Starting an advertising agency can be a very exciting endeavor, but one that requires a high level of accountability and cooperation among the employees, clients, and media involved. Many people consider the entrepreneurial route, but it is a risky road to take, especially if you don't set yourself up for success. You don't have to sell a unique product, but you should offer a one-of-a-kind service.

Anyone can start his or her own advertising agency with the right attitude and financial backing. Competition will be fierce. You can't expect to put your feet up because it's your own business. On the contrary, you should expect to work very hard in the beginning. Before quitting your full time job in the hopes that you become your own boss and open your own advertising small business, ask yourself the following:

1. Are you committed? It takes more than just a good idea to open your own advertising service. It takes time, money and hard work.

2. If applicable, do you have the right partners? Friends are not always good business partners. Vet potential partners as objectively as possible.

3. Have you done your research to make sure there's demand for your product or service? You may have a great idea, but how many others have the same idea?

Action Steps
The best contacts and resources to help you get it done

Start your own advertising firm with credibility and get licensed

All advertising businesses are legally required to obtain some type of government license. Other official documents include seller's permits, federal and state employer tax ID numbers, and trade name certificates. There are many online resources and state departments that can help you file these documents. Should you decide to work from your home, you will need special zoning documentation as well.

I recommend: Business.gov can assist you in obtaining the necessary federal, state and local permits, licenses, and registrations you'll need to start offering advertising firm services successfully. Use the “Permit Me” tool for efficiency. The Internal Revenue Service can help you get an employer tax ID number for your business.

Join an association and build credibility when you open advertising small business services

As a new business owner, you don't have to go it completely alone. Consider joining an industry association for support. Organizations bring together professionals with the same goals and challenges. As a member, you'll have access to certification and educational opportunities. Professional organizations also organize networking events, so you can meet your peers, vendors and suppliers.

I recommend: As part of its career development program, the American Association of Advertising Agencies offers national workshops and seminars for professionals across all levels and disciplines. The American Advertising Federation provides an online calendar that includes a variety of industry networking events.

Partner with reliable employees when you open your own advertising business

When you start an advertising firm, it's imperative that you partner with the right employees. Your employees must be reliable, accommodating and thorough. You want to build a long-term relationship with your staff and they must also share your interest in pleasing your clients.

I recommend: MarketingJobs.com offers a forum for employers to post openings in the advertising industry, not only on the site, but within the MarketingJobs.com Network. It also offers employer packages and specials. MarketingHire.com provides a niche database for industry recruiters.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When you first start advertising agency services, you may decide to balance your own finances. But as your business grows, consider partnering with an accountant who can help you with tax issues, and help you build a financially sound company.

Because advertising agencies provide primarily services, rather than final products, a small ad agency can be a low-cost start-up. If you outsource graphic design, copywriting and production, you can reduce overhead even further. Then as your agency grows, you can bring some of the primary services that you use in-house. Before you start your advertising business, you’ll need to:

1. Collect media kits that list advertising rates, demographics and specs.
2. Introduce yourself to sales representatives at the media outlets you plan to use regularly.
3. Create a portfolio of past work, if you have been in the industry, to highlight ad campaigns you’ve worked on in the past.

Action Steps
The best contacts and resources to help you get it done

Stay on top of the advertising game

By subscribing to trade publications geared to ad agencies, you can keep up with industry events, trends, suppliers and technology.

I recommend: Brandweek focuses on brand identity, sponsorships, licensing, media usage and distribution, and promotions. Advertising Age magazine, along with its dotcom partners adcritic.com and Madison+Vine.com, provide articles, case studies, picks of the day and week and news on the advertising industry. Communication Arts magazine focuses on the print and illustration genres of advertising. Adweek covers print, regional news, best spots and other subjects pertaining to advertising.

Create a business plan for your advertising agency

Starting your own company by picking up where you left off at your last job in advertising may make it seem like the only change is that you are now the boss. But there’s more to starting your own agency to consider. Start with a detailed business plan and operations plans.

I recommend: PlanMagic Business software offers a comprehensive business plan guide and template that is customized for ad agencies as well as fully automated financials. The Advanced Edition further includes state-of-the-art financial analysis tools and a Web marketing guide. The Business Owners’ IdeaCafe lists start-up costs, potential earnings, equipment requirements and skills needed.

Join advertising industry trade associations

Joining a trade association not only allows you to continue your education and keep up with trends and technology, it also allows you to meet with your peers at trade shows and conventions and enter awards contests to add to your credentials.

I recommend: The American Association of Advertising Agencies not only provides support and education, but also offers group rates on workers' compensation, retirement savings plans, group insurance plans, affinity programs, liability insurance and business owners insurance. The Association of Hispanic Advertising Agencies provides leadership in raising awareness of the value of the Hispanic market opportunities and enhancing the professionalism of the industry.

Find clients for your advertising agency

You’ve planned your business, but now it’s time to find clients. Start by researching what companies regularly use advertising and what companies are in the market for a new agency.

I recommend: Advertising Database lists thousands of companies who use advertising and their annual needs and advertising budgets.

Build your contacts

Just as important as finding new clients, is the search for media contacts. If you have a system set up for media kits, rate cards and advertising specs, you’ll save time when in a crunch on your advertising campaigns.

I recommend: Subscribe to a service where you have advertising information at your fingertips. Burrelles Luce and Gebbie Press provide contact information to thousands of media outlets around the country. For a host of other media contact databases, visit Business.com.

Go virtual

A bricks and mortar business isn’t a necessity now that we are living in the internet age. The economy has become more global, so more companies have looked to virtual agencies to provide services that were in the past limited to local agencies. There are two ways to become a virtual online agency. The one that requires the least effort and capital is to have your presence on the web, but actually control the client accounts just as a bricks-and-mortar agency with good customer service and account management. The second option is to set up your website to enable the client to virtually build their ad campaigns themselves. This requires a great deal of website programming and database management online. For instance you would allow the user/client to choose the media format, the frequency and the budget before you even start managing the account.

I recommend: Check out how one full-service internet ad agency represents themselves by looking at their website at www.wspromotion.com. Pick-N-Click Advertising has gone one step further by allowing clients to access and build their advertising campaigns online. Learn more about how Pick-N-Click started and how the website works at bizjournals.com.

Create an Internet advertising agency

If radio, print and television hold up three corners of an advertising agency, then the fourth cornerstone would have to be the Internet. Companies are increasingly shifting their advertising dollars to alternative media, which means there’s a need for agencies that offer Internet advertising services.

I recommend: Make sure your Internet advertising practices uphold the truth in advertising, privacy and other regulations by checking out the “rules of the road” published on the Federal Trade Commission’s website. Check out clickz.com for information on Internet advertising, news, case studies and Internet advertising calculators. Find out more about what other online advertising agencies are offering at Business.com, where you can also find sources to help you navigate the basics of Internet advertising and search engine optimization.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Establish how you will introduce outsourced partners to your client ahead of time. The best way to brand your own agency is to provide each outsourced pro with a business card with your company name. This allows you to present yourself as a full-service company.
• •  Many media outlets reward their repeat advertisers with luxury boxes at sporting events, tickets to sponsored events and trips. Make sure your media contacts present these offers to you rather than directly to your client. You should always be the direct line to your client. This gives you the opportunity to get face time with your client in an informal setting.
• •  When you’re trying to reach top decision makers to gain clients, consider meeting them in an informal setting. Participate in or sponsor a local golf tournament. You’ll get invaluable face-time to build a rapport before you approach them for business.

Because advertising agencies provide primarily services, rather than final products, a small ad agency can be a low-cost start-up. If you outsource graphic design, copywriting and production, you can reduce overhead even further. Then as your agency grows, you can bring some of the primary services that you use in-house. Before you start your advertising business, you’ll need to:

1. Collect media kits that list advertising rates, demographics and specs.
2. Introduce yourself to sales representatives at the media outlets you plan to use regularly.
3. Create a portfolio of past work, if you have been in the industry, to highlight ad campaigns you’ve worked on in the past.

Action Steps
The best contacts and resources to help you get it done

Stay on top of the advertising game

By subscribing to trade publications geared to ad agencies, you can keep up with industry events, trends, suppliers and technology.

I recommend: Brandweek focuses on brand identity, sponsorships, licensing, media usage and distribution, and promotions. Advertising Age magazine, along with its dotcom partners adcritic.com and Madison+Vine.com, provide articles, case studies, picks of the day and week and news on the advertising industry. Communication Arts magazine focuses on the print and illustration genres of advertising. Adweek covers print, regional news, best spots and other subjects pertaining to advertising.

Create a business plan for your advertising agency

Starting your own company by picking up where you left off at your last job in advertising may make it seem like the only change is that you are now the boss. But there’s more to starting your own agency to consider. Start with a detailed business plan and operations plans.

I recommend: PlanMagic Business software offers a comprehensive business plan guide and template that is customized for ad agencies as well as fully automated financials. The Advanced Edition further includes state-of-the-art financial analysis tools and a Web marketing guide. The Business Owners’ IdeaCafe lists start-up costs, potential earnings, equipment requirements and skills needed.

Join advertising industry trade associations

Joining a trade association not only allows you to continue your education and keep up with trends and technology, it also allows you to meet with your peers at trade shows and conventions and enter awards contests to add to your credentials.

I recommend: The American Association of Advertising Agencies not only provides support and education, but also offers group rates on workers' compensation, retirement savings plans, group insurance plans, affinity programs, liability insurance and business owners insurance. The Association of Hispanic Advertising Agencies provides leadership in raising awareness of the value of the Hispanic market opportunities and enhancing the professionalism of the industry.

Find clients for your advertising agency

You’ve planned your business, but now it’s time to find clients. Start by researching what companies regularly use advertising and what companies are in the market for a new agency.

I recommend: Advertising Database lists thousands of companies who use advertising and their annual needs and advertising budgets.

Build your contacts

Just as important as finding new clients, is the search for media contacts. If you have a system set up for media kits, rate cards and advertising specs, you’ll save time when in a crunch on your advertising campaigns.

I recommend: Subscribe to a service where you have advertising information at your fingertips. Burrelles Luce and Gebbie Press provide contact information to thousands of media outlets around the country. For a host of other media contact databases, visit Business.com.

Go virtual

A bricks and mortar business isn’t a necessity now that we are living in the internet age. The economy has become more global, so more companies have looked to virtual agencies to provide services that were in the past limited to local agencies. There are two ways to become a virtual online agency. The one that requires the least effort and capital is to have your presence on the web, but actually control the client accounts just as a bricks-and-mortar agency with good customer service and account management. The second option is to set up your website to enable the client to virtually build their ad campaigns themselves. This requires a great deal of website programming and database management online. For instance you would allow the user/client to choose the media format, the frequency and the budget before you even start managing the account.

I recommend: Check out how one full-service internet ad agency represents themselves by looking at their website at www.wspromotion.com. Pick-N-Click Advertising has gone one step further by allowing clients to access and build their advertising campaigns online. Learn more about how Pick-N-Click started and how the website works at bizjournals.com.

Create an Internet advertising agency

If radio, print and television hold up three corners of an advertising agency, then the fourth cornerstone would have to be the Internet. Companies are increasingly shifting their advertising dollars to alternative media, which means there’s a need for agencies that offer Internet advertising services.

I recommend: Make sure your Internet advertising practices uphold the truth in advertising, privacy and other regulations by checking out the “rules of the road” published on the Federal Trade Commission’s website. Check out clickz.com for information on Internet advertising, news, case studies and Internet advertising calculators. Find out more about what other online advertising agencies are offering at Business.com, where you can also find sources to help you navigate the basics of Internet advertising and search engine optimization.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Establish how you will introduce outsourced partners to your client ahead of time. The best way to brand your own agency is to provide each outsourced pro with a business card with your company name. This allows you to present yourself as a full-service company.
• •  Many media outlets reward their repeat advertisers with luxury boxes at sporting events, tickets to sponsored events and trips. Make sure your media contacts present these offers to you rather than directly to your client. You should always be the direct line to your client. This gives you the opportunity to get face time with your client in an informal setting.
• •  When you’re trying to reach top decision makers to gain clients, consider meeting them in an informal setting. Participate in or sponsor a local golf tournament. You’ll get invaluable face-time to build a rapport before you approach them for business.

Starting an advertising agency can be a daunting task. There are employees to hire, a business to name, clients to acquire, an office to set up and financing to set up, to name just a few tasks the average entrepreneur must face. For the average person starting an advertising agency, there are many choices to make, and these key terms can help focus your energies.

Action Steps
The best contacts and resources to help you get it done

Advertising agency

An advertising agency is a company that helps its clients with communications, marketing and work related to creating and distributing ads.

I recommend: Marketing Teacher has a detailed guide to advertising agencies that includes an explanation of the components of an agency and the roles an agency plays.

Company structure filing

Filing a company structure involves deciding whether your company will be an LLC, a Sub Chapter S Corporation or another type of business. This type of filing -- usually done with the help of an attorney -- can help limit your liability in the event that your new business encounters legal problems.

I recommend: Tribble Ad Agency has an explanation of the types of company structures it is possible to select when starting an ad agency business.

Ezines

Ezines are electronic magazines. These publications are very cost-effective to start and many new advertising agencies establish ezines in order to have ad space to sell and have forums where they can promote clients' ads.

I recommend: StartupBizHub has a comprehensive explanation of ezines and how they can be used to start an advertising agency.

Multi-level marketing (MLM)

Multi-level marketing (MLM) is a form of advertising where employees are trained to sell products for commission. Due to the inexpensive nature of this advertising model, some new advertising companies begin by offering MLM programs.

I recommend: Today's Funda has a comprehensive explanation of MLM and how it can help entrepreneurs launch an advertising agency.

Advertising agency employees

At the beginning, you may be the only person working at your agency, so you will need to learn how to complete the various jobs. As your company becomes successful, you may need to hire advertising agency employees who will take care of the financial, creative, and administrative tasks.

I recommend: The American Association of Advertising Agencies has detailed information about every type of advertising agency employee. It is a useful list to review when starting your own advertising agency.

Advertising agency business plan

Before you begin your ad agency, you will need a business plan, which is a document that details your ideas for your company, including information about expenses, expected income and location of your business. You will need your business plan to apply for financing, to set professional goals, and to communicate with potential business partners or investors.

I recommend: Business-Plan-Made-Easy has a good explanation of what an advertising agency business plan is and what issues need to be considered to create a good plan.