Running a small business is tough. With growing economic uncertainty, rising inflation, and an unpredictable market, it’s hard for small business owners to catch a break. Thankfully, artificial intelligence (AI) can help. These powerful tools can help companies streamline their operations, reduce costs, and enhance their bottom line. Getting started with AI, though, can be challenging for many businesses. That’s where an AI agency comes in. This article will answer the question, What Is an AI Agency? By the end, you’ll understand how to start a profitable AI agency with minimal technical overhead and scale it quickly by helping businesses adopt AI solutions efficiently.
An AI agency operates like a consultancy, helping businesses identify their unique challenges and implement AI tools to enhance their operations. AI Acquisition’s AI operating system is a valuable tool that helps aspiring agency owners achieve their objectives by simplifying the process of assisting businesses in adopting AI solutions.
An AI agency is a specialized service provider focused on developing, implementing, and optimizing artificial intelligence solutions for businesses. Unlike general digital agencies or IT consultancies that may offer AI as just one of many services, AI agencies bring deep expertise in specific AI disciplines and implementation approaches.
These agencies function as dedicated partners that bridge the gap between AI capabilities and practical business applications. They combine technical expertise with industry knowledge to translate AI potential into tangible business outcomes.
Many people start an AI agency to share their skills and knowledge of building AI agents for various use cases, and help develop tailored AI agents for specific business needs. These agencies can also help bring people's AI business ideas to life.
These agencies specialize in implementing AI solutions using visual interfaces and pre-built components through platforms like Voiceflow, Bubble, and Zapier. They excel at:
These agencies specialize in custom AI development, requiring specialized coding expertise. They typically handle:
The defining characteristics of both types of AI agencies include:
According to the McKinsey Global Institute, AI could automate about half of today's jobs by 2055. By 2025, AI and automation could replace 85 million jobs but create 97 million new ones, reshaping the job market and boosting productivity. In those 97 million roles, you have a role reserved for you.
By starting your AI agency, you secure your place in the AI age and set yourself as a business automation provider. The best and only way with AI is through it.
AI agencies offer a diverse range of services designed to help businesses at every stage of their AI journey:
AI agencies begin by helping organizations identify where and how AI can create the most value. This involves analyzing business challenges, data assets, and organizational readiness to develop a strategic roadmap for AI implementation.
The core offering of most AI agencies is the development and implementation of AI solutions. These range from accessible implementations to more advanced applications:
Implementing AI solutions requires careful integration with existing systems, with varying levels of complexity:
Many AI agencies offer continued partnership through:
When pursuing AI initiatives, organizations often face the decision between partnering with an external AI agency or building their internal capabilities. While both approaches have merit, AI agencies offer several distinct advantages that make them the preferred choice for many forward-thinking businesses.
AI agencies provide instant access to teams of specialists with deep experience across multiple AI disciplines and implementation approaches. This concentrated expertise would take years and significant investment to develop internally.
Speed is a critical competitive advantage in today's business environment. AI agencies can implement solutions in a fraction of the time required to build internal capabilities:
Building an internal AI team requires substantial investment in recruitment, salaries, benefits, training, and infrastructure. AI agencies offer more flexible engagement models that typically provide:
Implementing AI can be complex and fraught with potential pitfalls. Agencies that have successfully delivered numerous AI projects bring:
While internal teams are immersed in your specific business context, AI agencies bring valuable outside perspective:
AI initiatives often require different skills at different stages. Agencies provide:
While building in-house capabilities may make sense for organizations with highly specific long-term AI strategies or proprietary processes, most businesses find that partnering with specialized AI agencies provides the fastest and most effective path to realizing AI's transformative potential.
According to the McKinsey Global Institute, AI could automate about half of today's jobs by 2055. By 2025, AI and automation could replace 85 million jobs but create 97 million new ones, reshaping the job market and boosting productivity. In those 97 million roles, you have a role reserved for you.
By starting your AI agency, you secure your place in the AI age and set yourself as a business automation provider. The best and only way with AI is through it.
The business model of an AI agency revolves around providing tailored artificial intelligence solutions to clients in exchange for revenue generated through various streams. These agencies serve as strategic partners for businesses, providing AI-powered tools, consulting services, and customized implementations.
Let’s explore the key revenue streams of different AI agencies:
The most common revenue model for AI agencies involves discrete, project-based engagements. These typically include:
Mid-sized AI project fees usually range from $50,000 to $500,000, depending on scope and complexity. Payment structures often follow a milestone-based approach, with 30-40% of the total payment due upfront.
Subscription-based models offer clients ongoing access to AI services and solutions through regular monthly or annual payments. This model provides the agency with predictable revenue while offering clients flexible access to AI capabilities.
For example, a marketing agency might provide a subscription to their AI-driven campaign analytics tool, where businesses pay monthly or annually.
Many AI agencies develop proprietary AI-powered software solutions that they offer through a SaaS model. This approach combines traditional software licensing with AI capabilities, creating recurring revenue streams. SaaS offerings typically include:
Pricing for SaaS solutions usually follows a tiered structure based on usage metrics such as API calls, processing power, or user numbers.
AI consulting services represent a significant revenue stream, with agencies providing strategic guidance and expertise. Consulting fees are typically structured as:
Consulting services often include AI readiness assessments, digital transformation planning, technology stack recommendations, and ROI analysis.
Performance-based models tie agency compensation directly to client outcomes, creating alignment between agency success and client results. This model includes:
Most successful AI agencies combine multiple revenue models to create a balanced and sustainable business approach. For instance, an agency might:
This hybrid approach provides stability through recurring revenue while maintaining upside potential through performance-based components.
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When starting your AI automation agency, you have three main approaches. Select the option that aligns with your goals and available resources.
Building from scratch means developing your AI solutions in-house. This gives you full control over your AI agency business model and customization. Nevertheless, it requires significant time, investment, and expertise.
White labeling involves partnering with a provider to offer ready-made AI products under your brand. This method is faster and more cost-effective, making it ideal for AI automation agencies that focus on marketing rather than development.
The reseller model lets you sell AI solutions developed by others. It’s a low-investment option, appealing to new AI automation agencies. Nevertheless, you’ll rely on third-party quality and may face lower profit margins.
Select the most suitable method for your AI automation agency’s capabilities and objectives. Each approach can lead to a successful AI agency business model.
Starting your own AI agency can be an exciting and profitable venture. By following these steps, you can establish a successful AI automation agency that meets the growing demand for AI solutions.
The first step is determining the specific area your agency will specialize in. In other words, will you focus on AI implementation in sales, marketing, staffing, lead generation, general consulting, or another area of business activity? The more specialized you choose to structure your AI agency, the easier it will be to launch your operations and find clients in the early stages.
A business seeking to transform its marketing operations with AI will likely opt for AI marketing agencies over all-in-one AI agencies that also conduct marketing activities. There’s no ‘better’ option here since each niche has its unique demands and opportunities, but it’s undoubtedly better to go for the niche in which you have the most experience, passion, and network.
This goes without saying, but you have to be an absolute expert in the niche you choose to revolve your AI agency around. AI is a highly complicated area of technology, so clients will expect you to bridge the gap for their business entirely.
Before launching your business, ensure you invest sufficient time in mastering AI technologies, industry-specific AI tools, and proven AI strategies relevant to your niche. Ideally, you will do a few free test runs to ‘learn on the job’ before presenting your agency to paid clients.
This point returns to our initial discussion—how will you structure your AI agency services? Will you consult, develop customized AI solutions, integrate into workflows, or act as an outsourced team of AI experts? Whatever it is, it’s crucial to be crystal clear about your exact business model so clients know exactly what they can expect working with your agency.
A well-defined business plan sets the foundation for sustainable growth, so ensure your pricing structures and service offerings are well-established. Consider creating diverse and scalable pricing packages that cater to both small startups and enterprise clients, providing you with flexibility.
No less important than the business model itself is the team that you build to execute your AI services. You’ll most probably need professionals with expertise in AI and data science, as well as the specific niche you choose to cater to. The beauty of agencies is that you can start operating with a small team of motivated professionals.
Once you’ve understood the individual and collaborative manpower required to take on one client, you can simply copy-paste the team structure when it’s time to scale for more clients.
The technology you use will be the backbone of your agency, so make sure you do extensive research into the various AI software available in the market. For example, you may turn to platforms like Tableau or Power BI for data processing and visualization, and an AI coding platform like Cursor to build customized software.
If you choose to run your AI agency in an outsourced team model, it will be equally essential to gear up with the right industry-related AI tools. For instance, if you’re building a sales AI agency, you’ll probably leverage AI SDRs like Jason AI to automate your clients’ sales operations. Your agency will still need human expert oversight, no doubt.
Still, the principal value of such AI SDRs is that your agency could take on significantly more clients with the same manpower, without compromising on the quality of operations.
This goes without saying. How else will you get your AI agency visible to your potential clients? The tech business world has become entirely digital, so remember to invest sufficient time and resources in developing a professional and optimized website that ideally showcases your services, case studies, and testimonials to establish brand credibility.
Leverage SEO strategies to rank for niche-related keywords, social media to connect with your audience, and double-down on AI content to showcase your expertise, be it valuable blog articles, daily TikTok/Instagram videos, and so on. Just like any other business, running strategic, targeted ads never hurts in gaining traction.
Collaborating with complementary businesses can significantly boost your AI agency in the early stages, helping expand brand awareness and grow your potential client base. A strategic approach that many AI agencies adopt in their early stages is partnering with other, non-competing agencies that share similar target audiences but offer different services.
So if you’re an outsourced marketing AI team and you’ve attracted a client who’s looking for customized AI marketing software, you could refer them to one of your partners that specializes in this direction, and they will do the same for you in return when the opportunity arises.
When attracting your first clients, heavy discounts and pilot programs are your best bet. You may be better than the competition, but brand credibility and trust matter in modern business activities. Think of these initial projects as the best reputation-building and client-attracting tools for the future, showcasing the impact your AI agency can produce.
Building on the previous point, your first projects are crucial for establishing a solid foundation. Don’t just complete the work—aim to exceed expectations with exceptional results. Additionally, focus on building long-term client relationships from the outset, as AI agencies often work on contracts ranging from 3 to 12 months.
Additionally, satisfied clients may refer you to others, so try to incorporate feedback loops wherever possible to improve your services continually.
It’s no secret that AI is a rapidly evolving field, which is why it’s not enough to become an expert in your niche, launch your AI agency, and operate in a ‘fixed’ manner. It’s crucial to stay consistently informed about the latest AI advancements, technology, and industry trends to provide your clients with the most innovative and competitive solutions.
Rather than chasing the shifting trends, why not position your agency as a thought leader in the AI space by collaborating with industry experts, publishing unique insights, hosting forward-thinking webinars, or participating in conferences?
Competing with numerous AI automation agencies requires strong differentiation and unique offerings.
Example: Cloudera, a big data company, faced stiff competition in AI. To stand out, they focused on data privacy and governance, which helped them secure major clients like banks and government agencies.
Rapid technological advancements in AI necessitate ongoing learning and adaptation.
For example, the AI research lab OpenAI constantly adapts to new developments, staying ahead by continuously investing in research and development to maintain its edge in AI advancements.
Managing high client expectations requires clear communication and realistic goal-setting.
Example: IBM Watson faced challenges when clients expected AI to perform flawlessly from the start. IBM had to work closely with clients to adjust expectations and demonstrate realistic capabilities.
Resource Management efficiently balancing time, money, and talent is crucial for sustainable growth.
Example: The AI startup Element AI struggled with resource management, resulting in difficulties scaling. They had to focus on better resource allocation and eventually sold part of their business to ServiceNow.
Navigating the complex legal and ethical landscape of AI is essential for long-term success.
For instance, Clearview AI, a facial recognition company, faced significant legal challenges due to privacy concerns. They had to navigate a complex web of regulations and public backlash, underscoring the importance of understanding legal risks in AI.
An AI agency is a business that utilizes artificial intelligence to assist other companies in enhancing their operations, marketing, sales, and customer service. Just like a traditional marketing agency, an AI agency can help clients identify their pain points and develop strategies to achieve their goals with AI.
The difference is that AI agencies almost exclusively utilize AI tools to achieve this, which enables them to deliver results faster and more efficiently than ever before. The rise of AI has made it possible for anyone to start an AI agency, even if they lack technical skills or experience.
By leveraging existing AI tools, you can help businesses improve their operations through automation, boost their marketing efforts with AI, and even use AI to enhance your own agency’s performance. With the help of AI, you can get your agency up and running quickly, deliver valuable services to clients, and uncover new opportunities for growth as you scale.
Get the exact playbook we used to build our own AI-powered agency. Inside, you'll discover the strategies, tools, and workflows that helped us systemize growth.
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