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How to start your own agency

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We've all had those moments at work -- let's call them "Johnny Paycheck moments" -- where we'd love to just take this job and shove it. Countless desk jockeys share the dream of packing up the knick knacks and coffee mugs, kissing the office goodbye, and starting a new venture that fulfills their creative goals and passions.


Believe it or not, some people actually follow through on this dream. They quit good-paying gigs at agencies and go out on their own. Some want a little more control over their work lives, some depart for creative differences, and still others do so out of necessity.


To find out exactly what goes into starting a digital agency, iMedia spoke with three agency founders who are in various stages of their careers. Tom Hespos, the president of Underscore Marketing, has watched his business grow steadily since starting it eight years ago. C.C. Chapman co-founded The Advanced Guard before selling to Campfire and is now a full-time freelancer. Meanwhile, Adam Broitman is a little more than a year removed from launching his agency, Circ.us, with partner John Swords.


The spark
There are countless reasons for going out on your own: creative differences with bosses, the desire to have more control over your work, and a fear of losing your job.


Chapman was a VP of new marketing at crayon, but he felt he approached business in a different way from his bosses. Chapman originally left to freelance and turned into something of an accidental entrepreneur when clients approached him and partner Steve Coulson for work. Three months after starting, the duo realized they made a profit.


In Hespos' case, he started his own venture out of necessity. He'd just been let go from an agency in 2002, and wanted to avoid that experience in the future. It was this desire that led him to found Underscore Marketing with four other partners.


"The real reason that you want to go out and do this is for yourself," Hespos says. "I wanted to be able to control my own destiny. If I screw something up, I can own up to it 100 percent."


Broitman, who also happened to be at crayon, simply wanted a little more control over the creative process and had been kicking the idea around for years.


"At crayon we were doing a lot of social media consulting, prior to that I was on the media side, and I wanted to do something where we could deliver a holistic experience: We'd say, 'Here's the idea, here's the idea fleshed out, here's the idea produced,'" he says. "I often think creativity goes wrong when everyone puts their stamp on it, and then an idea looks nothing like it did."


If you're going to up and quit, it helps to have a solid plan in place and a little nest egg saved up for living expenses. It's also best to give your current employer as much notice as possible, but be prepared for the worst.


"Sometimes in the agency world, you tell them that you're leaving and you're gone the next day, so be ready for that," Chapman says.


Ideally, it helps to formulate a plan in your free time. While some might be starting their own agencies out of necessity like Hespos, if you have a day job now, spend your nights planning what you want to do, and how you go about it.


Next page >>

Finding clients
Of course, once you've quit your day job you can't really launch your agency without clients. Landing the first client is the big key. Squeaky Wheel, which just won one of Ad Age's Small Agency of the Year awards, started in 2001 by telling clients it would work for free for a year, just to prove its mettle. That's not possible for everyone, but be prepared to work all the connections you have. It's also a smart idea to hit up industry events and conferences. In short, hit the pavement hard and network as much as you can.


"If we heard a whisper that somebody was looking for an agency, we got all over them," says Hespos of Underscore's early days.


Once you've landed that first client, make sure you show them what you can do. When it comes to landing new business, word of mouth is often the best form of marketing.


"Getting that first client is the scariest one," Chapman says. "Once you have that, good hard work gets you more work. As long as we kept doing good work for our clients, more work would come in, word of mouth would spread, people would recommend us, or we'd work for other agencies too, which helped."


When Circ.us started in May 2009, Broitman and his partner hit the pavement and called everyone they knew. Because the two partners had so many skill sets -- search marketing, media buying, SEO -- the agency pitched everything it could and took what it got. Now, with several campaigns under its belt, the agency can focus more on the cutting-edge technology that relates to its core vision.


Having a specific vision or a specialty can be extremely helpful when starting up as well. "There are a million generalists. You'll have a harder time getting clients because you're going to be competing with the big guys," Chapman says.


One thing you absolutely want to avoid is stealing clients from your current job. Digital advertising is still a small industry, and you never want to burn bridges or irk the wrong person. "That's just got bad juju written all over it," Chapman says. "It's a small world, and what comes around goes around."


The name game
Of course, before you even start chasing clients, it helps to have a name. And let's face it, there is no shortage of wacky, inane agency names in the digital sector, and opinions vary on just how important your name is.


Circ.us took its name from Broitman's blog, A Media Circus, essentially making the agency an extension of what he was already doing.


"Look at what you're driven by and what you're passionate about; there should be some verbiage that can be condensed and that captures the essence of who you are," he says.


There are more practical things that go into naming an agency as well. Chapman and his partner liked the word "vanguard," and after deciding on The Advanced Guard, they had to make sure no one else was using it. A Google search returned very few results, and it helped that all the domains were free.


You'll need to be smart when picking a name too. Obviously, a dumb name could potentially turn off a client or, even worse, you won't be considered for the types of projects you want to be in the running for.


"Pick something people will remember, not something confusing," Chapman advises. "Don't try to be cute."


Hespos, meanwhile, believes it's important to get as much of what you can and who you are into the name. Underscore Marketing chose its name because of the double meaning of the word underscore. It means to emphasize, and the company wanted to put a focus on the marketing aspect. The underscore symbol also means something in the world of digital, and the company wanted to differentiate itself as a digital shop.


Of course, it doesn't really matter what you name your agency if you don't have the body of work to support it.


"Naming an agency is not on the same level as naming a brand, because ultimately an agency will be defined by the work," Broitman says. "I can call my agency 'Poop,' and if we do the best work, people in the industry will have to deal with that."

Being the boss
So now you've got a name and you've got a client. Undoubtedly you're in this business because you love the creative side, but running your own agency means you'll be tackling a lot of duties that the creative director at Ogilvy never thinks about: accounting, bills, and legal fees.


Chapman was prepared for long days, but he wasn't quite expecting all the administrative tasks that lay before him. "When you're at a big agency, that stuff gets handled by someone else," he says. "When it's your agency, you have to deal with that stuff while hunting for new business, while filling out fees, while trying to service your actual clients."


There are some advantages to starting a digital agency. Unlike, say, opening a store, you won't necessarily need a physical office. All three agency heads interviewed for this story started their ventures working from home, traveling to see clients, and even holding meetings in diners.


Finally opening an actual office can be quite an experience as well. Underscore's first office space was a basement apartment the agency rented for $500 a month. But with the cheap rent came the responsibility of cleaning the space out, and unfortunately, the back courtyard doubled as the neighborhood trash pit.


"I had to take people who should have been spending time on media plans and have them clear trash out of the backyard," Hespos says. "There are a lot of things that come up that are kind of unexpected where you literally have to get your hands dirty."


Being the boss also carries with it the immense pressure of succeeding. Remember how you needed to land those clients? The harsh truth is that you won't win every pitch, and you're going to have to deal with it. Some small agencies respond to countless RFPs before they even get a response from the agency. Be prepared to put lots of time into your work and never get an answer.


"Every hour of every day could be spent making your business better, and if you're spending whole chunks of your time responding to an RFP and you don't even get an answer about, it is soul sucking," Chapman says. "You have to pick yourself back up and say, 'We'll get the next one.'"


Try as you might, though, losing a pitch can flat out hurt -- especially because it's your personal brand that's being rejected.


Circ.us has only lost one job it pitched for, but the experience still crushed Broitman.


"I've been in that position before and I've lost pitches -- and I've cared -- but this is a different thing because ultimately it's a reflection of Adam Broitman," he says. "If you let it eat at your soul, that's not necessarily a good thing, but we're human beings, and I still think about it. Hopefully, in thinking about it, I can make better decisions."


In short, be prepared for long days, because starting an agency is not a 9 to 5 job. At the same time, don't let it consume you 24 hours a day.


"I always believe there has to be a work/life balance, and if you can't figure that out, you're just going to burn out and it's not going to be worth it," Chapman says. "Why work so hard if you can't actually enjoy your life too?"

Growing up
When you start your own agency, you obviously won't be doing all the work by yourself. All three of the agencies highlighted in this article were ventures between two or more partners, and all three relied significantly on teams of freelancers that grew and shrank depending on each project. But if you're in this for the long haul, your agency has a chance to grow. And if you think there's a lot of pressure coming from being your own boss, imagine what it feels like when you take on full-time employees.


"When you have employees, success becomes a whole new burden, because now you're worried about taking care of these other people who work for you," Chapman says. "It's the weirdest feeling that you go through, and then you realize we have to succeed, because we need to keep a roof over their heads."


The first thing to keep in mind is to never grow ahead of your work. Overly ambitious agencies have grown too quickly in the past, which eventually leads to massive layoffs when things get bad.


When you know it's time to grow, find people who share your vision. With the current economic conditions, many people are willing to leave larger agencies or holding companies to find something more permanent. Be sure to sell the benefits of working for a small agency as well, namely the amount of experience they'll get.


"We always tell people they'll be exposed to things they might not see at a bigger agency, and they might have to do things outside their comfort zone, but that's all part of the entrepreneurial spirit," Hespos says.


Conclusion
While the challenges associated with starting your own agency may seem daunting, the rewards exceed them all.


"There are times when I say 'Whose idea was this? This was a dumb idea,'" Broitman says. "But at the end of the day, I love the fact that if I want to do anything, really, I can do whatever I want. I'm allowed to pitch whatever I want and come up with crazy, out-there concepts."


Ultimately, if you're kicking around the idea of venturing out on your own, now is the time to do it. Recessionary times are ideal, largely because of the flood of talent on the street. There's also the fact that you may never have another chance to start a business, and no one wants to look back 20 years later and wonder, "What if?"


"If you know that is what you should be doing, you should act on it right away," Broitman says. "Most people don't get that many chances to do something of that magnitude."


Rich Cherecwich is deputy editor of iMedia Connection.

On Twitter? Follow iMedia Connection at @iMediaTweet.

A former reporter and editor, Rich Cherecwich has an intimate knowledge of how journalists conceptualize, craft and write their content. At WIT Strategy, he works closely with clients to develop, edit and publish high-level thought leadership...

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Comments

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Commenter: Adam Kleinberg

2010, August 03

I think this is a good piece. One thing I'd add is that you need to have an unbridled sense of optimism. The truth is that starting an agency is not necessarily the hard part. It's keeping it going.

When you start an agency, you've got nothing to feed but yourself. You resign yourself to taking a hit in the pocketbook for a while. You use an old door and some milk crates for a desk. It's fine.

Then you work your ass off, do great work, hire great people, get an office and have bills to pay. That's right about the time that you realize business is is cyclical and there are going to be months when there's no revenue coming in.

It took me years of stress to understand that and it was liberating when I did. That's because cycles come back up, so I was able to embrace the slowdowns as my business got more and more established, knowing there would be an upswing a month or two down the road.

So, that's my advice to add to the article. Keep your eye on the big picture. You can't ignore the day-to-day of course, but there's some challenges you'll face no matter what. Be ready for them.

Oh, and be prepared to work your ass off.