What To Consider When Starting An SEO Agency

Sep 9th
posted in

Starting your own SEO business can be a challenge. In DMOZ, a directory often hostile to SEO listings, there are still over 1,018 SEO service companies listed. Do a Google search on SEO companies, are you'll see.....quite a few more!

Ok, it's a big planet, and there is room for many operators, but it's true to say that in the SEO game in 2009, no one is short of competition.

There is a lot of competion because there is a low barrier to entry. In order to enter the SEO market, someone only need put out an open for business sign, in the form of a website, and they are as much an SEO Agency as the next guy.

Maintaining a profitable business is another matter, of course.

If you're thinking of starting an SEO agency, here are some aspects you should consider, and some recommendations on how to position in today's marketplace. If you're an SEO who has started their own business, and made a success of it, it would be great if you could share your experiences in the comments below. What are the things you know now, that you wished people had told you when you started?

Essential Considerations

1. You

The first part of your plan should be all about you.

What are your strengths and weaknesses? Are you a self starter, or do you prefer being given work to do? Take a long look in the mirror and be honest with yourself: is running a business really something you want to do, or is this a means to avoid looking for employment? How suited are you to running a business?

No doubt you can see where I'm going with this. There are personality traits people have that make them suited to running a business, including a desire for independence, being a self-starter, and having the ability to take financial risk. One such risk is the lack of steady salary. Do you have a means of financial support? Savings? If you do, it will make life a lot easier. If you don't, consider building up that safety net before you start.

Once you've decided that this is definitely for you, great! Working for yourself can be an immensely rewarding thing to do.

2. Strategy

Where are you going and how will you get there?

Map out a business plan.It need not be complicated. In short, what can you offer that your competition can't? How much will you have to sell in order to cover your expenses and make a profit? How, exactly, are you going to sell your services and execute delivery?

Once you get a feel for the figures, it will make it easier to see if your ideas are achievable.

3. Finances

How much money will you need in order to get out and sell, and then to provide the services? How much money will you pay yourself? Do you need staff? Do you have an accountant? Do you know your break-even figure? How will you manage bad debts or late payments?

All business ultimately comes down to maths. You need to bring in more than you pay out. Failure to do that means the business fails.

Two important areas are cashflow and value of a good accountant.

Business lives or dies on cashflow. A business can be selling well, but if it doesn't have enough money in the bank to meet payroll or rent at the end of the month, it is finished. Try to arrange sufficient overdraft or investment to ensure you can survive between bill payments. Clients often pay later than you want them to.

Secondly, an accountant is worth their weight in gold. Not only do they take on tedious business of tax filing, they make sure you are claiming all the deductions you're entitled to. For example, your computer equipment, your use of home, your broadband, your electricity use can all be charged to your business. This reduces your costs and tax obligation.

4. Your Idea

Does your business serve a customer need or want? Can competitors easily copy what you do?

These are two critical areas. Many people go into business because they want to do something they like doing. That's ok, so long as there is enough consumer demand. However, think about the number of actors and musicians out there. Most aren't making much, if any money. This is because they are pusrsuing a job they enjoy, and largely ignoring supply and demand considerations. Ignoring supply and demand is ok for actors, but it's poor way to run a business. What can you supply that there is a ready demand for? Can you create new demand?

Secondly, the barrier to entry. Because it is so easy to start an SEO business, you'll need something else to differentiate yourself, other than just having a website. A website is the base level entry point. What have you got that others can't copy? Are you able to service a geographic locality better than other providers? Do you know a particular market vertical well i.e travel/fashion/finance/auto? Do you have a name/brand people know? Can you leverage reputation and contacts from your previous career?

5. Marketing and Sales Strategy

This is part of your business plan, but it is an area that requires special attention. Without a marketing strategy, how are people going to know who you are? How are you going to sell to them? If your answer is SEO or PPC, you'll be up against a lot of competition. Those channels are saturated, and in most cases, there is little to distinguish one service provider from the next.

How do you intend to implement your strategy? What channels will you use? Have you allocated time and money to that strategy? For example, if you intend to speak at conferences, you need to budget for the travel and attendance. You also need a plan for who is going to do the work while you're away marketing and selling.

The sales cycle can be long and tedious. The bigger the client, the longer sign-offs can take. Typically what happens is that many prosposects will all sign off at once, after months of indecision! Can you scale up quickly if a lot of work comes in? Will you turn down work?

The Challenge In 2009

The specific challenge to SEO services providers in 2009 is differntiation. There are many people offering services, so how do you stand out from the rest?

One way is to zig when other zag. Is everyone heading off to the same SEO conferences, saying much the same thing? Instead, how about going to the conferences no one else goes to? Travel industry conferences. Dental conferences. People in those industries need SEO, and you might be the first person who has ever talked to them about it! With careful selection and a little luck, you might corner a lucrative, untapped market.

Do companies really need SEO services? Perhaps they just need their own people trained. Can you offer in-house training courses? How about providing a number for them to call whenever they have an SEO question? Be the go-to guy for a number of small firms who may not be able to afford a full seo service, but might be able to afford an hour of advice or coaching each month.

Partner with design/devlopement companies. Perhaps they can't afford to hire a full time SEO on staff, but if you sign up 4-5 design companies, and offer your SEO service as an add on, you should enjoy a steady stream of work. They do all the sales work for you, you just do your part, and bill the agency. They take a cut.

Got any other ideas on differentiation, or war stories about running your own business? Please feel free to comment :)

Published: September 9, 2009

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Comments

September 9, 2009 - 6:03am

Great Post. Thanks for the information. It will be very useful to the seo newbies. Can you tell me what is and how to get 100% Ethical SEO agency?

September 9, 2009 - 6:07am

There was no mention of ethics in the above article largely because (at least as far as it applies to SEO) the marketing angle of ethics is typically one built off a lack of creativity rather than one built off of servicing customer needs.

September 9, 2009 - 6:20am

I'm only about half on my own and half working for someone else but I have to say that, from what I have seen, if you can get some kind of retainer agreement with a few decent-sized clients, that is the way to go. This goes without saying that you are able to offer a bit more than just the usual generic "SEO services". For instance, you can manage PPC campaigns, write content, help with site and landing page design issues, do e-mail marketing campaigns, write press releases, etc. We have one pretty good sized client like this that covers a lot of our budget. Of course, it helps if you have access to talented designers, great programmers, and a cadre of low-priced copywriters.

You're right in that these clients are not easy to get. But one or two is all you need for a decent business. Way better than scrambling around trying to help a hundred small businesses for a few hundred bucks each.

As always, enjoying this blog immensely.

-Tim

September 9, 2009 - 6:40am

Nice post.. but I'd much rather use my seo skills to rank my own websites, instead of dealing with a bunch of clients in a fierce marketplace...

September 9, 2009 - 4:37pm

I'm really interested in learning more about partnering with design/development firms. I've only ever done SEO/Internet Marketing for my own projects, and have never had a position prior to getting into SEO which required me to manage client relationships. Working through other firms seems more appealing to me, although I realize they will be my clients.

When working out cost structure, do you bill by the hour, or set up project based pricing?

September 9, 2009 - 7:33pm

I have to side with mind3 a bit here. It's nice to have a few good sized clients on retainers.

Even though you will find yourself doing everything from SEO & copy writing to sales force automation to PPC to design & development – success come so much faster.

These days cycling retainer clients into performance-based deals is more appealing. Especially when you control the entire site & message.

I'm curious if others think performance-based deals as a model can be a good niche itself?

I find myself cultivating clients into retainer and performance concepts only after I've built a great relationship with them. Although, with a good contract many businesses can jump at these deals, you just need to know which ones you can hit out of the park!

Incidentally, being a likable person & making yourself indispensable while providing your clients with a positive ROI always makes good business sense.

September 9, 2009 - 10:24pm

I am not a person who thrives by getting his way, or by being social, or jumping in the fire and then figuring out how to stay cool.

I have to work on those three. I am a systems thinker so SEO likes me. Having been in marketing for over three decades, I followed it to the web and SEO SEM was a natural next step.

Much of it is traditional marketing on the internet. Fundamentals plus creative ideas that make the grade and are keepers.

Most things don't work and that's the way it has always been. You can make more money than you spend and still go out of business. There is no absolute rule and little security. Knowing that, is your best friend.

There are plenty of flash in the pan ,take-the-money and-run jerks and there always have been. Nature of the beast.

My clients have learned that I give them results but they still want things they should not want. Overnight results,a site with four pages to be successful, etc. It's all part of the way marketing works and I long ago relaxed with that.

If there's a secret it is these three things combined:

1-Approach everything as if you don't know the answer,( resist all temptation to be a hot shot know it all)

2-face the harsh realities of each situation as well as the joys,

3-and something will prompt you to act. Then act.

I know this is abstract. That's what works for me.

September 14, 2009 - 4:09pm

This post is very relevant to my own situation. I started my own SEO company about 5 months ago - www.dotcomdigital.co.uk and, having had no experience of setting up my own company before, I can honestly say that it has been a struggle.
I actually don't find getting clients in too much of a problem. My strategy starting out was to partner with 2-3 local web design agencies who could refer clients onto me in the short term. Job done, within about a month I had partnered with 4 agencies who, between them, have probably brought in 6-7 clients. This, however, brings its own problems because you are dealing with two sets of expectations for every client - the agency's expectations and the client's expectations, that are communicated to you through the agency.
In addition to partnering with agencies I managed to get my website ranking reasonably well quite quickly, which brings in a few enquiries.

My main problem, however, is cashflow. I started out assuming that everyone would just pay within my payment terms but sadly this isn't the case. I'm struggling to get payments in on time which is putting a lot of pressure on me and the company, so much so that i've accepted a 3 month full-time contract with an agency in order to get some proper money in.
With hindsight I think the best thing to do is request payment up front or stress to the new client that work will not continue until the previous month's invoice has been paid. It sounds obvious but until I experienced these problems it didn't really cross my mind.

The other thing I never really considered is how lonely working for yourself can be. I can go days without actually seeing anyone which can be pretty hard. I'm also working from home for now, which is another difficulty. It seems like a great prospect before you begin but cabin fever soon kicks in and you end up hating the site of your own pad.

I know i've painted a pretty bleak picture of starting out on your own but it isn't all bad. I've got some great clients who are pleased with the work i'm doing, I don't have to adhere to policies and practices that I don't agree with, and 5 months in i'm already earning a reasonable salary from my venture.

I would just advise anyone considering starting their own company to seek professional advice first. Even if it's just to help you work out an effective invoicing procedure, it will remove a lot of stress and allow you to progress more quickly.

September 15, 2009 - 12:07am

This is another big advantage of running a few publishing sites outside of the consulting gigs...that revenue helps smooth out the peaks and valleys in the feast or famine consulting world.

September 14, 2009 - 11:09pm

Great tips. This post is quite timeless in nature. The strategy doesn't just lend itself to SEO business, but anyone looking to go into business for themselves.

Currently my husband and I are doing just that. SEO is a huge part of what we do as well as social media. Both of which I feel targets such as dentists and doctors like you said are lacking quite a bit. It will be interesting trying to find a way to reach this target.

I will say we jumped in full force without really a financial budget for it. We are young, right out of college with a successful mentor guiding us.

Really time is your best friend. Using it wisely and optimally. It was great working from home, but once we got into the office I realized just how much I can get done in 8 hours.

Good luck to all venturing out and taking a risk. It's huge!

September 15, 2009 - 10:28pm

Effectively managing and forecasting cash flow is an enormously important task for any business. It's even more pronounced for a small business with more limited resources.

To start with, ALWAYS get money up front before starting work on a new project, especially when dealing with a new client. Not only does it offset risk, it helps finance the cost of the project.

Once a client has established a solid payment history, you can potentially offer them better payment terms.

September 16, 2009 - 4:58pm

I've been a freelancer for a long time, but 2.5 years ago I started a company and here is some of what I've learned:

1. Invest in your good customers, raise your price for the bad. A bad customer could be anyone who has unrealistic expectations, only wants to price shop, who you need to educate too much, or who pays but only after 60-90 days. Sometimes you have to put up with these guys for a while, but your life will be much less stressful if you focus on the good customers.

2. This of course implies that you are finding new customers like crazy. My motto is "never stop finding." Even when I'm booked, I'm taking every opportunity to tell people what I do, be friendly, offer free advice, etc. in hopes that I will be at the top of someone's mind when they say "I need an internet marketer." I would rather find too many and have to turn some away than be stuck in a position where I can only "take what I can get."

3. Keep a good work-life balance. There are people who are not fit to run their own business because they need to be told what to do. There are also people who work TOO hard and their job takes over their life. Sometimes this is what it takes, especially in the startup phase. But recently I've committed to work from 5am to 5pm and then call it quits. I've decided that no problem at work is big enough that I can't solve it in 12 hours and nobody can expect more of that. This allows me to make time for myself, for other commitments at home and in the family, and it has contributed greatly to my happiness.

4. Be a cheapskate. Even the richest people I know are total cheapskates. Don't run out and get a line of credit just so you can max it out on all the things you think you need to run a business. There is usually a cheaper alternative that will work just fine. Wait a week before buying anything big to think about if you still need it. It's also nice to ask your wife if she thinks you need it. Mine usually says no :). But don't be afraid to spend money when you have an opportunity and can make a calculated investment.

With regards to the article, I've actually only had a handful of customers ever "stiff" me entirely on the bill. Usually with good communication and proper expectations, this does not happen.

September 16, 2011 - 8:01am

I've been in the SEO industry for 2 years now and setting up a business in my home city.. I completely agree and thoroughly enjoyed reading and learning from the tips provided here. Thanks! Do take a look at our website, its a humble start called Prolore

Feel free to contact for any feedback. Everything will be greatly appreciated! :)

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