Starting your first digital business? Follow this or risk falling behind.
Dav Nash
14 min read
It’s a tricky venture, but the hardest part is learning where to begin. Lucky for you, I’m here to lend a big helping hand!
I’ve written this guide to help you launch your first digital business and get it off the ground. It’ll run through all the most important steps in this process, so you’ve got a framework to follow.
Be warned: this isn’t something you can do overnight.
It’ll take months of careful planning, but it will help you establish your digital business and start drawing in your first clients. This guide is also a chunky one!
I know this is an obvious place to start, but you need to define your business idea before you look at how to start a digital business.
What type of digital business are you starting?
You’re on my website, so the assumption is that you’re interested in digital marketing or advertising. Perhaps you’re creating a digital performance marketing agency, setting up a digital SEO business, or building a digital advertising agency.
All of these business ideas revolve around similar concepts, but they’re different.
Find your calling – most of you should have a basic understanding of what you want to do or what digital path to go down.
There’s no need to go too in-depth at this stage. All you need is to have an idea and prove that it can work. Think about the services you’ll offer and who you’ll offer them to. This helps you establish a target market and see how you’ll fill any demands.
According to the brainboxes over at Harvard Business School, there are eight types of business models to explore – but only three, maybe four, are relevant here:
In my eyes, the best business models for a digital agency will be either Service or Subscription.
Service is the traditional approach; you create and sell different digital services to clients. In your case, this could mean you’re selling digital marketing or advertising services. Clients pay a fee for a specific service, and you deliver it.
This also bleeds into the Subscription business model.
Instead of selling your services for a flat fee, you can offer subscriptions that give clients access to a range of services. They pay an annual subscription and get your constant assistance with all aspects of their digital marketing campaign.
And that’s kind of where the Product business model becomes relevant.
While you might not design and build a conventional product, you could create an online product to sell. Maybe you’ve created a specific digital marketing tool for prospective clients to use. They either pay upfront or use a subscription to access this tool. It’s far more common than you think – look at digital businesses like Ahrefs and Semrush, for example.
What about a Reselling business model?
Some digital marketing agencies take this approach by paying other companies for their services and selling them to others. If you do this, you become a White Label Reseller. You still set up your business, but the services you offer are provided by someone else.
Overall, you need to work out which business model makes the most sense when figuring out how to start a digital business.
There isn’t a right or wrong answer – it can vary from business to business. My advice is to look at your services and target market, then consider the best way to maximise profits.
I think this is the most crucial step in starting a digital business. Without knowing your target audience, you have no hope of achieving anything.
The best analogy is that it’s like going to the casino. You spend a fortune trying to make money, but you’re probably going to waste it all. You don’t really know what you’re doing – and if you happen to hit the jackpot, then it’s pure luck.
Defining and understanding your target audience is like visiting a casino with special goggles that let you see where every roulette spin will land. Luck is removed from the equation, and you’ll see success without wasting as much money.
You must understand who your business is for and why this audience is likely to want your services. From here, your entire marketing/advertising philosophy is built around targeting this audience.
With that in mind, let’s lock in and see how to find your target audience.
Look at your services and consider what problems they solve.
Ask yourself what pain points your solution addresses. Put yourself in your prospective client’s shoes and think about why you’d engage with your business.
This instantly helps you pick out a specific demographic or market to zoom in on. For example, a digital marketing/advertising agency will only care about clients with businesses to promote.
Then, go a bit deeper and think about certain niche markets you might want to dip into. Are you providing your digital services to the wider market, or do you want only to serve one industry?
Look at your biggest competitors and see who they target.
This whole process requires a lot of market analysis, but you want to nail down your target audience and learn more about who they are, how they act and the biggest challenges you can solve.
One good thing to remember is that your target audience is a more specific version of your target market.
Yes, there’s a difference between the two!
Your target market is the broad market your services are for – your target audience is what we’ve been talking about above. It’s the defined group of people or businesses and their key characteristics. Learning about them will help you foster better marketing campaigns that appeal to their interests.
By this stage, you’ve established a business idea, found your best business model, and defined both your target audience and market.
You’re laying some great foundations; now you need to start setting things up.
A digital business needs an online presence. It’s the backbone of everything you do. Your target market will find businesses like yours by searching for them online. If you’re not showing up in search results, they’ll never find you!
First thing first, build a website.
This immediately raises a question: Should you build it yourself or hire a web designer?
Honestly, it’s a lot harder to decide than you think. There’s a lovely blog post by Design Powers that explores this topic and brings up plenty of pros/cons for both approaches. The gist is that DIY websites are way more affordable, though possibly less flexible and less professional. Hiring a web designer gives you complete flexibility and normally results in a better website – though it can cost thousands.
Depending on your budget, it could be better to start with a DIY site and then revamp it at a later date.
Either way, your website serves as the focal point for your online presence. The next step is making it SEO-friendly so it has a better chance of showing up in searches. This involves working on keyword research to see which words/phrases to target and then figuring out how to implement them across your site.
It’s a tough ask, though link-building is one of the best ways to build a strong online presence.
Link-building is when you get loads of other sites to link back to yours. It tells Google (and other search engines) that your website is useful and trustworthy. I fully recommend looking for link-building services to try and generate as many high-quality backlinks as possible.
I’d also suggest you invest in digital advertising. Ads help people notice your business and establish an online presence. With an SEO-friendly website and some great digital ads, you’ve set up a great starting point and can move to the next stage.
As I said, setting up a website is the first step in building your online presence.
The next challenge is trying to attract your target audience to your website.
At the same time, you want to build a strong digital brand and become a company people trust. Luckily, the two goals go hand-in-hand and complement one another.
For instance, you can start creating great digital content that draws in your target audience. All the while, this content establishes your knowledge and builds authority, which helps your brand stand out as a trustworthy resource.
You’ll need to grind a lot to attract your audience and lure them away from your competitors.
I won’t talk too much about the different marketing or advertising ideas you can use here. Seeing as you want to know how to start a digital business, I’m assuming you already know the ins and outs of digital marketing!
Instead, the biggest point I want to drive home is that of your target audience.
Remember who they are!! Think about where they’re likely to be in the online world and how they’re going to find you. If you offer digital advertising services to finance businesses, you’re not going to reel them in by blowing your budget on TikTok marketing campaigns.
Identify the key avenues for attracting your target audience, and you’ll save a fortune on unsuccessful marketing ploys.
It feels like you’re almost ready to launch your business – but two more things need to happen first.
You must think about where you’ll get the money to fund your business. If you’re lucky – or a secret millionaire – your entire operation can be self-funded.
For the rest of us chumps, starting a digital business means looking at different finance options. I’ll talk about those in the next section; there’s one thing to do before then.
This plan explains the ins and outs of your business. It tells readers about your business idea, the goals/objectives you set and how you’ll make money. I’ve looked at various resources from HSBC to the Bank of America, and most agree that business plans need to cover these elements:
Building a business plan makes your digital company seem more real. All of your ideas and thoughts are written in a big document for someone else to read over. Don’t take this step lightly; bad business plans will make it impossible to source funding.
Also, I like using business plans to pitch services to prospects.
If prospective clients see your business plan, it gives them more confidence. Think of it as another way to build trust!
How do you start a digital business without any money?
You can’t.
Sorry, but it’s impossible – you need money from somewhere, but it doesn’t have to be your own bank account.
You could try to audition for Dragon’s Den, though I don’t think you’ll be that successful. Instead, you should explore these finance options:
A business loan is the most obvious way to secure funding for your digital marketing business.
Take your business plan to a business lender and ask for money to fund your startup. Most lenders will be banks or business societies, and Money has a brilliant list of business loan deals to look at.
The benefits of a business loan are simple: you get money and can use it to build and grow your business. The lender doesn’t own part of your business; it’s still 100% yours.
As you can expect, the downsides are that you may be limited by how much you can borrow, and you’ll have to repay the loan with interest.
Regardless, I think this is the best approach for 99% of you – and the one you’re likely to see success from.
An angel investor is basically one of the Dragons.
They’ll pump money into your business in return for some benefits. What could they possibly want? A share in your company. They want to pocket a percentage of your profits in exchange for giving you money.
It’s a decent deal as you don’t have to repay any of the money they lend you. However, it can feel like you’re a puppet on a string. Investors can cut funding whenever they want, so they often dictate how your business should be run.
If you do go down this route, make sure you agree to good terms with the investor(s). Get the proper legal contracts written up to limit their say in business operations so they can’t force you to do x or y.
I lied.
Business loans aren’t the best funding option; crowdfunding is.
Crowdfunding is kind of like receiving loads of donations from different people. It’s a popular way to raise funds for startups, yet it might be difficult to get all the money you need. You have to demonstrate that your business is worth funding – which may be hard for a digital agency.
Still, if you can raise money, then it’s worth it. Crowdfunding doesn’t have many downsides, as people do it because they want to help out. You may have to give away perks – like free gifts or a lifetime discount on your services – but it’s better than repaying a loan or handing a share of your profits to an investor.
Explore as many finance options as you can before weighing up which one to go for. You can always use a combination of ideas; fund your digital startup with some of your own cash, plus a small loan.
Finally, it’s time to launch your digital business.
This is the moment you’ve been waiting for but be prepared for it to be underwhelming.
You’re creating a digital business, so there won’t be a big fanfare with people queuing outside your doors ready to come in. What tends to happen is you click a button to make your website go live.
That’s it.
Well…that’s not it. You should’ve been working on your online presence and doing some initial marketing in the build-up to your launch. You need to create hype around your business and ensure the right people are aware of its opening.
The moment it opens, you can start publishing content and sending out digital ads.
If you want my advice, I suggest making a temporary staging page for your website in the weeks before it launches. This page can connect to your online ads and draw people in. They land on it and see that you’re opening soon – perhaps you could include a special offer for people to claim if they fill in a form on this staging page.
Then, when you officially launch, you already have a few leads to send emails to. Provide their special discounts and encourage them to give you a call or visit your site to book a consultation.
After this, you should track your early performance as a digital business.
Look at KPIs like the number of customers acquired, the cost-per-acquisition, and so on. Web traffic is another great metric – it tells you if your marketing campaigns are working and driving people to your site.
Track absolutely everything.
Then analyse.
Look at where you’re doing well and where things aren’t so shiny. Work on solutions to improve the areas you’re lacking – this should be done throughout your time as a business. It’s the best way to grow and continue landing customers.
I sincerely hope you found this guide helpful in learning how to start a digital business. If you want more personal advice and guidance, then I offer Mentorship and Consulting to help digital agencies grow from the ground up.
Click the link to learn more and request a free introductory call!
