Starting an agency can be a thrilling venture, but it brings its own challenges and needs a certain base of knowledge and skill. Whether you have always had the entrepreneurial bug or you are an existing business branching out, these are the steps worth taking first — the ones that make the transition smoother rather than something you fix later.
1. Develop your agency mission
Before you look at financials or scout locations, write the mission statement. It provides a foundation for the agency’s decisions and makes sure everyone understands the direction the organisation is travelling in.
This sounds like the soft step and is not. It is what you fall back on when you have to decide whether to take a badly fitting client in month three.
2. Put together a business plan
A comprehensive plan detailing the goals you have for the agency. It should cover detailed market research on your target market, the services you intend to offer, the rationale behind your pricing model, estimated startup costs, relevant partnerships and your financial projections — plus a strategy for how you will promote the agency and attract clients.
The pricing rationale is the part most often skipped and most often regretted — see all about making quotes.
3. Scout out a location
You need somewhere to do business, so find a spot that genuinely works: proximity to your target market, access to amenities, and the cost of renting or buying.
Worth weighing against how much of the work is genuinely location-dependent. An agency whose team and clients are distributed may find the premises are the largest avoidable cost on the plan.
4. Hire talented professionals
If you want the agency to stand out, talent is what does it. Good people are the difference in engaging potential customers and keeping them loyal.
Start with leadership — hire the right people to lead the team. Whatever industry you are in, it pays to bring in experienced professionals from other fields, marketing and finance in particular, to run day-to-day operations.
5. Manage your finances with care
Money management is a large part of running an agency. Secure funding first: an investor, a loan, your own capital, or some combination.
Then set up the documentation and tax returns that keep you compliant with local regulations. Billing software makes that more efficient and more secure, and you can hand the job to a financial adviser if you would rather not do it yourself. With that in place, you are ready to launch.
Getting this right at the beginning is far cheaper than reconstructing a year of records later. See accounting.
6. Get your contracts and terms in writing
Agree scope, payment terms and what happens when a project changes — before the first project, not during it. Most agency disputes are about scope creep that nobody documented, and the cost is usually borne by the agency.
7. Set up the systems before you need them
Time tracking, quoting, invoicing and chasing should exist on day one. They are trivial to establish with three clients and painful to retrofit with thirty — by which point you are reconstructing months of billable hours from memory.
See time tracking and project management.
Conclusion
Starting an agency is a formidable process, but with the right knowledge and the right resources you can get off the ground quickly. Settle these seven before you start trading and you remove most of the problems that otherwise arrive in month six — the ones that are far more expensive to fix than to prevent.