Starting an Advertising Agency
Are you looking for a low-startup cost business idea to make money? If you want to finally pursue your passion of becoming an entrepreneur and start a lucrative business, we’re going to show you how to do it: starting an advertising agency!
The idea of forming your own ad agency might feel daunting and overwhelming but the process is easier than you think.
There are a ton of perks you get by starting your own advertising agency, like being your own boss, creating your dream schedule, working from home, unlimited income potential, and a whole lot more. You’ll also have the chance to help other businesses succeed through your digital marketing skills.
And you can launch your ad agency business as early as this week and start making money.
Let’s get started by talking about how to make money with your own advertising agency.
What is an Advertising Agency?
An advertising agency is a company that helps its clients (businesses) attract customers using advertising.
Businesses need customers, and ads serve as the link to connect customers to businesses. Ads are all around us, and they’re integrated so seamlessly into our everyday lives that you probably don’t even realize how many ads you see on a given day.
Like on your morning jog around the neighborhood, plugged into your AirPods listening to your favorite podcast or internet radio show – you probably heard some ads.
When you plop on the couch after a long day of work to watch Hulu or your favorite streaming service, you likely watch commercials during breaks in your television program. Those are advertisements.
Ads show up on websites you visit, blogs you read, on billboards when you drive on the highway, etc. Ads are everywhere.
What Do Advertising Agencies Do?
Ad agencies help advertise the products and services that their clients are offering. They can also bring awareness to a brand, event, cause, or nonprofit organization.
There are a mix of basic and complex tasks you will do while working in an advertising agency. These can include:
- Admin duties like answering emails and phone calls
- Posting to social media
- Maintaining your website
- Creating and managing lead campaigns
- Crafting advertising strategies for customers
- Market and data analysis
- Billing clients
Every ad agency is different and your company may not do all these things. It varies a bit from company to company.
What are the Requirements for Running an Advertising Agency?
First, you should know how to run successful ad campaigns for customers. This can be from past experience working for clients or through running ads for your personal side projects.
If starting an advertising agency sounds interesting to you, but you’re not confident about your skills, don’t let this stop you.
You can still move forward with the right education and background as your foundation. If you want to run an ad agency that focused on Facebook ads, for example, you could totally do that.
Our Facebook Side Hustle course is a lifeline you can use to freshen up your skills or educate yourself on how to run effective Facebook ad campaigns for businesses.
Facebook ads, Pinterest campaigns, whatever you’d like – the ball’s in your court.
That’s the beauty of running your own advertising agency business: you can take in any direction you’d like.
7 Steps for Starting an Advertising Agency
So you’ve decided to launch your own advertising agency. Here are 7 steps you need to get started:
- Create Your Business Plan
- Build Your Website
- Take a Legal Form
- Open a Business Account
- Get Business Permits and Licenses
- Identify Your Target Customer
- Create a Service Contract
Crafting Your Business Plan
This is a crucial first step in the process of starting your ad agency. Your business plan lays out all your ideas and future plans for the business.
You will identify costs, hone in on your target audience, create your business name, identify your legal forms, and figure out how much you’ll charge customers. You’ll also figure out how much profit you’ll earn, determine your break-even point, plan for scaling the business and more.
All this can sound overwhelming, but you keep your business plan relatively simple. Your plan likely won’t need to be presented to a committee or submitted to a bank for financing, so don’t sweat the details too much.
It’s just your business blueprint and it’s a great way to get all your thoughts and plans down on paper.
How much does it cost to open an advertising agency?
To start an advertising agency, startup costs are lower than you might think. Your business will be entirely online, so you save money by not having to invest in a warehouse, retail space, or even office space.
Many advertising agencies are operated alone or in a team, with all team members working from home.
While you definitely can rent out office space and take on the expense of utilities (think food, gas, etc.) this is totally optional.
This is one thing you’ll love about this kind of business: flexibility.
Typical startup costs you might incur working remotely will include:
- Personal computer
- Printing needs, if any
- Office furniture and supplies (think a desk, chair, etc.)
- Hosting plan and domain (for website)
- Internet and phone plan costs
You will save money if you already have a personal computer, work from home and will use your home internet plan and phone. Likewise, if you have a home office with a computer desk and office supplies, you can save money here as well, limiting your startup costs.
How do you want to structure your business?
The business form you take is entirely up to you. There are pros and cons to each business type. For example, if you form an LLC, this helps prevent you from being personally liable if an issue arises in the future.
You can also look at becoming a sole proprietor, corporation, etc.
Research business entities to choose the right form for your business.
For more information on forming an LLC, check out our podcast episode, Do I Need An LLC For My Online Business?
What’s a good business name?
Choosing a business name is a fun part of starting your own business. You can choose any name you’d like. Many ad agencies use the owner’s name for the business, so that’s always an option.
There are many business name generators available on the web, like this free one by Shopify.
Will you work alone or in a team?
You can create an advertising agency solely on your own. While a team does provide support and creates an outlet for outsourcing work, in the beginning stages of a startup, this may not be necessary.
One thing that makes starting an advertising agency a great side hustle is the ability to scale the business.
You can start a one-person show now and scale in the future, expanding your team to bring on other ad professionals to the business. This is an awesome way to make the business more profitable.
What target market are you eyeing?
Your target market or target audience is the group of clients you call your ideal customers. You’ll pick a niche and work with clients specifically in that niche.
Serving a specialized client base is easier than trying to help everyone. And you can begin to become an expert in that field.
For example, if your agency specializes in running Facebook ads for dentists, then you can become a top ad expert in the dental space.
Here are some other niches you can consider, to give you some examples:
- Beauty salons
- Nonprofit organizations
- Physical therapy centers
- Massage therapy centers
Building Your Website
Next, you’ll create your website for your ad agency business.
To build your website yourself, you can use our free guide for starting a blog. This is a step-by-step guide for launching an affordable website for as little as $2.95/month.
It will show you how to build a professional, attractive website that you can use to attract clients, charge services, do content marketing, collect leads, and more.
Your website will help you establish your web presence. It’ll define a space for you online for your ad agency to live. It’s an integral part of the process, so make sure you do not skip this!
Did you know you can start collecting leads for your advertising agency before you actually launch? This is a great way to hit the ground running.
Read about these 5 proven ways to generate leads on Facebook to get you started.
Open a Business Account
This is a simple, quick process. You absolutely want to separate your personal money from business funds. Things can get pretty complicated pretty quickly if you don’t.
A business account can be a business bank account at the same financial institution you bank with locally for your personal banking needs. You can also choose an online business bank or bank-alternative institution to work with.
Need help picking the right solution?
Get Business Permits and Licenses
Business permits and licenses: are they required? How much do they cost? Can you get away with operating without one?
The truth is, it depends. Where do you operate your business? Where do you live? Check federal and state requirements in your area to see if permits or licenses are needed for your ad agency, and then go from there.
Identify Your Target Customer
We touched on this a bit already. In this stage, you’ll finalize your decision for identifying who your ideal customer will be.
Who will benefit from your services? What client base do you know well?
Look at your past experience and consider the list of niches shared above to help pick your core customer.
When you’re done, move into the final step in the process and create your service contract!
Create a Service Contract
Your contract is the agreement between you and your client. It will highlight the terms of the services to be performed, so your relationship with the client will be clear, expectations will be set upfront, and any legal risks are minimized.
While you can DIY a service contract by using a template found on the web, we recommend you consult with a professional who can create a custom service contract for you.
It’s usually a one-time investment and it can save you a lot of headaches and avoid any misunderstanding in the future.
When you’re done with this, you are ready to launch!
How to Start an Advertising Agency Online
You can follow the outline shown above to start your path to creating your advertising agency business online.
A lot of ad agencies operate entirely online and this can be done even if you decide to target local businesses as your core client base.
In today’s modern age, face-to-face meetings are becoming extinct, in favor of online Zoom meetings, phone calls, and emails.
Save money on startup costs and use resources you already have at your disposal to start an advertising agency online.
What It’s Like to Start An Ad Agency
It’s a thrilling, exciting experience. You’ll enjoy being the boss, calling the shots, and having control over your income.
You can build your business at your own pace, and work on it after your day job or on weekends. This is a great business that can be scaled to run semi-passively or passively in the future.
The Final Word on Starting an Advertising Agency
There are tons of routes you can take when starting your ad agency business. With all the different paths available, we recommend looking into Facebook as your platform of choice.
Facebook has been the choice for business advertising for years now. It’s become a trusted platform for marketing and ads as well as a good outlet for companies to get the exposure they are seeking.
If you’re interested in learning more about running Facebook ads as your business, take a look at our Facebook Side Hustle course.
- How to start your own side business running Facebook ads in 28 days.
- How to make an extra $1,000 to $2,000 per month running Facebook ads for local businesses.
- The skills to run an advertising agency in Facebook ads in only 2-3 hours per week
- The best strategy for setting up successful Facebook ad campaigns and find clients who will pay for your services.
All you need is a solid system in place and you can run your business on autopilot. Good luck.