With B&T’s ‘start your own agency‘ survey now live, here Kinetic Marketing’s MD Mark Livings reveals his 10 top tips for anyone wanting to fulfil the dream and become their own boss…
In July, our agency turned five. Five incredible, but incredibly challenging years prior, we were making a decision that you yourself may be considering now – to start an agency of your own.
It’s romantic to think about running your own business, developing a culture that attracts and retains great staff and delivering work you’re proud of, but as I’m sure you’ve heard, it’s also HARD!
To be frank, it IS hard, but it is WORTH IT. We now have over 25 staff, multi-million dollar turnover and a list of clients we’re proud to be working with on projects that are interesting, bold and fun.
So with the benefit of some small (but fresh) hindsight from someone who made the plunge, here’s a list of 10 tips for would-be agency founders. These are a mix of things we got right at the time, and some we found out about the hard way. Which is which will remain our little secret.
1) Prepare for hard work
Think about the hardest you’ve ever worked. Then multiply it by 10. Then add on top of that, managing situations outside your control, developing staff, recruiting, and all the other requirements of a new business owner and also ensuring you keep the quality of your work high.
It’s tough. Damn tough. So get your headspace sorted. It’ll be seriously hard going for at least a year, if not two.
It’s also critically important to let your family and friends know not only what you’re doing, but for them to be comfortable with the idea that they won’t be seeing you as much or as often as usual. Have the conversation before you commit. If your loved ones don’t support you, don’t do it. You’ll find it impossible to get through that first tough year of new business slog with your relationships intact unless they’re on board before you open for business.
2) Have a foundation client
If you ‘hang out the shingle’ and open a marketing agency without any prior commitments by clients, you’re making a huge mistake.
A marketing agency isn’t a convenience store. There’s no foot-traffic and no bay windows to showcase your work. Additionally, our sales journeys from first contact to first brief are very long.
Without a foundation client, you run the risk of burning through all your cash, especially if you’ve taken office space and staff on, and you may have to close the doors before you even start delivering work.
Make sure you have a client who will take a risk on you and give you their business day one. Have a frank discussion with them about billables, and plug it into your revenue modelling. Can you at least maintain the business on their work alone? If so, congratulations! You have a viable agency, at least on paper.
When you do capture that very special client number one, look after them! They’ll be your greatest asset and often your most powerful sales-force. Don’t underestimate the importance of referrals and word of mouth in business development, particularly in your first year. People talk.
3) Ensure you have enough cash that you don’t get into trouble
Unless you’re a trust fund kid, you’re going to need to watch your cash carefully. Talk to your foundation client about how soon you can have revenue coming in. If you’re particularly resourceful, you can secure up front payments for the first few projects, or a retainer to help you get started.
If you truly want to work together, you’ll find ways to make it happen. Just have the guts and discipline to talk about finance with your clients. It’s always an uncomfortable conversation, but a critical one to have.
If that’s not an option, put up your house. Or hit up your Nan. Then pay the loans off as soon as you can.
Most importantly, don’t get greedy! Take only what you need to live on. Leave your profits in the business – you’ll need them to fund growth. You business must be able to stand on it’s own two feet and grow in a self-sustaining fashion before you start pulling cash out of it.
4) Have your core team identified and an active talent radar
Identify who you want to work with, especially your ‘Day One’ team. Without exception, if you’re to be successful, these guys will be sweating blood for you and your business during start up.
Almost as important, is to have identified great talent and start dialogue with them as early as possible. Yes, potentially even before you start the business, ideally months before. Once you’ve made your decision, start having this conversation with people you think it would be great to work with:
“This is what we’re doing, if a role opens up, would you like to be part of our team?”
It’s an important one to have and have often.
This will help your business grow and for you to remain agile. This will ensure you don’t need to walk away from any incredible projects that may get offered to you and it will ensure you’re not so buried in work you can’t continue to develop more opportunities.
5) Have your systems worked out before you open for business, so you can focus on the work
Do your research – pick the software you’ll be using and ensure you’re absolutely fluent with it. Ensure all your staff are up to scratch as soon as possible. Mistakes or spending time skilling up will cost you dearly in your critical launch period.
6) Don’t skimp on good accountants or lawyers
A good accountant is like a mirror, and a good director gazes into it often.
Okay, that sounds silly, but it’s true. You must keep an eye on your financial position through your critical launch period and beyond. A good accountant won’t be afraid to tell you some home truths about putting on that extra resource, or buying new chairs or that fact you need to start chasing clients for their 90 day old invoices as your ATO payment is due in a fortnight.
Your friends and family will give you support and praise. Your accountant will give you cold, hard truth. Trust me, you will need both.
7) Do skimp on your office and fit-out
I would argue that not one single marketing account has ever been won because of an office location or fit out. Well, accounts worth winning and working on anyway.
Seriously, concentrate on the work. The rest is window-dressing. You can splurge on a fit-out or fancy office once you’re well and truly established. In the meantime, you’ll need that precious cash to channel into more talent and support to start freeing yourself from client service so you can concentrate on higher-level relationship management and business development.
8) Have an answer ready for when prospective clients challenge you on your size and tenur
“Why would we give you our business? You’re untested, with zero runs on the board and you’re a risk.
You must be able to answer this question. It is going to be asked, I guarantee it. You’ll need to be able to debunk this and give clients a reason to take you on. Those reasons will be your own, so think about them carefully and be able to articulate them when required.
A few thought starters: one thing the big end of town will never be able to compete with emerging businesses on is focus, passion for their account and importantly, agility.
9) Find a team that wants to take the journey with you
You’re going to be asking a lot of your team, especially your Day One team as I’ve mentioned above. Hard work is the least of it. You’ll also likely be asking them to be subject to stress and take a career risk on an agency with an uncertain future.
So why the hell would anyone want to come and work with you?
You need to be able to articulate a vision for your agency and have all staff share it. Talk about culture, and how they can help you shape it. Talk about celebrating wins and commiserating losses. Talk about what’s important to you, what type of projects excite you and how this will translate into your agency’s reason for being and the kind of work you’ll be chasing.
We all love to be involved in something motivating and exciting. Giving people a place for their opinion to matter and the opportunity to shape their workplace culture is something not many businesses make available to their employees.
10) Forget the PR – at least for the first year
The pages of industry journals and blogs are littered with ‘we’re coming industry’ or ’look out, we’re launching’ messages from start up agencies with zero credibility or runs on the board.
Of course you’ll never hear about the ones that didn’t make it. Very few agencies will drafts a press release announcing they’re going out of business.
I contest that trying to create or prop up a profile that doesn’t exist yet is a waste of time. You could use that time chasing new business, asking existing clients for referrals or delivering better work.
Spend those precious hours wisely. You can decide to invest it in business development, honing your internal systems or up-skilling your team or you can decide to peacock to the rest of the marketing industry (when really, you don’t have any feathers). Your choice.
For those of you considering starting your own shop, it’s almost certain to be the most important and life-changing decision you’ve made so far.
I do hope you found something new or helpful in the list.
Choose your time, prepare meticulously, then throw everything you can at it and make it happen.
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