From Zero to $100k MRR: The Blueprint for Bootstrapping a Design Agency
November 18, 2023
Starting Out: Why Bootstrap a Design Agency?
- Bootstrapping suits design agencies.
- Benefits include low upfront costs and flexibility.
- Control over finances and potential for reinvestment.
Bootstrapping Techniques
- Identify and target a niche.
- Start with a Minimum Viable Product (MVP).
- Build your skills and watch your costs.
Building a Profitable Design Agency Business Plan
- Research your market and competition.
- Define your unique value proposition.
- Plan marketing, budget, and forecast.
Refining Your Design Agency Business Model
- Be ready to adapt and refine.
- Update your business plan as needed.
Design Agency Growth Strategies
- Focus on profitability.
- Expand capacity efficiently.
- Prioritize customer acquisition and reinvestment.
Achieving $100k MRR
- It's a journey, not a one-article solution.
- Explore additional sources for in-depth guidance.
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Starting Out
Bootstrapping a design agency is no mean feat. It’s going alone, funding your business without investors or debt. But perhaps that’s the exciting part? You get to make all the decisions, even when you grow and hire.
Some of today’s biggest brands and technology platforms, all unicorns, were initially bootstrapped; they include GoPro, Shopify, and GitHub. We’ll talk about these and inspirational solopreneurs like Brett Williams from Design Joy later. First, this article outlines a blueprint for bootstrapping a design agency.
Why Bootstrap a Design Agency?
The design business lends itself to a bootstrapping blueprint because bootstrapping works well in certain industries. The model is perfect for a design agency because such a company needs little upfront capital investment, offers quick returns, and allows for flexible work around existing commitments if required.
Why is Bootstrapping a Blueprint for Agency Success?
- You have, or will learn, the skills needed to deliver
- Work from home, part-time, or go all in. The choice is yours
- Learn to control your finances closely
- Reinvest your earnings
- Grow when you are ready
- Use contractors, at least initially, to cope with demand
- Everyone loves a solopreneur
- Retain greater ownership if you take funding later
This last point on our list is important. Bootstrapping a business is hard work; it could involve working around the clock or running your business alongside a day job. That said, the rewards later can be magnified. Suppose you’ve already built a robust business model with healthy revenue. In that case, you are more likely to be able to take a stronger standpoint in negotiations if you seek funding later to expand.
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Bootstrapping Techniques
Identify Your Niche or Niche it Down
One route to providing profitable design services is to identify and target your niche, or in the words of Colin Keeley, “niche it down.” Keeley builds and buys SaaS companies and uses the example of ConvertKit, which created a marketing platform focused on bloggers instead of competing in the entire market with MailChimp. This entrepreneur suggests your website and positioning statement should immediately reflect your niche:
“Nail your website headline (H1) to set yourself apart.
In 3 seconds, a prospect should know whether they are a fit for you or not.
Otherwise, it is an uphill battle against all the other players in your space.”
Build a Minimum Viable Product (MVP)
Perhaps, like Brett Williams, your niche is creating a unique product or service model through a subscription model, or an app, or a platform. For a bootstrapped business, starting small with a minimal viable product (MVP) allows you to conserve resources and test your market. An MVP should focus on essential features that solve problems for your target customers. As you grow, so too can your product. By launching an MVP, you can confirm market interest, learn more about your customers and their needs, and get to generating revenue while you're still building.
https://twitter.com/BrettFromDJ/status/1708904679625589023
Build Your Skills
Unicorn Platform founder Alexander Isora, who we’ll also discuss below, is an example of a solopreneur who built his design and development skills as he and his business grew. Instead of hiring experts with the skills he needed, he simply learned them to deliver his business promise.
Watch Your Costs
Part of a bootstrapping approach is close cost management. It’s a technique that will stand you in good stead later as you grow to ensure your profit margins and yearly profits aren’t eaten into by high overheads.
When you’re self-funded and starting out, it is wise to hold back on adding any overheads you don’t need.
- Work from home to remove the costs of an office and commute
- Build your skills to save from hiring additional expertise
- Perform all roles (admin, marketing, sales) so there's one salary to cover
- Keep your salary low, at least initially, to help you grow
- Calculate expenses, earnings, profits, and taxes monthly to keep grounded
- Stay on top of client invoicing to reduce creditors
- Save on non-essentials so there is more to invest in growth
Sources to Check Out:
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Building a Profitable Design Agency Business Plan
A Bootstrapped Business Stills Need a Plan
As an entrepreneur or solopreneur, you might be tempted to skip creating a business plan and dive straight into building your business. It’s important to remember that business plans aren’t just for banks and investors. They are a collation of your research, a presentation of your product and service, a summary of your vision, an outline of your marketing strategy, and a financial structure, all of which are just as useful to keep you on track. To create a design agency business plan:
- Thoroughly research your market
- Then, just as thoroughly research your competition
- Define your unique value proposition (UVP) or your MVP
- Set goals and objectives
- Go deep with a market analysis
- Decide your pricing
- Plan your marketing strategy and branding
- Budget and forecast
Refining Your Design Agency Business Model
An important note here: as you launch and grow, you’ll understand more about the niche you have selected or understand more about what your clients really need. The trick to success? Iteration. You may have a model, a plan, but if it’s not working, you’ll need to adapt or refine it so that it does. As a bootstrapped design agency, the freedom is yours to make any necessary changes. Don’t forget to update your business plan to keep you focused on your agency's micro and macro side.
Sources to Check Out:
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Design Agency Growth Strategies
Scaling a Design Business
One way bootstrapped design businesses can scale is to focus on profitability rather than fast growth or quality over quantity. It makes sense to focus on easier markets and make money before going after challenging markets where being more established makes you strong.
To expand capacity, there’s a choice between becoming more efficient and automating some workflows to free your own time or learning new profitable skills and design techniques. Then, there’s hiring or contracting out work. One avenue to consider is hiring skillsets that are more diverse or more specialized than your own. What you do will depend on your market.
Design an Effective Sales Process & Prioritize Customer Acquisition
As a designer and an entrepreneur, sales and marketing might not be your leading talent, and this is why you’ll need to invest time into developing your skills and planning a sales process.
Prioritizing customer acquisition is vital. Brett Williams overcame the need to constantly acquire new clients with his subscription model. Unless you, too, have a unique alternative, you’ll need to balance your creative tasks with time on sales and marketing.
Reinvest for Growth
A bootstrapped business should have relatively low overheads, making it possible, once revenue starts flowing in, to reinvest that revenue for growth. Alexander Isora and Brett Williams keep their overheads down, and their own skills cutting-edge
Reinvesting for growth for you might look like increasing your marketing budget, hiring, extending your tech stack, innovating your MVP or creating a new one, or breaking into new markets.
Sources to Check Out:
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Bootstrapping Success Stores
Now, let’s take a look at some inspiring stories from other entrepreneurs and some lessons learned from successful bootstrapped design agencies.
https://twitter.com/BrettFromDJ/status/1679501620550434816
How Brett Williams from Design Joy Makes $1.2 Million a Year
Brett Williams is a shining example of independent design firm growth. In fact, he fervently shares his experience of building from zero to $100k MRR and has developed a course to help other founders. The growth you see in the chart in his tweet was all achieved whilst he was working full-time in another job.
Williams embraced solopreneurship and leveraged his design skills, creating a unique concept with a subscription design service that provided a steady income stream. He eliminated the need to constantly hunt for new projects and focused on serving his existing clients, limiting the number of new clients he takes on to provide quality over quantity. He encourages other designers to change their mindsets and see themselves as problem solvers, and he leverages automation to allow him to focus on the creative side of the business.
https://twitter.com/BrettFromDJ/status/1701974538416799788
Lessons from Other Bootstrapped Businesses
GitHub
Founded by Tom Preston-Werner, GitHub is a bootstrapped business turned unicorn. This entrepreneur reportedly only spent a few thousand dollars bootstrapping GitHub, launching with an immediate subscription model.
Louder Online
Aaron Agius also bootstrapped his marketing agency, now an award-winning global agency. He finds the freedom unparalleled and says bootstrapping makes you focus on your competitive advantages so you can turn them into revenue. His advice:
“Hustle. Iterate. Stay lean until you can afford to go big. In the end, you’ll likely be glad you bootstrapped your way to success.”
Unicorn Platform
Alexander Isora created Unicorn Platform, a landing page and blog builder for SaaS, which he’s taken from zero to $10k MRR on his own. He created an MVP in two months on a limited budget and gained positive feedback and revenue immediately. He has no aspirations to be the next SquareSpace or TechCrunch; he loves his product and wants to keep improving it. His advice is:
“A startup is a complex and unpredictable thing. It can evolve in many different ways.
VC is not mandatory. Raising funds is not mandatory. The team is not mandatory. An office is not mandatory. Hockey-stick is not mandatory.
Let your success story be written by you, not by the media.”
Sources to Check Out:
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Achieving $100k MRR
Let’s be honest: this one article isn’t going to take you from zero to $100k monthly recurring revenue. We’ve included many sources for you to dig down into how other design agencies and startups bootstrapped their success. Maybe, however, it will inspire you to start or reinvigorate bootstrapping your design agency journey or to get in touch to find out how we can help.
https://lloydandhodge.com/how-to-bootstrap-a-digital-marketing-agency/
https://www.pitchago.com/blog/now-is-the-perfect-time-to-bootstrap-your-tech-startup
https://www.productizeyourself.co/
https://www.digitalocean.com/resources/article/how-to-successfully-bootstrap-your-startup
