Podcast Description

You don’t need an office to start an agency.

In fact, there are many agencies that got their start in a Starbucks, using their wifi.

When I started, I was in my house, in my pajamas, and a few years later here we are.

Knowing how you personally can help people is the first step to starting your agency.

But should you start a new agency, or is it easier to buy an existing one?

Watch as @jswenk and I give the low down on getting into the agency game.

I hope you enjoy the podcast!

 

Podcast File

Is it Easier to Start an Agency or Buy One?


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Podcast Transcription

Welcome to the Facebook Marketing Ninja podcast. My name is Jimmy. I’m the Associate Creative Director for Manuel Suarez here at AGM agency.

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Today’s episode is titled, “Is It Easier to Start an Agency or Buy One?”

You don’t need an office to start an agency. In fact, there are many agencies that got their start in Starbucks using their wifi.

When Manuel started, he was just hanging out in his home with two close friends. And a few years later here we are. Knowing how you personally can help people is the first step to starting your agency.

But, should you start a new agency or is it easier to buy an existing one? Watch as J Swenk and Manuel give the low-down on getting into the agency game. Check it out.

 

In social media, if you try to just sell products, you’re not going to succeed unless you have a very unique product that is revolutionizing.

You have to figure out a way to provide value first. And, what is your superpower?

So, the same thing for an agency. How can you help somebody?

 

The Interview with Jason Swenk

Steps on Building Your Business

Manuel: Jason, is there something more affordable to create a business?

Like what are your thoughts on like what I just said at the intro before I brought you in of the ease financially, the financial burden that it really is for a person as an agency owner to start compared to other businesses out there.

What are your thoughts on that?

Jason: I mean, all you need is a computer and you don’t even need an internet connection, obviously. Cause it sucks it here, but you can go to Starbucks, all right?

Manuel: Go to Starbucks and start an agency there. That’s right.

I’m sure you’re seeing those stories, right, Jason? People that have started their agency in Starbucks?

Talking about internet connections, it’s pretty awesome.

Jason: Oh, you know, all the time. I mean, it’s… or they can go to…

Manuel: We got you back now but we lost you for a second.

Jason: Oh, there we go.

Manuel: So, you do need an internet connection, guys, all right? You do need an internet connection. Let’s just be clear, but it can be Starbucks’ internet connection.

Jason: That’s crazy. I, literally, I’ve done like literally 30 interviews in the past week here and it’s been all great.

So for everyone listening, I sincerely apologize, but I don’t know what’s going on.

Manuel: That’s okay. We’re making it happen, Jason. So, so yes. All you need is the connection and a computer, right?

Jason: And the knowledge to know how to do something well for someone like I get a lot of people reaching out to me. They’re like, Hey, can you actually help me start an agency?

I’m like, cool. You know, what’s the superpower? How can you know, how can you help people? They’re like, well, I need to figure that out. I’m like, you’re not ready to start an agency.

Like, you have to know how to do something really amazing for a particular audience.

Manuel: That’s step one, right? That’s the number one step. You’ve got to figure out how you can help people, always.

Jason: Exactly.

Manuel: And it’s interesting because that’s the way it works not only as an agency but as a brand.

In social media, if you try to just sell products, you’re not going to succeed unless you have a very unique product that is revolutionizing.

 

Elon Musk (Image from The CEO Magazine https://www.theceomagazine.com/business/coverstory/a-touch-of-madness-elon-musk/)

 

If you’re not Elon Musk creating revolutionary products or things that nobody else invents, you have to figure out a way to provide value first and what is your superpower.

So the same thing for an agency, how can you help somebody?

 

The Roadmap to Finding Out Your Superpower

So, Jason, what is the roadmap for a person to figure that out? What are your thoughts on that? What do you tell somebody that… how do they figure out how to help somebody?

Jason: Well, I mean, you have to, that’s a loaded question, right?

Like you have to, like, with my case, like I knew how to do… Design websites and do user experience.

And then I figured out, you know, how to get them, you know, on listed on all the directories, because Google wasn’t around back then. Right?

Like literally it was like AltaVista and Excite, like things that are not even around anymore. So you have to make sure you do that.

 

But going back to like your question about: What’s the step to start an agency?

Actually, an easier part is to go buy an agency that’s already working.

Like, literally, if you want to, like, even if you don’t even know how to do a particular service and you want to get into this amazing industry, go find an agency that’s profitable, that’s not… and you can buy that.

What people think is, “I can’t because I don’t have the revenue”, but you can get, like, especially in these times you can get interest-only loans for very cheap.

And then if you buy a really successful agency, you know, they’re going to, you know, you’re going to be able to make those payments back and then some.

And then in the next couple of years, you’re going to own it fully outright, and you can do that over and over again. And that’s how, you know, we’ve grown so quickly in the second agency is through acquisitions,

Manuel: Definitely a subject that I’m very interested in, Jason. Would you say that by going to a place like sba.gov, you can probably get a huge loan and, and use that to buy an agency?

Jason: Oh, most definitely. And talk with your local bank, your credit unions, all those…

You know, there’s a lot of opportunities out there, or there’s also a lot of grants out there sometimes that I’ve seen people utilize in order to, you know, make purchases. A lot of times I’ve talked to agency owners and they’re like, look, we have a ton of cash in the bank.

And when you buy an agency, let’s say you buy a million-dollar agency. You don’t have to give them a million dollars. What you can do is you can give them a quarter or 50% of whatever you valuate their agency for.

So let’s say they’re a million-dollar agency. They make $250,00 in profits. So their margins are 25%. So I would value their agency at maybe $500,000 in revenue.

So, all you need to really purchase them is a $250,000 loan. And then the rest, you can pay them in their performance of agency of how it actually does.

So it actually makes it a lot more attainable in order to buy a business because a lot of times, and I remember when I first started, I used to think, you know, I have to come up with millions of dollars to buy an agency. And you don’t.

 

Why would an agency owner be interested in selling

an agency that’s profitable?

What’s happening with these guys?

Jason: Well, you never know. It’s kind of like a duck on the water, right? Like they all look calm and cool on the top, but if you really looked under the surface, their legs are moving a thousand miles per hour, and it could be a number of different things.

They could be like, “Hey, I want to take some chips off the table.” Right?

So when we come in and purchase an agency and we purchase a very healthy agency, that owner may want to take some chips off the table because…

 

There’s always uncertainty.

You never know what’s around the corner.

 

And so we’ll be like, we’ll give you a 50% here. And then you have an upsell or you know, an opportunity to make, you know, 10 times that you know, in the next couple of years, cause you own part of the other.

There could be, I’ve even heard reasons that their lease is up. Like, I’ve literally heard that several times because when you sign a lease on your building, it’s like five years, sometimes three years, 10 years.

They’re like, Hey, it’s up. I don’t want to do it. Or there’s something in their agency… we get to a point like, you know, part of my origin story, when I went to go interview, there were things I hated, but maybe they didn’t figure out what they actually needed to do.

Or they just got to a point where they think the grass is greener on the other side. And they want to go develop a software product, which I’ll tell you…

The grass is greener on the side you actually water.

So you just got to figure that out. Yeah. I developed an iPhone app and I hated it. I was like, I need to get back to the agency world.

Manuel: I like that – a grass is greener on the side that you actually water. Absolutely. Never heard that one before.

Good, Jason. So, I know, I’ve seen this website that I followed for a long time called websiteclosers.com, I think that’s what it’s called. And it’s a website.

I don’t know if you heard about this one, but they sell a lot of brands. I haven’t seen agencies being sold there, but it’s people that have… maybe they’re done with it. Maybe they want to have an inheritance for their children. Maybe they, I don’t know. They just gave up on it and they’re selling their brands.

So I have seen this over the years. I have never acted on any of them, but it’s something that I find interesting because I’m sure there are opportunities, especially because my, I can tell you a viewpoint that I have as an agency owner.

I also talked about this with you on your podcast, Jason, but I happen to own a brand that, it’s the biggest client for my agency. I own it.

So, so it’s like I get both sides of it. Obviously, I’m the marketing agency for it and I have a vested interest in it because I own it.

So it’s almost like I built this machine and this machine is incredible. And I have this machine with a lot of different skills in it – video editing, copywriting, Facebook ads experts, ManyChat experts.

And I have like all these people that are an incredible talent and I use these people to grow that particular brand.

So for me, I also have this intention of building a machine that I can bring companies that I own also for this machine because then you start building a lot more wealth along the way.

I know that I can like they say flip a house, I can flip a business because I have the marketing knowledge to flip it and make it successful.

So that’s one of the things that I have as an end goal with the marketing agency that I am building this agency that I can pour any marketing into it and any brand and help it grow.

And I have been very successful with my brand. It’s called NaturalSlim. It’s co-owned by my father, myself, and my wife.

And we have taken it with marketing on this agency, being the number one driver from a million dollars on a small little Island to $50 million internationally. And we’ve done really well with it. It is a big story of ours.

So this is something that down the line for me is a big goal that I use as an agency, as this machine that can run brands through. And now, you’re not really just servicing people. You’re building something that is going to help you build wealth across the boards.

 

3 Ways How to Start Your Own Agency

Jason: Yeah, I look at…There’s kind of three pathways to creating an agency, right?

  1. You can create a lifestyle business where, you know, it just provides you amazing lifestyle. You can pick and choose and have your freedom.
  2. The other one is you can build it up to sell.
  3. And then the other one, as you described, you’re an incubator agency, right? Like that’s what Gary Vaynerchuk’s doing. That’s what you’re doing.

Where like with VaynerMedia, they don’t care about profit. They’re just caring about like, how do we create this amazing incubator that we can just bolt on to all these other businesses that we own and then flip those or turn right.

And just you know, cause it is hard to find a really good agency that can do all these things. And if you trust it, you know, that’s even the better. So I applaud you for that. That’s a really good pathway.

 

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