A creative agency helps businesses decide on a branding strategy to present to the public. From logos to slogans to blog content, creative agencies give a company a strong and consistent voice that will appeal to its target demographic. While an advertising service aims to spread the name of a company by buying media space, a creative agency will provide the public face of the company’s values and mission. Creative agencies stimulate the local economy and support small businesses by giving their clients an edge in competitive industries.
Learn how to start your own Creative Agency and whether it is the right fit for you.
Start a creative agency by following these 10 steps:
Plan your Creative Agency
Form your Creative Agency into a Legal Entity
Register your Creative Agency for Taxes
Open a Business Bank Account & Credit Card
Set up Accounting for your Creative Agency
Get the Necessary Permits & Licenses for your Creative Agency
Get Creative Agency Insurance
Define your Creative Agency Brand
Create your Creative Agency Website
Set up your Business Phone System
We have put together this simple guide to starting your creative agency. These steps will ensure that your new business is well planned out, registered properly, and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
What will you name your business?
What are the startup and ongoing costs?
Who is your target market?
How much can you charge customers?
Luckily we have done a lot of this research for you.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Creative Agency Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
Your state’s business records
Federal and state trademark records
Social media platforms
Web domain availability.
It’s very important to secure your domain name before someone else does.
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What are the costs involved in opening a creative agency?
The money you spend is heavily dependent on the image you want to portray to your clients. Technically, much of the work can be done with laptops, a few co-founders, and a coffee shop. However, clients will be looking to work with agencies that have a professional look and feel. When holding meetings with clients, it may be helpful to have a dedicated office space.
Should you decide on an office, you’ll need a Certificate of Occupancy (CO). The price of this will vary based on where you open. The CO simply states that the office is safe for those inside and meets building standards, and can be obtained by the landlord owner should you choose to rent.
What are the ongoing expenses for a creative agency?
Owners should prepare for the following expenses:
New technology investments
Networking expenses (e.g., client lunches, etc)
Who is the target market?
The target market of a creative agency is any company that wants to improve its reputation, connect with customers, and boost sales. Generally (but not always), it’s small to medium businesses that hire creative agencies as they may not have the capital to hire full-time employees. Some creative agencies carve out a niche for themselves, such as only taking on food-related clients.
How does a creative agency make money?
Creative agencies may charge for their services with flat fees on a per-project basis. Creative agencies may also choose to charge by billable hours, where everyone involved in projects has their hourly rate. While fee-based projects may be more attractive to clients (because they’ll know immediately how their budget will be affected), billable hours eliminate the chances that the agency will underbid for a project.
How much can you charge customers?
It all depends on the scope of the project. Much of a creative agency’s billing is trial and error as companies determine just how much work it takes to finish a project. Creative agencies can charge as much as $5,000 a month.
How much profit can a creative agency make?
Because you’re not selling a product, you can keep the overhead low. With fifteen clients at an average of $2,000 a month, your agency could be pulling in as much as $25,000 a month (assuming an equal profit share.)
How can you make your business more profitable?
Creative agencies can expand by offering advertising services or different marketing services. For example, instead of simply creating the content, creative agencies may want to do public outreach events on behalf of the company.
STEP 2: Form a legal entity
The most common business structure types are sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your creative agency is sued.
FORM YOUR LLC
Read our Guide to Form Your Own LLC
Select Your State
Have a Professional Service Form your LLC for You
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You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to select a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
To register for taxes you will need to apply for an EIN. It’s really easy and free!
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You can acquire your EIN through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
Separates your assets from your company’s assets, which is necessary for personal asset protection.
Makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
Separate personal and business expenses by putting your business expenses all in one place.
Build your company’s credit history, which can be useful to raise money later on.
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Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a creative agency. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Creative agencies should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize the risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your creative agency when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on-call attorneys to get complimentary legal advice.
Certificate of Occupancy
A creative agency is generally run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws, and government regulations have been met.
If you plan to lease a location:
It is generally the landlord’s responsibility to obtain a CO.
Before leasing, confirm that your landlord has or can obtain a valid CO that applies to a creative agency.
After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
You will be responsible for obtaining a valid CO from a local government authority.
Review all building codes and zoning requirements for your business location to ensure your creative agency will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance to operate safely and lawfully. Business Insurance protects your company’s financial well-being in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.
Find out what types of insurance your Creative Agency needs and how much it will cost you by reading our guide Business Insurance for Creative Agency.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.
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Recommended: Get a logo using Truic’s free logo Generator no email or sign-up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a creative agency
Advertising in an agency generally comes in the form of online ads or even physical flyers. If you’re aiming for businesses around town, then you’ll need to establish a local presence by networking at local events. For more national campaigns, you’ll need to invest time and money in SEO tactics to start getting your name out. Until you can generate word-of-mouth business, being seen in search engine searches will be your best way to spark interest.
How to keep customers coming back
Creative agencies should be aiming to give companies a unifying theme when it comes to their marketing techniques. Keep clients coming back by presenting a strategy that they can implement in every department. Aim to increase the client’s revenue by increasing public awareness of their brand amongst their target demographic.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that make the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
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Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
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Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.
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What happens during a typical day at a creative agency?
Each creative agency will have its rhythm, but most will have the following basic duties:
Networking with potential clients
Creative duties (e.g., writing, drawing, etc.)
Pitching/selling relevant upgrades and new services
Completing brand books
Researching target demographics for clients
What are some skills and experiences that will help you build a successful creative agency?
It is not strictly necessary for owners to have any formal skills and experience, though it may be difficult to get started without them. An MBA or a marketing degree may give an owner a head start when it comes to building the business. Even ambiguous degrees like English, Art, or Psychology may be beneficial though, provided you also have some type of real-work experience in a marketing department.
What is the growth potential for a creative agency?
Creative agencies that prove their worth have a lot of room to grow — and small businesses can use all the help they can get. Creative agencies set themselves apart by showing their clients that their work is different, memorable, and effective at communicating a message to the public.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from the founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump-starting a creative agency?
The best advice successful owners give is to make sure you have something different to say. You need to convince the client that skimping on creative work is cheating the business rather than saving them money. Those in this business say that it’s far less about your official qualifications and facilities and far more about how you interact with clients and the ideas you present.
With every piece of new business won you want to push change whenever possible. Your goal is to find the integrity behind each new product and service of a company and tie that message into the rest of the branding. Also, be selective about who you choose to work with. You can’t benefit the local economy if you take on projects you’re uncomfortable or unfamiliar with. All clients you do take on should also be expected to sign a contract before beginning the work which states your company’s terms of business.
How and when to build a team
It is not recommended that you start a creative agency without at least a few core employees as you’ll need a variety of skills to round out the business. It also helps to have others to brainstorm with. Put together a small team to start with. You’re looking for those who share the same mission, but who have different talents that complement the rest of the team. You’ll also need someone organized to be able to take care of the more practical matters of business.