How to Start an Advertising Agency

A modern office.

Starting a business is a big step both professionally and personally. Make sure you do your research and get advice from qualified people. To ensure your own success, you need to make sure you are on the right track.

This post offers the steps needed to start an advertising agency, along with tips and insights to consider before you begin. There are also resources you can use before you start and after you are up and running. Let’s now examine the steps required.

Steps to Starting an Advertising Agency

1. Research

Research is critical before starting. Without understanding the business, and the challenges you could face you will be going blindly into your business getting different results than you expected. I strongly suggest you learn all you can about the business before you get your feet wet. See An Inside Look Into the Business You Want To Start, for tips and insights, and advice from the right people.

You will also want to research your target market in addition to getting inside information. Marketing your advertising services effectively requires an understanding of the type of people you will be targeting. As an advertising agency, you’ll be doing market research for your clients, and you’ll want to ensure you do it for yourself as well. For more see, How To Understand Your Target Market

2. Choosing The Right Business Location

If you locate in the wrong area you will fail. The location you service is one of the most important factors that will determine if you succeed or fail. You need to operate in an area where there is demand for your services and the competition is acceptable. When you are in the right location you have eliminated one of the challenges that can hold you back. For more, see Choosing The Best Location for Your Business.

3. Choose a Business Name

When you choose a business name take your time to get an appropriate one from the start. A business name is something that rarely changes unless a business goes through restructuring or is bought out. Your business name is something that you will have for as long as you own your business. For this important step see How to Choose a Business Name.

4. Legalizing Your Company

You can’t run a business unless it’s legal and structured properly. In business there are risks and with the incorrect structure, you could put your personal assets on the line. For example, if your register as a sole proprietorship, even though it’s the easiest to set up it’s the structure that has the most risk. I suggest you consult a professional such as a lawyer, CPA, or a service that specializes in structuring businesses. See, How to Register your Business for more.

5. Create Your Corporate ID

Your corporate ID is the face of your business. It contains a number of components, such as your website, business cards, stationary, logo, and promotional items. You will want a corporate ID you can be proud of and you need a professional design. See A Complete Introduction to Corporate Identity Packages for more.

6. Estimating Your Start-up Cost

Your start-up costs will be a large part of your investment. When you estimate accurately you will reduce many problems during the initial operation of your business. If you run out of operating money your business will come to a standstill and it could keep you from operating effectively or even opening. For more see, Estimating Start-up Costs: Are you Missing Anything?

7. Writing a Business Plan

Your business plan is a necessary document that will help you stay on track, make better decisions and help you get funding if you require it. It takes time and effort to create a business plan, but in the end, it will be worth it because you have a road map to help you get started and keep you on track. It’s also worth noting that your business plan can be updated as necessary. For details see How to Write a Business Plan.

8. Set up Your Banking

In order to track your expenses and keep your personal and business finances separate, you’ll need to set up a bank account. The baker you deal with is also an important consideration because the banker you choose can make a difference further down the road. Your banker can help with financial advice and loan approvals. For more see, How to Open a Business Bank Account. You may also want to look at, What Is a Merchant Account and How to Get One.

9. Get the Funding for Your Operation

Funding is an essential part of setting up your ad agency. With sufficient funds, you’ll be able to handle unseen issues that will appear. It doesn’t matter how much you plan for there will be issues you haven’t anticipated, therefore when you have extra money or an emergency fund you’ll be able to deal with the issues you couldn’t see during the planning stage. See, Getting a Small Business Loan for more.

10. Software Setup

The software you choose is a critical step. You want to get a system set up for now and in the future. You want a package that is supported and updated. You want to avoid entering data over the next few years only to find you have to use a new system that will require you to convert your data to the new system. Check out Google’s Latest Search Results for Software Packages Related to an Advertising Agency.

11. Get The Right Business Insurance

Operating a business without insurance can be a recipe for failure. Imagine a client who came in for a meeting and was insured on-site. If you don’t have the proper insurance it could be a huge lawsuit and can cause you to shut down your business. Another consideration is professional liability insurance. For more on business insurance, see What to Know About Business Insurance, you will also want to browse the latest Google Search Results for Advertising Agency Insurance.

12. Office Setup

Your office is a critical component for operating your ad agency. You need to have an office for meeting and managing the business and you need an area for your team to work. With an effective office you and your team will be organized and more productive. Without a plan in place, your team can lose productivity. See, Here are Considerations for The Setup of Your Office, for the details.

You also need to set up your office sign. Your sign is part of your Corporate ID, mentioned above. You need a business sign that leaves a good impression on your clients and matches the overall look and feel of your office. For more see, All About Company Signs.

13. Creating a Website

Your website is an important part of your business setup. Your website is the point of contact for your clients and potential clients. You will want a register your own domain name and sign up for your own hosting account so you have full control and full ownership of your online property.

Your website is a source of information and one of your most important marketing components. For more see How to Build a Website

14. Create an External Support Team

An extra support team consists of people that are not on your payroll, but instead are a team of advisors that you can depend on for advice and services that you may need. Your team needs to be in place so you have someone to go to when needed. For more see, Building a Team of Professional Advisors for Your Business.

15. Hiring Employees

You may be planning on running your agency on your own at first, and if you can keep up it’s a good idea because payroll is a huge expense. Once your business gains more clients, you will need to do all the work and manage the business and you won’t be able to grow without hiring employees. It’s important to ensure you hire the right team. You may need receptionists, sales executives, graphic designers, etc. As your business grows so will your workforce. For more see, How and When to Hire a New Employee.

Next Steps to Evaluate

At this point of the process, you have done your research, legalized your business, set up your finances, office, etc. you have the steps needed to start, now it’s time to get clients. In the first step you did research about your target audience, now it’s time to reach out to them. In our article How To Get Customers Through the Door, you’ll find a few ideas you can use.

A Grand opening is another step you can take to bring awareness to your service.  Naturally, before you have a grand opening you will want to have everything else set up and running because you want to offer your services immediately when the opportunity is present. See How To Plan a Grand Opening for more.

For more ideas to market your business, see our marketing section to spark your creativity.

Considerations Before You Start

This section will find some key points to consider when starting.

Points To Consider Before Starting

Here are a few considerations for opening.

  • What can you bring to the marketplace that others can’t? Is there something you will specialize in, for example, social media, billboard advertising, TV, radio, etc?
  • Can you get talented people to work in your agency?
  • Do you have the funds to start the business?
  • Do you have enough money for personal expenses until your business is stable?
  • For advertising to be successful, you must deliver results. Without a proven track record you will lose credibility and clients.
  • Building a reputation and protecting it is one of the challenges of operating this type of business.
  • Managing multiple clients can be challenging.

Business ownership is not for everyone. It takes a lot of time, effort, and work to run a business, and financial investment is involved.

Your motivation is another critical factor to consider. Why are you opening an advertising agency? Do you have the right skill set for it? Once you have the answers to these questions, you can continue to build your business.

Learn more on our page Business Start-up Considerations


The following resources will help you start and run your agency. You can use this page as a refresher whenever you need them.

Consider Buying an Exisisting Advertising Agency

Consider buying an existing business instead of starting from scratch. The advantage of this strategy is that it eliminates the headache of starting from scratch, but it also has some disadvantages.

Some of the benefits are:

  • You eliminate the startup phase.
  • You know upfront whether it is a successful business or not.
  • You get an existing customer base.
  • As soon as you purchase an agency, you start earning revenue.
  • You also take over the business’ established reputation.

These are some of the drawbacks of purchasing an existing business:

  • Buying an existing business costs more than starting one from scratch.
  • Problematic parts of the business will have to be addressed.
  • Business operations may be adversely affected by completely changing the business to your preference.

Don’t let the drawbacks discourage you. You can still check the listings on the market since you never know what you will find. Even if you can’t find a good match, you will know more about the business. Search Google for advertising agencies for sale.


The advertising industry is full of publications providing tips and insight into trends in the industry.

Below is a list of publications that provide the most up-to-date information. You should visit this link at least once a month to stay current.

Click here for the latest publications related to an advertising agency.

Trends and Statistics

The best way to gain a clear picture of the industry’s movements is to follow trends and study statistics, as they can provide you with tips and information that you may not have considered. In addition, trends and statistics can reveal shifts in the industry. You’ll be able to identify whether these shifts are beneficial or detrimental to your business.

For more information on industry trends and statistics, click here.


You must familiarize yourself with every aspect of the advertising industry when you decide to enter it. Terminology is critical. When you are familiar with industry lingo, it becomes much easier to comprehend the material, and chatting and conducting business with others in the sector becomes a lot smoother.

Check Terminology in the Advertising Industry.


You can benefit from advertising associations in many ways as they are known to publish helpful information about the industry and host events over the years. At these events, you can network with others in the industry.

Check some Associations Related to the Advertising Industry here and learn more about Joining a Trade Association tips.

Top Advertising Agencies

When you’re starting out, it’s okay to look at major advertising agencies and learn how they operate. You will have a better understanding of what the market offers, pricing strategies, and other valuable business strategies that you can use for your own business. Avoid focusing only on your competitors, though. Always be aware of the competition and their business dealings, and focus on offering the best service you can to your clients.

Check out the Top Advertising Agencies in Your Area.


When people want to learn something new, they usually start by reading books. To gain knowledge about advertising agencies, books are an excellent resource. It is not necessary to read the book cover to cover if you are a busy person, but you can skip to the chapter you need.

Check out the Most Recent Google Search Results for Advertising Agency Books.

Industry News

A great way to stay up to date on current events in the advertising industry is to read news articles about advertising. These stories can be easily found on Google news. To ensure you get these stories in your inbox, set up a Google alert. The Google Alert will notify you whenever a news story is posted related to the advertising industry.

Check out Google’s News Search Results Related to the Advertising Industry.

Videos on YouTube

YouTube is a good place to learn visually. On YouTube, you’ll find many informative videos with tips and insights on advertising.

Another benefit of YouTube is that it also recommends topics related to your keyword. You can expand your knowledge with these related videos.

See the Most Recent Videos Related to an Advertising Agency.