Thinking of starting a digital marketing agency — what was your realistic first-year experience?

We wrapped up our first year at the end of 2023. Our total invoiced revenue was 1,400,000 TL, but net profit left in the bank was only 180,000 TL. About half the expenses went to salaries and SGK contributions. Our most painful lesson was 110,000 TL in bad debt we couldn't collect; two clients we delivered work for and never got paid by wiped out our entire margin.

definitely dont make the mistake of renting an office. like we used a virtual office the first year, held meetings at coffee shops or client offices. built a network of project-based freelancers instead of hiring staff. if u dont keep cash flow tight from day one running an agency can turn into a nightmare real quick.

note: I wrote this based on my own experience, it might not apply to everyone.

Stick with a sole proprietorship for now instead of rushing to register a limited company and put staff on payroll. Bring in the designer and copywriter as hourly or project-based freelancers. The moment you see you can double your revenue without taking on fixed overhead, that's your cue to switch to a limited company.

I don't get why someone making 45.000 TL freelancing would immediately hire two employees and risk 300.000 TL in savings. The total cost of two employees to an employer is at least 70-80k TL a month. Is your current portfolio really large enough to consistently cover these salaries and taxes?

edit: typed from phone, sorry for typos.

i hung up my sign with the exact same excitement thinking corporate clients would be lining up at my door the next day. doesnt work like that unfortunately... the minute you tell your freelance clients "were an agency now our rates went up," half of them walk... so make sure you have a transition plan that doesnt cost you your current clients.

edit: fixed a few typos.

Three rules for surviving the first year: 1) Never launch a single ad campaign without a contract and a deposit. 2) Set payment terms to a maximum of 15 days in the contract and include a late payment interest clause. 3) Don't zero out your own agency's marketing budget; don't forget to advertise yourself while running ads for clients.

Across how many different clients are you making that current 45.000 TL revenue? If you're reliant on just 2-3 big clients, how will you cover payroll if one of them leaves? Have you calculated your customer acquisition cost and how many weeks your sales cycle takes?

correct.

My question might sound amateurish, sorry about that. Just because everyone does it doesn't mean it's right.

Hasty decisions become decisions you have to fix six months later. Good luck with that.

You're right, I've been down that road too. When making decisions, write down the worst-case scenario too, not just the best.

If you have questions, write them; I'll answer as best I can.

I feel the same way. Just because everyone does it doesnt mean its right.

This is my opinion I'm not claiming it's absolute truth.

There's one point I'm curious about. Solutions that work at a small scale collapse when you grow; I learned this late.

Of course, it varies if your situation is different.

I'll try it.

I went through the same thing two years ago. Start with a small trial; don't commit to everything at once.

Good luck with that.

let me summarize the topic since several different answers were given but everyone rushing into starting a digital marketing agency gets stuck at the same point.

don't hesitate to ask; those who don't ask always pay more but i mean correct me if I'm wrong.

To get into the details: The real issue isn't the number, but what it's based on.

If you post the result here, it will help others too.

thanks for writing this, that's the right way. btw just because everyone does it doesn't mean it's right.

the moment you depend on a single client, you no longer set the price. honestly i'm also curious if anyone does it differently.

It's rare to find an explanation this clear. Processes without records never improve, because you don't know what to fix.

If you don't write this down from the start, it leads to arguments later. If I were you, I'd go this route.