How to Choose an Agency for Your Small Business

Define the job before you talk to anyone

Write down the outcome you want, the budget, the timeline and how you will measure success. Agencies can only be judged against a clear goal.

Vague goals such as 'more visibility' lead to vague results. Prefer targets you can count: leads per month, cost per lead, booked appointments, online sales.

Also decide the scope. Do you need strategy, execution, or both? Is this a one-time project or an ongoing retainer? Your marketing plan and marketing budget should come first.

Decide between an agency, a freelancer and in-house help

Agencies bring a team and process at a higher price. Freelancers are flexible and cheaper. In-house hires give control but add fixed cost.

• Agency: several skills under one roof, account management, usually minimum monthly fees.
• Freelancer: good for a single skill such as copywriting or design. See how to hire freelancers.
• In-house: best when marketing is a daily, central function.

A small business often starts with a freelancer or a small agency and grows from there.

Build a shortlist and vet it

Look for experience with businesses like yours, work you can verify and references you can call.

Ask for case studies and then confirm them. Call two references and ask what went well and what did not. Review the agency's own website and marketing. If they cannot market themselves well, be cautious.

Check that the person who sells you is the person who will do the work, or at least meet the team that will.

Questions to ask in the interview

Ask how they measure results, who works on your account, what they need from you and how they report.

1. What results have you produced for similar businesses, and how were they measured?
2. Who will work on my account day to day?
3. What is included in the fee, and what costs extra, such as ad spend or tools?
4. How often will we meet and what will reports show?
5. Who owns the accounts, creative files and data when we finish?
6. What is the process if results fall short?

Be wary of anyone who promises specific rankings or sales figures. Nobody controls search engines or buyers.

Compare pricing structures

Agencies charge by retainer, project, hourly rate or percentage of ad spend. Make sure you understand what you get for the money.

A retainer gives steady work for a monthly fee. A project fee suits a defined deliverable like a website. Percentage-of-spend deals can create a conflict, since the agency earns more when you spend more.

Compare proposals on the same scope. Ask for a written statement of work with deliverables and dates.

Red flags when evaluating an agency

Be careful with guarantees, vague reporting, pressure to sign quickly and agencies that will not let you own your accounts.

• Guaranteed rankings, leads or sales.
• No named team members or case studies you can verify.
• Reports full of impressions and clicks but no leads or revenue.
• Long auto-renewing contracts with no exit.
• Ad accounts, domains or analytics held in the agency's name.

A good agency is comfortable being measured. If it resists clear targets, move on.

Start small and protect yourself in the contract

Begin with a short pilot, keep contract terms flexible and make sure you own your accounts, content and data.

Try a three-month engagement before committing to a year. Include a termination clause, ownership of all creative and ad accounts in your name, and monthly reporting requirements.

Then judge the agency on payback. In this illustrative example, if you spend $6,000 a month and it produces $18,000 of profit, the relationship pays. If you need cash to fund a campaign ahead of results, working capital can help, and our marketing payback math shows how to test the numbers first. ROI Funder considers 500+ FICO, 6+ months in business and $20,000+ monthly revenue.