When I took the decision to start my own agency just over 5 years ago, I knew what I wanted to achieve. I have been involved with the Internet since I was 12 years old, and have made money from it since I was 13, 10 years before I made a decision to start a ‘real’ business.
Early on I discovered how important it was to focus. A mentor of mine asked me if I wanted a lifestyle or an agency. I answered, with slight hesitance, in what I thought was the obvious way: “both”.
He went on to explain that, whilst I could have both, the path for each is very different.
A lifestyle is exactly what it suggests, where work revolves around me. I could enjoy a half-day on a Friday to ease into the weekend, and I could spend my Tuesday mornings at the gym. A lifestyle business is one that is built to keep.
An agency is a different beast. It’s a tapestry of systems and processes that are built to allow anybody with the right skills to complete a job. Once those things are in place, you bring in the right people to follow those systems. Effectively you are building to (at least have the option to) sell.
It’s very important to consider what you want from your business, because it will have a profound effect on your choices.
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Here are a few pointers to help you consider the differences:
- Lifestyle businesses typically require less work to become profitable, since you need to cover fewer overheads. You can work from home, for example.
- Don’t like people? Then building an agency probably isn’t for you. A lifestyle allows you to work with contractors/partners without the need for any employment and the responsibility that comes with it.
- Whilst there are exceptions to the rule, you will typically earn more, at the start, from a lifestyle business but less later on, since you only have one pair of hands. An agency can scale and can take on bigger and more lucrative projects. Having said that, many lifestyle business owners earn a very comfortable living.
- What happens if you become bed-ridden? How will your income continue without you there? Who will do the work? Who will pay your mortgage? It’s important to consider the very steep risks of placing all of your eggs in your own basket.
- Lifestyle work can feel very isolated. A team can often help you break through obstacles, and an agency office is typically a lot of fun. Networking groups can often help, as can renting space at a shared office hub or hot-desking at another agency.
- What’s the endgame? A lifestyle is fantastic when you’re young and have many working years ahead of you. But then what? How many years do you have in you, and how much money will you need to earn in order to stop working? Crunching the numbers will help you to understand the reality of what it takes to build a nest egg from your lifestyle business.
- Building an agency comes with significant opportunity to build a very comfortable income and to pay your team really well. It’s definitely not easy. Your focus should be on building the systems and processes, and creating the culture and environment needed to allow your talented team to flourish and do great work. With great work come prizes.
- Get used to stress. Agencies are fast-paced. That’s just the way it is, and it’s what we sign up for. But, they can be extremely fun places too, and you must take the rough with the smooth. As an agency owner, you’ll be regularly pulled out of your comfort zone, and it’s something you’ll have to embrace if you’re to grow. Your team will be counting on you…
- Agencies don’t need to be built to sell. Over time a successful agency can generate a healthy income, and having a team behind you will mean you have more free time to invest that income to other projects.
- Agency owners take on more responsibility. You will be employing people, paying rent, funding tools and computers, and essentially having more people relying on you to steer the ship in the right direction. Are you ready for that?
I’ll close by mentioning that there is no right or wrong option here. It’s entirely down to your personal goals, your character, and your situation. There are ups and there are downs, but you’ll have endless fun along the way.
The worst decision you can make is not to make a decision at all.
This series of posts are a summary of my experiences and learning over five years of building up Zest Digital, a fast-growth digital marketing agency based in Oxford. If you know somebody who might benefit from this post, please feel free to share it.