 hours a day in your previous job, you may have to give 10 or more to your agency. However, the sacrifice will pay off in the future.

Mistake 5: Trying to do it all

Whether you're an expert or not, get help. This may mean a team, a learning platform, new processes or a mentor. Focus on growing and managing your business. Try to delegate everything else.

Another option is to outsource your services to a white label company, especially when you don't have much experience in all the digital marketing platforms. Outsourcing is not only a cost-effective way to scale your agency but a way to offer higher quality and expand your offerings.

Mistake 6: Not understanding the closer's patience

You have to understand your client's ability to close leads. For example, a lawyer in New York doesn't have the time or patience to set up appointments from 1,000 leads. Analyze the stage your client is in, the type of leads they need and their capacity to follow up on them. In some cases, quality actually beats ROI.

Mistake 7: Signing long-term contracts with service providers

When you're starting an agency, your recurring income is often low and your churn is often high. Don't commit to long-term contracts with your service providers. Instead, choose to pay month-by-month even if the cost is higher. Paying month-to-month allows you to cut costs quickly if you're having a rough month, instead of being stuck with high fixed payments.

Again, having a budget will help you accomplish this. If you have a budget and you stick to it, you shouldn't have issues affording a monthly contract. And if you do, then you can cancel any time.

Mistake 8: Outsourcing without knowing how to measure performance

Outsourcing can be the key to your agency's growth, but only if you understand and know how to measure performance. Agree with your outsourcing partner and set your expectations correctly. On the other hand, if you don't know much about performance and you're in the process of learning, make sure you hire a white label agency that you trust completely.

Related: Learn How to Grow Your Business on a Budget by Outsourcing

Mistake 9: Underestimating difficulties

Starting and growing a business is difficult and wanting the income is not enough to motivate you in difficult times. Find a commitment, whether it's providing for your family, paying for your daughter's college, buying a house or making a difference in other's lives. Committing to something bigger than money — and bigger than yourself — will keep you focused on the right things.

Mistake 10: Charging way too much

Don't overcharge. This doesn't mean you'll work for free, just that you'll charge a fair price. Your price should be enough to make a profit, with room to work and get good results for your clients. Later on, when your clients see the value of your work, you can think about increasing prices.

The key to long-term success is retention. Keep your clients happy and don't overprice your services. Let them see the value you can bring to their business, gain their trust, and make them see you're the expert they need.

Wavy Line
JC Hite

Entrepreneur Leadership Network Contributor

CEO / Founder of Hite Digital

JC Hite is the CEO and founder of Hite Digital, a white label digital marketing agency. With a passion for business and people, he’s successfully scaled his agency in just two years and counting. Now his companies help other agencies to do the same.

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