Starting an advertising business can be a daunting task, especially if you have no idea where to start. While it might seem like there are hundreds of steps involved in starting your own ad agency, the truth is that most of them are very simple and straightforward. We’ve created a “How to start advertising business” guide so that you don’t need to worry about anything but getting started with your new venture!
Follow our step-by-step process for opening an advertising agency and get on the path towards success today!
How to start advertising business? Come up with a catchy company name
How to start advertising business? Come up with a catchy company name. There are literally millions of ad agencies already in existence, so you’re going to want to find a way to make yours stand out from everyone else’s. You can do this by using a clever or catchy company name that is relevant to your niche market. For example, if you’re targeting pet owners and their four-legged friends, try something like: Pets R’ Us or Fido’s Fancy. If you’re going for a more general name that can appeal to a wider audience, try something like Shoot Shoot Shoot Advertising. While the company does have a very clever name, it also has a clear image as an ad agency and allows for an easy transition into a tagline like “Advertising made easier.”
How to start advertising business? Register your company as an LLC, S-Corp or C-Corp.
Unfortunately, most people don’t fully understand the pros and cons of both the LLC and Corporation registrations. However, there are some key differences that you need to consider before you open your agency.
LLC stands for Limited Liability Company and is one of the most common business entities in the US. This type of structure has some critical benefits, including:
- Protection of personal assets from company related debts or lawsuits
- Fewer tax filings and less paperwork as compared to the corporation
- Lower cost of operation as compared to a Corporation
However, there is one major drawback that must be taken into consideration: double taxation. This occurs when you pay taxes on the company’s earnings and then also on your personal income for those same dollars (which can significantly reduce your profits). So how do you decide if an LLC is right for your business?
If you’re just starting out and not making any money yet, then the double taxation issue really won’t affect you. You can choose to operate as an LLC and pay fewer annual fees than a corporation, which means more of your hard-earned profits will be going into your pocket! On the other hand, if you’re a fairly established business and have a good amount of money to work with, then the double taxation issue is something that you should definitely look into. If this doesn’t bother you or your accountant, then an LLC may be right for you!
Corporation tax structures are slightly more complicated than an LLC. In fact, there are actually three types of corporations that you can choose from! We recommend that you speak to an accountant about which one would be best for your advertising agency. The three different kinds are:
- C-Corporation stands for “C”ommercial Corporation
- S-Corporation stands for “S”tate Corporation
- Limited Liability Corporation (LLC)
The corporation is one of the most popular business structures in terms of its tax advantages. Unlike the LLC, you won’t be subject to double taxation because your corporation pays taxes on its earnings and not your personal income. However, keep in mind that there are also some downsides to this structure, including:
- A higher cost of operation than with an LLC
- Much more complicated tax filings
- Public disclosure of financial records (which isn’t good if you plan on competing for large contracts)
The main thing that you should take into consideration is how you plan to run your advertising agency. For example, if you’re looking for the quick and easy way to make money, then an LLC is probably the best option for you. On the other hand, it’s very common that large corporations choose to operate as a C-Corporation. That’s because they have more than one owner (shareholder), which makes it much more difficult to be taxed as an LLC.
If you’re looking for a general consensus on which one is the “best”, then your best bet is to go with either an S-Corp or C-Corp registration. The reason for this is that they combine the benefits of both entities and don’t have any major drawbacks. However, you should know that an LLC is not a corporation and vice versa!
If you’re still unsure of which business structure to pick for your advertising agency, then we recommend that you do some research online or talk to your accountant about the benefits of each option. Unfortunately, there really isn’t a one-size-fits-all answer that suits every business.
How to start advertising business? Create a business plan for your Advertising Agency
Once you have a name, then it’s time to get serious about your business plan for your Advertising Agency. You need a good idea of what you’re going for and how much investment it’s going to take to get there. Your business plan should be around 10 pages long and include:
This should include an analysis of your target market, marketing strategy, etc.
The reason why you need a business plan for your advertising agency is to have a clear picture of where you want to go as a business and how you plan on getting there. A good business plan will usually have the following sections:
- A brief summary about your business and its goals: Think of this section as a “elevator pitch” that you give someone when they ask, “What do you do?” or “How does your company make money?”
- Market Analysis: Who is the target market for my product/service? Do I have a large enough share of that market to succeed?
- Marketing Strategy: How will I reach my target market? What marketing channels do I plan on using?
- Management Team & Personnel Plan: Who are the owners, managers, etc.? This section should also include your resume and any other relevant experience you have. Be sure to indicate the specific duties that you will have within your advertising agency .
- Operations & Financial Plan: How is my business going to operate? What are the day-to-day tasks of each employee? You should also include a financial plan that shows how much money you need to get started and how much money you will need for working capital. One of the most common mistakes that new businesses make is underestimating their expenses and overestimating their revenue. Be sure to create a realistic plan that factors in things like taxes, overhead costs, etc..
- Appendix: Include any other relevant documents or information related to your business, such as a copy of your business plan.
You should also have a separate section within your business plan that covers the benefits and drawbacks of each structure discussed earlier in this article. This is very important because it’ll give you a better idea of which type of company you should register for your Advertising Agency.
Get an Employer Identification Number (EIN) from the IRS.
Before you can start your own advertising agency , you’ll need to apply for an Employer Identification Number (EIN). An EIN is a unique number that the IRS assigns to all corporations and business entities. It’s similar to a Social Security Number for an individual – it won’t ever change, it’s required to open up business bank accounts, apply for business licenses, etc..
While you can technically use your Social Security Number instead of applying for an EIN, it is not recommended. The main reason being that if you have employees , you’ll need to withhold payroll taxes & report earnings to the IRS quarterly. This could get very messy and may cost you a ton of extra money come tax time!
The IRS has a very detailed explanation on their website about who is required to apply for an EIN and how to do it. You can find that information here: ( http://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-(ein) ).
Design a Logo
A logo is an important aspect of any successful advertising agency . It needs to be eye-catching and should represent the values and mission of your company. If you’re not very artistically inclined, there are plenty of websites that offer custom logo design for a reasonable price. Check out these examples: logoyes and fiverr
When designing your logo, try to keep it simple at first and then add more detailed elements later on if necessary . It can be tempting to include all of your ideas, but a cluttered logo is not going to look professional and may confuse potential clients.
Once you have your logo, make sure that you get your business cards designed as well. A good graphic designer can help you with this!
Create a Business Website & Social Media Accounts
In the digital age, pretty much all advertising agencies must have a website. It is very beneficial to have a platform in which you can present yourself and your company to potential clients. For example, if someone Googles “advertising agencies in Miami”, they’ll get hundreds of results – many of them will be websites that actually lead them directly to the company’s portfolio!
There are several ways that you can go about designing a website for your advertising agency , each with their own pros and cons.
- Hiring a freelance web designer: A good option if you have the budget, but also allows you to maintain control over the final product.
- Using an online website builder : Another affordable way to go, but with less flexibility than having a custom site.
- Creating a website yourself using free online resources: Not recommended, but can be done if you have the technical skills to pull it off.
Regardless of how you choose to design your Advertising Agency’s website, make sure that there are no broken links or coding issues. A site with errors in the source code will leave a bad impression.
For instance, if someone is using their smartphone to visit your site, it must be mobile-responsive (this means that the content automatically re-arranges itself for easy viewing on different screen sizes). If you use a free online template or purchase a pre-made theme, there’s no guarantee that it’ll work across all browsers and devices.
