Starting a marketing agency can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful marketing agency.
Importantly, a critical step in starting a marketing agency is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Marketing Agency:
- Choose the Name for Your Marketing Agency
- Develop Your Marketing Agency Plan
- Choose the Legal Structure for Your Marketing Agency
- Secure Startup Funding for Your Marketing Agency (If Needed)
- Secure a Location for Your Business
- Register Your Marketing Agency with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Marketing Agency
- Buy or Lease the Right Marketing Agency Equipment
- Develop Your Marketing Agency Marketing Materials
- Purchase and Setup the Software Needed to Run Your Marketing Agency
- Open for Business
1. Choose the Name for Your Marketing Agency
The first step to starting a marketing agency is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your marketing agency:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your own business.
2. Develop Your Marketing Agency Plan
One of the most important steps in starting a marketing agency is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your marketing business.
- Company Overview – this section tells the reader about the history of your marketing agency and what type of marketing agency you operate. For example, are you an advertising agency, a public relations firm, or an interactive agency?
- Industry Analysis – here you will document key information about the marketing industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target audience are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing strategy should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your own agency? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your marketing agency make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Marketing Agency
Next you need to choose a legal structure for your marketing agency and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the marketing agency and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a marketing agency together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a marketing agency include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a marketing agency is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your marketing agency, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Marketing Agency (If Needed)
In developing your marketing agency plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a marketing agency to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a marketing agency that they believe has high potential for growth.
5. Secure a Location for Your Business
When starting a marketing agency, there are numerous things you need to take into account. One of the most important is finding a location for your business. Here are a few tips on how to find the perfect spot for your new marketing firm:
- Decide what type of location you need.
Do you need an office in a trendy part of town, or will a more industrial area suffice? Do you need space for clients to come and meet with you, or is a remote office okay?
- Narrow down your search.
Once you know what type of location you need, start narrowing down your search. Consider the cost of rent, the availability of parking, and the proximity to potential clients.
- Tour the locations.
Once you’ve found a few promising locations, take the time to tour them. This will give you a better idea of what each space has to offer and whether it meets your needs.
- Consider your budget.
Renting office space can be expensive, so make sure you factor this into your decision-making process. If you’re on a tight budget, consider working from home or finding a space that’s shared with other businesses.
- Make a final decision.
When you’ve weighed all the pros and cons, make a final decision about where to locate your marketing agency. This is an important decision, so take your time and make sure you’re making the best choice for your business.
Use these tips to find the perfect spot for your business and get your new venture off the ground.
6. Register Your Marketing Agency with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your marketing agency’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your marketing agency to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
In order to start a marketing agency, you will need a business license and a permit to operate as a marketing agency. You may also need to register your business with the state, county, or city. Reach out to your local government office for more information on what licenses and permits you will need to start your marketing agency.
10. Get Business Insurance for Your Marketing Agency
The type of insurance you need to operate a marketing agency will depend on the type of business you are running.
Some business insurance policies you should consider for your marketing agency include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Marketing Agency Equipment
The equipment you need to run your marketing agency will depend on the services you offer. However, there are some basics that you will need:
– A computer
– A phone
– A mailing address
– Some tables and chairs for meeting with clients and employees
– Basic office supplies like pens, paper, and printer
12. Develop Your Marketing Agency Marketing Materials
Marketing materials will be required to attract and retain customers to your marketing agency.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your marketing agency. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional marketing agency website provides prospective clients with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your marketing agency.
13. Purchase and Setup the Software Needed to Run Your Marketing Agency
The software that is needed to run a marketing agency is:
-Email marketing software
-Social media management software
-Customer relationship management (CRM) System
-Google AdWords and analytics tools
14. Open for Business
You are now ready to open your marketing agency. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Marketing Agency FAQs
Is it hard to start a marketing agency?
There is no one-size-fits-all answer to this question, as the ease or difficulty of starting a marketing agency will vary depending on your skills, experience, and resources.
However, if you follow the steps above, you should be able to start your marketing agency without too much difficulty.
How can I start a marketing agency with no experience?
If you're looking to start a marketing company with no experience there are a few key things to consider. First, you'll need to come up with a business plan and strategy for your agency. This will help you outline your goals and objectives, as well as how you plan on achieving them. You'll also need to create a branding strategy for your agency, and make sure you have a strong online presence. Additionally, it's important to build a team of talented marketing professionals to help you to achieve your goals. By following these tips, you can start a successful marketing agency with no experience.
What type of marketing agency is most profitable?
There is no one-size-fits-all answer to this question, as the most profitable type of marketing agency will vary depending on your specific goals and needs. However, a full-service agency that can offer a comprehensive range of services is often the most successful option. Such an agency can provide everything from branding and advertising to website design and search engine optimization (SEO). By contrast, a niche marketing agency that specializes in a single type of service to generate leads (such as social media marketing) may not be as profitable, as it will not be able to offer a comprehensive suite of services.
How much does it cost to start a marketing agency?
Starting your own marketing agency typically costs between $10,000 and $50,000, depending on the size and scope of your business. However, if you're willing to bootstrap your agency (i.e., start without any outside investment), you can get started for as little as $1,000.
The startup costs for a marketing agency include:
-Domain name and website hosting
-Marketing materials (e.g., business cards, letterhead, signage)
-Office space and equipment
-Software licenses and subscriptions
-Professional services (e.g., legal, accounting, marketing)
What are the ongoing expenses for a marketing agency?
There are a few main ongoing expenses for a marketing agency. One of the most substantial expenses will be your employees' salaries. Marketing materials are another significant expense. Agencies need to constantly produce new content and designs to stay visible in the market. Technology expenses are also a typical cost for agencies. They need to have up-to-date software and hardware to be effective. Finally, agencies need to pay for office space and other overhead costs. These expenses can add up quickly, so agencies need to stay mindful of their spending.
How does a marketing agency make money?
Marketing agencies make money by developing and implementing marketing strategies to help businesses grow. They provide planning, advertising, branding, consulting, content marketing, digital marketing, research, and analytics services. Another way marketing businesses make money is through additional fees associated with their services. For example, an agency may charge a business a percentage of the total marketing budget for planning and implementation services. Finally, some agencies earn commissions by referring clients to other service providers, such as web design firms or printing companies.
Is owning a marketing agency profitable?
There are a few reasons owning a marketing agency can be profitable. First, agencies typically have low overhead costs, as they often work from home or remotely. Additionally, agencies tend to have a large pool of potential clients, as almost every business needs marketing services at some point. Finally, agencies can be very flexible in terms of the services they offer, which allows them to cater to a wide range of clients. This flexibility also means that agencies can grow or shrink their services as needed, which helps them stay profitable even in tough economic times. Altogether, these factors contribute to making a marketing agency a lucrative business venture.
Why do marketing agencies fail?
Some marketing agencies fail because of poor business models. They are often staffed with people who have never worked in marketing before. This can lead to risky decisions and failure.
Another reason marketing agencies fail is because they are overpromising and not able to deliver. This can be due to lack of experience, lack of resources, or both.
Third, many marketing agencies focus on acquiring new clients rather than nurturing the ones they have. This can lead to a loss in business once the new clients realize that the agency isn't actually meeting their needs.
Lastly, marketing agencies may fail when they are run by people who are more interested in making money than in providing quality services. This can lead to a lot of wasted time and resources, and can eventually spell doom for the business.