How to Start a Creative Agency And Lead it to Success
A creative agency can assist businesses in deciding on a public branding approach. Creative agencies provide a company with a distinctive and consistent voice that appeals to their target demographic, from logos to slogans to blog material.
A creative agency will serve as the public face of a firm's beliefs and mission, whereas an advertising service tries to disseminate the name of a brand by purchasing media space.
By giving their clients a competitive edge in competitive industries, creative firms help to boost the local economy and promote small companies.
15 Quick Tips to Start a Creative Agency
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your creative agency.
These steps will ensure that your new business is well planned out, registered properly, and legally compliant.
Tip 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a creative agency?
The money you spend is heavily dependent on the image you want to portray to your clients. Technically, much of the work can be done with laptops, a few co-founders, and a coffee shop. However, clients will be looking to work with agencies that have a professional look and feel. When holding meetings with clients, it may be helpful to have a dedicated office space.
Should you decide on an office, you'll need a Certificate of Occupancy (CO). The price of this will vary based on where you open. The CO simply states that the office is safe for those inside and meets building standards, and can be obtained by the landlord owner should you choose to rent.
What are the ongoing expenses for a creative agency?
Owners should prepare for the following expenses:
- Rent/license renewals
- Office electronics/equipment
- Employee salaries
- Website costs
- New technology investments
- Networking expenses (e.g., client lunches, etc.)
Who is the target market?
The target market of a creative agency is any company that wants to improve its reputation, connect with customers, and boost sales. Generally (but not always), it’s small to medium businesses that hire creative agencies as they may not have the capital to hire full-time employees. Some creative agencies carve out a niche for themselves, such as only taking on food-related clients.
How does a creative agency make money?
Creative agencies may charge for their services with flat fees on a per-project basis. Creative agencies may also choose to charge by billable hours, where everyone involved in projects has their hourly rate. While fee-based projects may be more attractive to clients (because they’ll know immediately how their budget will be affected), billable hours eliminate the chances that the agency will underbid for a project.
How much can you charge customers?
It all depends on the scope of the project. Much of a creative agency’s billing is trial and error as companies determine just how much work it takes to finish a project. Creative agencies can charge as much as $5,000 a month.
How much profit can a creative agency make?
Because you’re not selling a product, you can keep the overhead low. With fifteen clients at an average of $2,000 a month, your agency could be pulling in as much as $25,000 a month (assuming equal profit share.)
How can you make your business more profitable?
Creative agencies can expand by offering advertising services or different marketing services. For example, instead of simply creating the content, creative agencies may want to do public outreach events on behalf of the company.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Creative Agency Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your name.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
Tip 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your creative agency is issued.
You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Tip 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business. To register for taxes you will need to apply for an EIN. It's really easy and free!
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
Tip 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and another financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Tip 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Tip 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a creative agency. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city, or county clerk’s office
- Get assistance from one of the local associations listed in the US Small Business Associations directory of local business resources.
Creative agencies should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize the risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your creative agency when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on-call attorneys to get complimentary legal advice.
Certificate of Occupancy
A creative agency is generally run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws, and government regulations have been met.
If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that applies to a creative agency.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your creative agency will be in compliance and able to obtain a CO.
Tip 7: Get business insurance
Just as with licenses and permits, your business needs insurance to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Tip 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a creative agency
Advertising an agency generally comes in the form of online ads or even physical flyers. If you’re aiming for businesses around town, then you’ll need to establish a local presence by networking at local events. For more national campaigns, you’ll need to invest time and money in SEO tactics to start getting your name out. Until you can generate word-of-mouth business, being seen in search engine searches will be your best way to spark interest.
How to keep customers coming back
Creative agencies should be aiming to give companies a unifying theme when it comes to their marketing techniques. Keep clients coming back by presenting a strategy that they can implement in every department. Aim to increase the client’s revenue by increasing public awareness of their brand amongst their target demographic.
Tip 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that make the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Other popular website builders are WordPress, Wix, Weebly, Squarespace, and Shopify.
Tip 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. You can read about our top picks in the Best Business VoIP Providers section of this article.
Phone systems make a small business feel larger and give it an air of legitimacy. Potential customers know that a company with a phone number is serious, but a company with only a Gmail or Skype account does not have its affairs in order.
When it comes to phone systems for small businesses, there is a wide range of price tags with a wide range of features. Since every business is different, you’ll need to do some research before selecting a VoIP system or comparing business telephone companies.
Tip11: Set up a dedicated email address for your business
Providing customers with an email address that is separate from your account helps to create a professional image and provides the opportunity to establish accountability by assigning responsibility for customer interactions to specific employees.
It also makes it possible for you and your employees to use different professional email addresses on networking sites like LinkedIn.
The exact steps involved in getting this process started will depend on how your business currently manages its communications; if all of your company’s emails are managed by one person, then adding a new address that forwards to their existing accounts might be as simple as changing the settings in an email client (i.e., Gmail) or phone system (i.e., Google Voice).
If not, or if you’d prefer to manage all of your business’ emails from a single account, then the new address will need to be set up as a “catch-all” address that forwards any message sent to it to an existing inbox.
Your new email can then be used on social media sites like LinkedIn or Twitter, and provide customers with the ability to contact you directly through portals that they already use.
To learn more about setting up a dedicated business email address check out our article called How to Set Up a Dedicated Email Address for Your Business.
Tip 12: Set up a professional voicemail box
You should also set up a dedicated phone number (i.e., VoIP) for your business that customers can use to contact you if they’re unable to reach you through email or social media - e.g.: after hours, on weekends, or during unexpected absences.
This is especially important if your business is service-oriented, relies on referrals for new clients, or has a high turnover of potential customers.
A professional voicemail will provide an excellent first impression to anyone who calls you and can help create stability within the minds of people searching for your business online.
It’s also critical to have this system in place before scheduling any presentations or events that require a call-back from potential customers.
Setting up a professional phone system is easy, but there are many different ways to go about it - e.g.: virtual numbers, VoIP services, long-distance plans. Another important consideration is choosing a number that makes sense for both your business and your target market.
For example, if you run a medical clinic then using a local area will help potential patients more easily remember how to reach you; if your business is a bakery, then using a generic toll-free number might be more effective because it allows customers from anywhere to place orders.
Tip 13: Set up a blog
Blogs are an excellent way to grow your business because they allow you to distribute content that is useful to current and potential customers, engage with them more directly through comments, and boost your search engine optimization (SEO) efforts.
Some of the most popular blogging platforms include WordPress, Blogger, Tumblr, and LiveJournal.
It’s best to use a dedicated hosting service for your blog, as this will allow you to more easily control the look and feel of your site.
In addition, it will make it easier for you to set up and share business tools like calendars, document sharing, group chat rooms, and photo albums - e.g.: for announcements, sales contests, news updates, and other special events.
You should also consider installing social media plug-ins on your blog so you can easily share posts with visitors who are registered members of the most popular social networking sites - e.g.: Facebook, Twitter, LinkedIn.
This will make it easier for people to find your business online, and it will help extend the reach of your blog by allowing people to share your content with their friends.
Tip 14: Use video blogs to build trust
Video blogging is becoming more popular every day because they are easier to create than written ones, can be shared immediately via social media, are highly engaging, and are excellent at building trust between brands and customers.
To create a video blog all you need is a webcam, microphone, or even just your mobile phone. You can then upload the finished videos to YouTube, Vimeo, BlipTV, or another hosting service that allows you to share your content more easily via social media sites like Facebook and Twitter.
Once the files are uploaded, you can then embed them into your blog or website. This will make it easy for visitors to find your videos and share them with their friends. In addition, this will help boost your SEO efforts by increasing the number of inbound links – e.g.: from other webmasters – to your site.
For best results, you should try to create as much video content as possible. Some ideas include:
Product demonstrations and tutorials How-to guides Video blogging (where you talk directly to the camera) Webinars Listening sessions – e.g.: customer interviews, telephone surveys, or discussions about website feedback Events – e.g.: company parties and conferences Training and orientation sessions for new employees
Tip 15: Set up help desk software
A helpdesk system is an excellent way for customers to get in touch with you, especially if they need assistance right away.
It also makes it possible to track all your customer requests, manage staff responsibilities more effectively, and transform the process of getting feedback into something positive for both your business and your customers.
Some of the most popular helpdesk systems include FreshDesk, Zendesk, Kayako, Salesforce Desk, GrooveHQ, HelpSpot, Voxie, Authen.it, TeamSupport, Grovo, Uservoice, HelpFlow Cloud, Get Satisfaction Desk, Desk.com, and Zoho Desk.
There are many different ways you can market your creative agency, but it’s important to choose the best ones based on your budget and business needs. Hopefully, this post will give you some ideas on how to get started.