How to organize an advertising business. How to open an advertising agency from scratch in your city

Approximate data:

• Monthly income – 280,000 rubles.
• Net profit – 67,830 rubles.
• Initial costs – 414,800 rubles.
• Payback – from 7 months.

This business plan, like all others in the section, contains calculations of average prices, which may differ in your case. Therefore, we recommend that you make calculations for your business individually.

In this article we will draw up a detailed business plan for an advertising agency with calculations.

Description of service

Providing advertising services for various companies. The work will include consulting, selection of a suitable advertising strategy, risk assessment, and the actual provision of advertising services (creation of the necessary accompanying elements such as leaflets, as well as their distribution). Please note that we are considering a situation where an entrepreneur opens a small advertising agency.

Market analysis

The market for advertising services is quite large and is constantly expanding. How can you characterize it? The demand for services is constantly growing, and so is the volume of work provided. There is no seasonality in this type of business if we evaluate the entire sector. Seasonality of enterprises applying for advertising has little impact on work. The bulk of the market seeks advertising services on an ongoing basis.

Today, this market segment is the most promising among all available services. The success of almost any business today depends on advertising. Thus, we can talk about a high level of demand.

The advertising agency market is no more than half full. Therefore, entering the market is quite easy. In this type of business, it is very important to show flexibility, ingenuity, and creativity. The ideal option would be for the company to be headed by an experienced, knowledgeable person working in this field. It is difficult to regulate work in a niche about which an entrepreneur has no knowledge. At first, he can himself participate in the development of advertising campaigns.

The most difficult thing in this area is capturing part of the market. Today there are many advertising agencies. In addition, well-known media occupy more than a third of the market, which significantly affects the number of “free buyers.” The main competitors will be large companies engaged in both providing a wide range of advertising services and processing highly specialized market segments.

How can you fight such serious competitors? It’s worth being creative when developing your own ideas. Make special efforts when preparing proposals. The success of the business will depend on their quality. A low price is unlikely to attract large clients, but you shouldn’t inflate it either. The ideal option is to set the average market price or slightly lower.

All existing companies will be potential buyers. Today, the success of an enterprise directly depends on product promotion. It’s not for nothing that they say that advertising is the engine of trade. When choosing a mid-price segment, you must understand that the main clients will be small and medium-sized companies. Large enterprises, as a rule, turn to well-known advertising agencies. It will be very difficult to catch such a “fish”.

SWOT analysis

1. Possibilities

• Changes in advertising technologies, the emergence of new ways to promote the client’s product.
• Wide range of suppliers.
• Possibility of rapid and low-cost expansion of services provided.
• Prerequisites for the development of the information industry.
• High level of differentiation in this business sector.

1. Threats

• A sharp change in the preferences of the service consumer.
• High level of competition.
• Price fluctuations.
• An increase in the number of unemployed, a decrease in business activity and, as a result, a decrease in demand for the service.
• There may be an increase in legislative restrictions and tightening of legal aspects in this industry.

There are a number of factors that the enterprise itself can influence. They are called internal. These include:

1. Strengths

• Opportunity to offer clients exclusive services.
• In-depth analysis of the market situation.
• Offering a wide range of services.
• Quality services.
• Clear advertising policy.
• Low cost.
• Possibility of developing a system of discounts, gifts, promotions.

1. Weak sides

• Lack of reputation, unknown company.
• Lack of experience in this area.
• Possible downtime due to delays in the supply of materials.
• Weak motivation.
• Lack of qualified workers, long search for them.

Opportunity Assessment

As mentioned above, the seasonality of individual enterprises has virtually no effect on the advertising agency. It can always find clients who need this service. Therefore, work will proceed as usual at any time of the year.

The organization will have a 5-day work week. The work schedule will be as follows:

Total: 40 hours per week.

This mode of operation does not violate labor laws. You don’t have to make up shifts, arrange part-time jobs, or pay overtime. One team will work as a single whole.

You can start working by hiring a minimum number of people. To provide a full range of services, the following specialists will be needed:

• manager;
• marketer;
• artist (aka designer);
• computer technology specialist;
• operator;
• Poster of advertisements.

Each of them will perform their functions and receive a certain salary.

The company will seek some services from other organizations (printing posters, banners, advertising in the media). The client will receive the final service. Once the company has developed, you can think about expansion. For example, about creating your own workshop for outdoor advertising or souvenirs.

Organizational and legal aspects

1. First you need to register your company. This could be an individual entrepreneur or an LLC. OKVED codes for this type of activity will be as follows:

• 40 – Advertising activities
• 13 — Research of market conditions and identification of public opinion
• 81 – Activities in the field of photography
• 22 — Printing execution of advertising materials
• 25 — Other printing activities
• 40 – Activities of news agencies
• 20 — Activities in the field of radio broadcasting and television

You don't necessarily need all of these codes. First you need to decide on the range of services provided. There may be other OKVED codes; the most basic ones are listed here. Please note that here are new codes that will be valid from 2016.

1. No licenses or patents to obtain not required.
2. If you turn to the All-Russian Classifier of Services to the Population (OKUN), you can see that advertising services belong to “Other Services”. An entrepreneur can calculate and pay UTII or simplified tax system. The second tax is possible in two versions - simplified tax system “Income” 6% or simplified tax system “income minus expenses” 6-15% (the rate is determined depending on the region).
3. To work with cashless payments, it is necessary.
4. Familiarize yourself with local laws governing the work of advertising agencies, as well as the procedure for providing services.
5. Placing advertisements in some public places requires permission to carry out this activity from the owner (for example, posting in elevators).
6. Notify Rospotrebnadzor about the start of your activities in order to avoid unpleasant moments.
7. Bring the premises into compliance with all standards developed by the fire department.
8. Remember that work on the simplified tax system can only begin after registering a cash register with the tax authorities. With UTII, KKM is optional.
9. Get a stamp with your own logo to sign contracts with your clients.
10. remember, that the lease agreement must be official.

When choosing a location, you need to decide what functions the office will perform. If you will meet with clients on their or neutral territory, then you can choose a budget option. Otherwise, you should look for an office in an accessible part of the city.

In any case, it is necessary to bring the room back to normal. The office must be respectable.

Marketing plan

The main components of the marketing strategy will be:

• Using an integrated approach. This means that all intermediate actions are carried out by the company, including planning, market assessment, creation of printed products, work on the Internet and much more.
• Focus on medium and small enterprises.
• Offer average prices.
• High level of service provided.
• Advertising your own products (working through all stages).

Since the organization provides advertising services, there is no need to go anywhere to promote your own business. You can do this yourself. However, there will be costs here too. You will have to spend money on raw materials, various materials, as well as on placing contextual advertising on the Internet. The development and content of the site will be handled by .

• Own website. Your employee can work it out. It is important to create a website that is understandable and pleasant for visitors. It is imperative to update information, inform about promotions and discounts. It makes sense to share your successes with site visitors by posting photos, reviews, and video reports.
• Internet advertising. An important aspect, since many legal entities are looking for advertising agencies via the Internet. You can negotiate advertising with organizations that provide related services or those who are focused on working specifically with legal entities.
• Distribution of offers, prices. This can also be done by an employee of the organization, namely a manager. He can also collect information about organizations, their contact details, and conduct negotiations.
• Advertising in the media. This is also a fairly effective method. It is best to contact local television, shoot an interesting, catchy video and put it on the air. Radio advertising is also great. You can send a ready-made advertising layout to newspapers or magazines, paying only for placement.

You can include other methods in your advertising campaign. But it’s still not worth posting cheap advertisements. It’s better to go around to potential clients yourself, leave them your offers, business cards, and perhaps talk to the people responsible for advertising. But there is no need to be intrusive either.

Calculation of projected income

In the first months, revenue will be small. It all depends on the activity of employees and the number of attracted clients. We calculated average monthly revenue for the first year.

We will make calculations assuming 59-60% load. Then the income will be 280,000 rubles.

Production plan

The office will require minor renovations to operate. Some landlords rent out excellent premises, already furnished.

The equipment includes the cost of purchasing specific devices. Namely:

• Set for printing and presentations.
• Photo and video equipment.

Office equipment includes 3 computers and an MFP.

The furniture you will need is as follows:

• chairs;
• tables;
• cabinets;
• chairs for clients.

Job title	The number of employees	Type of salary	Total:
manager	1	salary (10,000) +5%	24,000 rubles
marketer	1	salary (12,000) +5.5%	27,400 rubles
artist (aka designer)	1	salary (12,000) +7%	31,600 rubles
computer specialist	1	salary (14,000) +6.5%	32,200 rubles
operator	1	salary	20,000 rubles
advertisement poster	1	salary	18,000 rubles
Total:	6	salary (5,000) +	153,200 rubles

Total wage costs – 153,200 rubles.

I would like to note that the manager partially performs the duties of a secretary. Makes calls and answers phone calls. He is also actively looking for clients and maintaining a database.

The marketer conducts market research, identifies the most effective methods of advertising, and, together with the manager, draws up a plan for further action.

The artist is engaged in the development of layouts and layout.

A computer technology specialist works with graphics, photo and video editors. He is also involved in developing the site and filling it out.

The operator is engaged in printing the necessary attributes. If necessary, negotiates with other companies to provide support services.

Organizational plan

Financial plan

Monthly revenue is: 280,000 rubles.

Initial costs: 414,800 rubles.

• Profit before tax: 79,800 rubles.
• Tax: 11,970 rubles. We calculated the simplified tax system (15% of the difference between income and expenses). Other calculation methods can also be used.
• Net profit: 67,830 rubles.
• Profitability: 24.23%.
• Payback: from 7 months.

Risks

As you know, all risks can be minimized or avoided, regardless of whether they are internal or external. Let's consider the most important of them, and analyze methods of struggle.

Risk name	Negative impact on business	Ways to avoid
Changes in the economic situation in the country	Declining demand and subsequent reduction in profits	Active work in the field of forecasting and planning of own work.
Changing consumer preferences
Capture of a large market share by competitors		Studying the policies of competitors, tracking their work and successes. Using forecasting regarding their future actions.
Dumping policy from competitors
Changes in legislation, regulations		Mandatory study of all current acts. Monitoring the situation happening in the country. This needs to be done not only at the level of adopted legislative acts, but also at the level of draft laws.
Lack of employee motivation, unwillingness to work	Decrease in efficiency, decline in production volumes, sharp decline in the profitability of the enterprise and its profitability	Offer adequate wages. Working with employees, providing feedback to them (studying their desires, preferences and requirements). Creating a psychologically favorable environment in the team.
Client insolvency	Sharp deterioration in financial situation	A thorough study of the situation in the customer’s company before concluding a contract. Development of agreements that ensure security. Development of an advance payment clause.
Exposure to the elements, fires	Unforeseen costs, downtime, property damage	Insurance of this type of risk, their preliminary assessment.
Possible failure to fulfill one's own obligations to clients	Decrease in profits due to the allocation of funds for the payment of penalties and increased costs	Contacting insurance companies to obtain bonds (guarantees).

Important: Remember that you can independently create a business plan specifically for your business. To do this, read the articles:

One last request: We are all human and can make mistakes, leave something out, etc. Do not judge strictly if this business plan or others in the section seem incomplete to you. If you have experience in this or that activity or you see a flaw and can add to the article, please let me know in the comments! This is the only way we can jointly make business plans more complete, detailed and up-to-date. Thank you for your attention!

Small advertising agencies (2-3 people) engaged in intermediary services rarely manage to survive in the market among confident competitors (large advertising agencies). Therefore, for a more stable business, you should think about introducing your own individual product. Namely: to develop a unique trademark, corporate identity, BTL, event marketing.

How to open an advertising agency

Search for premises

By and large, the appearance of the premises is not of great importance for an advertising agency, since basically the essence of the work will consist only of telephone conversations and some paper movements. But if you want to impress your partners (after all, sometimes they still come for face-to-face negotiations), then you should take care of a decent office.

Office equipment

The most necessary things you need to operate an advertising agency are a computer, a scanner, a printer, and a copy machine. Emphasize technology for the creative and technical designer. Their PCs must be equipped with professional software to perform quality work. Next, you should take care of multi-line telephone numbers, local network and Internet.

Search for colleagues

1. Two sellers;
2. Two designers;
3. Creative concept specialist (creator);
4. Media buying professional;
5. Director.

For unique and rarer work, involve freelancers, since a full-time creative over time begins to work according to a cliché, losing the spirit of fantasy, and due to the specifics of an advertising agency, fresh, ingenious ideas are needed and templates are unacceptable. As for sales managers, their salary usually consists of a salary and a percentage for attracting clients. The premium will depend on the profitability and scale of orders.

Another type of advertising business device

If your business is aimed at creating a unique corporate identity for an advertising agency, then in this case it will be relevant to cooperate only with freelancers. And for permanent work, hire only managerial employees - executive director, art director, creative director, who will be involved in the implementation and generation of ideas.

Promotion of services

Connections, connections and more connections! It will be beneficial for you to hire a “well-connected” employee. In this case, it will provide the advertising agency with a flow of orders (up to 70%). Dedicate the first year of work to developing a portfolio and reputation, focus on medium and small businesses. Specialized media directories can serve as a means for an advertising agency’s own promotion. Such publications are often used by small companies to search for advertising.

Direct selling is good when your company provides a unique service, but in other cases direct selling tends to be aggressive.

Agency payback

Creativity is the main condition for the successful work of an advertising agency, that is, the development of extraordinary logos, banners, and unique markets. This will bring 40% success.

The price for your services will depend on the client himself and on your acting abilities. After all, roughly speaking, you are selling air, and the price can be set completely different. Everyone is jealous of you.

Small advertising agencies ask for approximately the following fee for their services: logo creation from 30,000 rubles, corporate identity – from 70,000 rubles, script – from 12,000 rubles. Placement of an advertising market in a magazine - from 12,000 rubles, original market - from 25,000 rubles, billboard market - from 8,000 rubles. These are approximate prices and do not have an upper limit.

In the early stages, do not neglect small orders. Such deals will strengthen your reputation and build relationships with businesses. Try to establish connections with sales directors, because it often happens that the price list lists a 15% discount, and after personal positive contact with the sales director you can get a 25% discount.

The larger the advertising budget, the more profitable the client is for the office. Therefore, large advertising agencies receive large budgets and it is difficult for small ones to compete with them. The profitability from small orders does not exceed 20-25%, while from large ones it is about 40%.

And lastly, for a successful and profitable activity, you will first need to work “thank you” as a mass entertainer, amateur – creative, secure a good reputation, acquire a clientele, and only after that you can try to become a businessman and earn money from an advertising agency.

Thomas Macaulay

Life is a series of choices. Every day you are faced with some situations that require you to make a certain decision. But one day you will have to make the most important and difficult decision - to decide on your choice in life. We all remember Russian fairy tales and their heroes standing in front of a stone on a crossroad. They had to choose a path that would lose the least. This situation is not suitable for us. You need to choose this path to gain as much as possible.

And then you start to wonder what to do with it? Go work for your uncle and spend your whole life sitting in an office without real prospects, looking at the world through a computer screen, or start your own business, which will bring joy and give you financial freedom and independence. It is clear that many people dream of starting their own business, achieving a level of profit where all their dreams and desires can be realized without unnecessary worries. Continuing our series of articles “Business Ideas for Beginners,” we decided to talk about how to open an advertising agency from scratch, or with minimal investment. Believe me, 90% of any business does not require money to start, or the costs will be minimal, each of you can do it.

We recommend reading:

So, if you are interested in this topic, if you have decided to open your own advertising agency, if you are planning to draw up a business plan for an advertising agency, but do not know where to start, then we will help you. In this article we will reveal many aspects of the advertising business, give advice for beginners, and focus on those points that should not be overlooked in the initial stages of your company. After reading the article to the end, you will understand what an advertising agency is and how to open one without major investments.

When drawing up a business plan for a new advertising agency, do not be afraid of competition

Someone may have thought about an advertising agency as an opportunity for their own business, but decided to abandon this idea due to the high competition and saturation of the advertising market. But have you ever wondered why there is so much advertising around: the Internet, newspapers, TV, radio, outdoor advertising, various mailings, flyers, leaflets, business cards? As they say, if there is demand, there will be supply. Surprisingly, 98% of all business is built on buying and selling. And to function properly, they need advertising, a lot of advertising, a lot of high-quality advertising. And the one who gives it will always be provided with profit. Greater competition in the advertising business is most likely a plus rather than a minus. You can always study the activities of your competitors, understand their working methods, draw certain conclusions, and look at the market reaction. You can also find a niche in which no one offers their services, or these services are not in favor. For example, it is no longer a secret that the Internet is much more effective than other types of advertising. But many advertising agencies stubbornly ignore it, or pay very little attention to the Internet. They focus on the “last century” - newspapers, magazines, leaflets. Break into the market with new offers, tell us about the advantages of online advertising, show its effectiveness, and occupy a free niche.

We recommend reading:

The main thing is to believe in yourself and not be afraid to start a new business. Remember that the advertising business is creativity, and even a beginner who has been working for only a few months, but offering non-standard advertising solutions, can significantly displace the “local bison” who uses old ways of promoting clients’ goods and services.

When opening an advertising agency, you need to decide on the main niche

There are many articles on the Internet that tell you how to open an advertising agency and create a good business plan. But many articles are very far from reality, or were written by those who only saw advertising on TV.

“Experienced gurus” advise starting an advertising business by selling billboards. Undoubtedly, this type of advertising is in great demand, especially in large cities. But this market is filled to capacity, especially since placing your own beat board is not so easy. You will face hundreds of difficulties, go through dozens of bureaucratic procedures, pay more than one bribe, and it is not a fact that you will get a fishing spot for your advertising space. It's worth it? I don’t want to make a huge investment in a niche that is already filled. You need to look for advertising methods that can pay off without huge investments.

The first thing you need to do is find a dozen advertising agencies in your city. Take their price lists, watch presentations, analyze their field of activity. You can even go to the offices, talk to the manager, find out what they offer and how they will distribute your advertising budget. All this will give food for thought. You can find the pros and cons, identify niches that are filled to capacity, and find those in which you can “shoot” well. We advise you to pay attention to advertising on the Internet, adding a special clause regarding social networks. Everyone understands that social networks are a huge area for advertising, but very few know what and how to do there. You can charge a certain percentage for creating the right advertising on social networks, or promote a product or service through public pages and groups, focusing on the target audience. It all depends on you, your knowledge, capabilities and desires.

We recommend reading:

So, the first thing you must do is decide on the main niche, so to speak, choose a feature for yourself. Don’t go where there is a lot of competition and serious investments are needed. Analyze, calculate, choose the optimal solution. You also need to understand that the advertising business is an integrated approach to any customer task. You cannot limit yourself to advertising on the Internet and do nothing else. You can offer comprehensive solutions - online advertising, outdoor advertising, flyers and business cards, while always focusing on your core area of ​​activity.

The basis of the advertising business is clients

Many beginners who want to open an advertising agency are intimidated by the mere thought of where and how to get clients. Yes, the customer is your bread, your financial stability, your Caribbean vacation, Goa, and delicious cocktails by the sea. To be honest, finding clients is not that difficult. Everyone wants one thing from advertising - a response. If you are honest with the customer, create a transparent monitoring system, give advice, and conduct regular analysis together, then people will flock to you like a river.

Well, think for yourself, what effect does hitting the board bring? There may be benefits from it, but how can you find out about it? The client has spent thousands of rubles on advertising, and has no idea whether it works, or the ad in a free newspaper.

• Give the customer a clear understanding that he will be able to control the effectiveness of the advertising, and if it is below a certain indicator, he will be able to get his money back. Money back works amazingly. But when making such an offer, you must understand that there will be a response. You must be confident in your strength and the effectiveness of your advertising.
• Show examples of advertising that works and its effectiveness. Outline how much money the other customer invested, and how many effective responses he received. Your proposal should not be based on mythical numbers, possible results, and probable indicators. Always give clear numbers, backing them up with a real advertising project.
• Reporting is another important component of your presentation. Discuss with the customer the period during which you will together analyze the effectiveness of a particular advertising campaign. A person who has invested money in you and your promotion methods must understand what is moving and how, what results he gets. Give him some control, but always play the game.

We recommend reading:

Please note that these tips are not for those who want to sell air for the price of gold. Modern advertising business should be built on efficiency and clear indicators. If you want to earn hundreds, or even millions, of rubles a month, then you will have to not waste your time on small fish, but try to immediately catch a whale in your net. No serious company will work with you if you do not show results. Conversion, response, calls, orders - this is the basis of your advertising activities.

Where can you find clients?

Remember that your feet will feed you, especially in the initial stages of developing an advertising agency. You will have to hold hundreds of meetings, presentations, talk about the advantages of your company, and your methods of promoting services and products. It won't be easy, it won't be easy. If out of 100 presentations at least 2-3 are successful, then this is a victory. To begin with, you need to implement a dozen advertising campaigns, and then everything will go as usual. You will have experience, portfolio, recommendations. People will recommend you to others and people will know about you.

Approach everything creatively. Give people something new, unusual, catchy. If you offer advertising on the radio or in newspapers, then who needs it. There are dozens of other agencies that have been selling this for years, and will most likely order from them. You must be radically different and offer something unusual, but effective.

Advertising agency expenses and income

If you decide to draw up a business plan for an advertising agency, you will definitely come across a column of expenses and potential income. Not everything is as simple as it might seem. Costs depend on your initial capabilities. You can rent a beautiful office in the city center, furnish it with office equipment, print out expensive business cards, hire professional workers, or you can not do all this. The result in both cases can be the same. In the advertising business, a lot depends on your creativity and presentation. You don’t have to invest a penny at all in the start-up, but then development will take a little longer than you imagine. If you are already drawing up a business plan for an advertising agency and listing expenses, then you need to consider the following:

• The office is an important component. It should not be big, but as comfortable as possible. It is better to rent a room of 15-20 square meters, but decorate it properly. A person entering your office should think that creative and interesting people work here.
• Next you need to buy computers, laptops, printers and copiers. In general, computer equipment will be a separate cost column. Without it, a modern advertising agency will not be able to function.

We recommend reading:

• As we have already written, presentations are an important component. For maximum effect, you need to use all technical developments. You can buy several tablets, which will be from the heads of the companies to whom you are giving a presentation. It’s also a good idea to have a projector to broadcast your work on the big screen. The first impression is very important, and it will not be very good if you conduct the presentation “on your fingers”, stuttering and trying to explain something.
• Payment for staff work. This is not the main expense column. You can open an advertising agency without hired workers. If everything is so bad, then start working alone, and in the process of development, take people with you. You can open a business with someone by finding like-minded people.

If you think about it this way, then the costs are minimal. The main thing is the office. Everyone has their own laptop, and you can work with them at first. Printers and copiers are not that expensive now, and this should not be a problem.

Our advice is to analyze foreign experience. See what ideas are being implemented in Europe and the USA, how they do it, what approach they use. Many advertising tricks come from the West. You must always be one step ahead of the competition by offering your clients more and more ways to increase their income.

Advertising in Russia today is one of the most popular areas of business. Creative, brave and non-trivial individuals who understand fashion trends and human souls are entering this industry. Despite the fact that the lion's share of the work of advertisers is to perform complex calculations, many of them fail to open an advertising agency from scratch, as unforeseen problems arise that were not suspected at the very beginning.

Let's try to figure out together what an advertising agency is, why it is needed and how to build a successful advertising business with minimal investment.

• universal;
• highly specialized.

In the first case, the word universal means that the organization provides a wide range of advertising services, and can also affect the field of PR or marketing, in general, everything that the client’s heart desires.

In the second, the organization is engaged only in the activities of one of the few advertising areas, and this is the main profile of its activities. Such an organization could be:

• creative agencies;
• organizing the purchase of time or space in the media;
• working for an audience of a certain age, status, etc.;
• specializing in a specific industry (for example, medicine or IT technology);
• those who prefer to work with a specific type of advertising (television, radio, outdoor, etc.).

1. The organization has advertising space and is engaged in issuing them for rent.
2. The organization produces various structures containing advertising, for example, billboards, stands, etc.
3. The agency distributes advertising online (develops Internet pages, promotes resources).
4. Implements a wide range of advertising opportunities;
5. Promotes the goods and services of the client company.

In addition to the types listed above, there are all sorts of mixed varieties, but we have listed the main ones. You can open any of them either from scratch or with an investment of capital. Of course, the second method seems better, but in reality, without the proper skills, you can fail in both cases, which means you can lose not only the effort expended, but also your capital.

What role do advertising agencies play in the development of modern business?

In fact, running an advertising agency is quite expensive. That is why not every company can afford to include this division in the organizational system. In essence, it is like holding another independent organization on the basis of the organization. That is why the work of third-party advertising organizations is so relevant and attractive, because it consists of employees with a creative view of things, a special mindset, who can look into the soul of not just one person, but an entire segment of the population at once. In addition to advertising work to promote products, a business also needs PR support from outside in order to build not only active sales, but also a strong reputation.

The advertising process is based on identifying and working with the target audience - the mentioned segment of society that potentially consumes the product of the customer company, by disseminating information about the product, developing interest in it and increasing the level of final popularity.

The feasibility of opening an advertising agency and the difficulties encountered

Even if you have a seemingly ideal plan for creating an advertising agency in your head, pay attention to the statistics. Every day a new advertising agency opens in Russia, the organizers of which believe in success. However, after a year, or at best two or three, most of them fail and close forever. Such a high percentage of defeats in the advertising field can be determined as follows.

1. Serious competition. The field of advertising business is not so new today. In addition to the advertising giants, whose work is no longer carried out at the regional, but at the federal level, each more or less large city already has its own advertising leader and companies vying for his place. They have all existed for many years and overcoming them, as well as newcomers like you in the advertising world, is not an easy task.
2. Location of the future agency. Simply put, the size of the city within which you are eager to start a business. It is completely unprofitable to open an agency in cities of various regions that do not reach at least 1 million inhabitants, since otherwise they already have their own “king of the hill”, and the main income will continue to come to him, due to the small number of orders and the experience of the above-mentioned leader in the field of advertising. After all, the customer reasons like this: “why pay the same price to an unknown company when you can turn to a contractor with 10 years of experience?”
3. Complete absence of investments. Of course, you can start and develop a successful business from scratch, however, this deprives the enterprise of any advantage. Your advertising aimed at your own business can be so creative that it will make potential customers run to your office and not notice that it is located in the farthest corner of the building and there is no air conditioning inside. However, only geniuses or lucky ones manage to amaze the public right away. If you are not one of them, not making even the minimum investment will have a bad impact on your business.
4. Lack of established customer base. It often happens that an advertising agency is opened by people who worked “for their uncle” in such an organization. They might not be satisfied with the conditions, the lack of appreciation of their talent, or the low salary, so they packed up their things, took the established base of clients with whom they worked, and went free. This is an almost utopian case, because usually things are the other way around: there is no experience, no base of people, but only a great desire to create in the world of advertising.
5. The triviality of the advertising produced. This complexity is not of a technical nature, but rather of a creative nature. The fact is that the consumer is fed up with advertising of all kinds, it is difficult to surprise him. Only a truly creative advertiser will be able to awaken people’s imagination and force attention.

1. Availability of a starting (small) customer base or potential clients makes a significant difference. One satisfied organization will pass news about you to another and gradually the list of customers will increase to an acceptable level and the agency will be in relative safety.
2. Low competition. This option is utopian, but there are cities with a fairly large population and the absence of decent advertising agencies. In 2015-2017, the cities of Crimea, which was recently annexed to Russia, ideally fit this description. Business on the peninsula was of no interest to anyone until huge masses of people from Donetsk moved there, and those moving from the mainland to be closer to the warmth. The advertising niche is still unoccupied in some cities and you can compete for it.
3. Locality size. Who in their right mind would open an advertising agency in urban settlements, villages and small towns? That’s right, no one, due to the lack of advertising customers, and as a result, profit. But if the location of the organization being opened is a large city, the chances of success increase significantly.
4. Availability of a creative team. All activities of any enterprise depend on the team, its professionalism and literacy. This also applies to an advertising agency. It is simply impossible to open such an organization without creative geniuses. It will do if there are only two people, but if there are none, the business will burn out.

Having considered all the dangers and opportunities of opening an advertising business, let’s talk more specifically about what investments and actions will need to be made to achieve success.

Video - What you need to start an advertising agency

Assembling a team

As already mentioned, the team is almost the most important aspect for the favorable growth and development of an advertising organization. If all the right people are in place, the appearance of clients and first profits will not take long.

The team may not be complete at first, but ideally you should have the following employees:

• designer (better than two);
• creative;
• organizational manager;
• director.

For which aspects of activity each employee is responsible, see the table below.

Table 1. Areas of responsibility of advertising agency employees

Creative	Designer	Organizational Affairs Manager	Director
listening to customer wishes and developing a set of ideas.	visualization of ideas proposed by creatives by hand and in graphic editors.	finds ways to reproduce advertising products or services (for example, enters into contracts with printing houses).	is responsible for process control; funding distribution; determines ways of further development, etc.

Each of the listed employees needs to be paid a salary, so remember all the criteria under which an investment in hiring staff will pay off:

• if you have a specialized basic or at least additional education;
• communication skills;
• ability to work in a team;
• ability to distribute tasks according to importance.

Intuitively, you can choose a few abnormal people for positions who speak about their field of activity with aspiration. Such people themselves will not perish, and they will not let your common cause perish.

In addition to the permanent team, it is necessary over time to develop a base of temporary employees working on all sorts of projects, distributing leaflets, demonstrating the company’s product to consumers, etc. The selection of participants is carried out as a result of a casting, which is necessarily attended by the main responsible person - the director.

Necessary props and premises for the first time

The office doesn't have to be big. Zoning the workspace of employees and refusing to allocate a separate office to the agency director can solve the problem.

In principle, an advertising agency can easily spend its formation period, as well as its subsequent long life, in a small office. It is desirable that it be divided into two or three, ideally four rooms, serving the following purposes:

• room with a projector for presentations and negotiations;
• director's office;
• design office;
• office of the rest of the employees.

Additionally, it will be great to have a warehouse in which to store props prepared for use at various promotions and events.

If there are not enough funds to rent a four-room office, it is more rational to save not on offices for employees, but on the director’s room, since it is he who is interested in seeing the business burn out.

According to the recommendations, the square footage of the room should not be less than 40 units. The ideal rental price is no more than 30 thousand rubles, but we all understand that such a price today is only possible in small regional cities. A tactically advantageous office location is the central or business district of the city, where the business environment reigns. This way, you place the agency right in front of potential customers, and the cost of renting the premises will pay for itself.

Profitable advertising activities and agency specialization

Depending on the dominant business situation in the city where the agency is located, the main type of advertising activity is selected. So, for example, if the bulk of business enterprises do business within the region, turn your attention to radio and television advertising, but if only within the city, it is most reasonable to limit yourself to the development of promotions and outdoor advertising.

According to statistics, the advertising segment is in greatest demand among advertising agencies. BTL, which stands for “below the line.” This part of the advertising process refers to direct marketing - all non-traditional ways to influence the consumer here and now, for example, promotions, events, and so on. The advantage of BTL is its low cost and precise spontaneous impact on the buyer. It is this activity that will bring the advertising agency a significant percentage of its total income.

Segment advertising ATL(above the line), which contains mass traditional methods of influencing the audience, costs much more and is used only by large business organizations. Medium and small enterprises prefer only outdoor advertising from ATL funds, which they can afford.

According to recent trends, the main creative efforts of agency personnel to make a profit should be concentrated on:

• working with email newsletters;
• organizations of trade events and corporate events (fairs, exhibitions, conferences, corporate parties, etc.);
• Viral marketing;
• PR work with the target audience of the customer company;
• Promotions;
• Online advertising (including SEO).

Costs of opening an agency

So, we come to the most important aspect - the costs that will have to be overcome in order to organize a successful advertising agency. Let's consider each direction in order.

Agency registration

Let's look at the table of costs for self-registration of a limited liability company.

Table 2. Costs for self-registration of an LLC

Cost item	approximate cost
Costs for the company's authorized capital	The minimum that can be the authorized capital starts at 10 thousand. Contribution is required in the form of money; replacing capital with property of the same value is prohibited by law.
Investments in organizing a legal address	On average, the cost of this procedure is 5 thousand rubles, but can reach up to 20 thousand.
Cost of notary services	This column implies payment for the work of a notary; in 2017, its cost reaches a maximum of 1.3 thousand rubles.
Payment of state duty due to LLC registration	The state duty is 4 thousand rubles and must be paid.
Production of customized printing	The cost of the service is no more than 1 thousand rubles.
Organization of a bank account	The price for opening a current account is no more than 2 thousand rubles

In this table we have presented you with the maximum possible amounts that some entrepreneurs spend on organizing an LLC, however, do not be alarmed, on average the amount never exceeds 20 thousand rubles.

Find out everything about how to open a legal entity yourself from our articles. In the publications “” and “” you will find detailed step-by-step instructions for opening a legal entity, a list of necessary documents and their samples for downloading.

Office rental

As mentioned above, the cost of renting an office will differ depending on the size of the city where the agency is located. We present a table containing information on prices for renting offices measuring 40 square meters or more, for one month, in the business districts of some cities for 2017.

Table 3. Prices for renting offices from 40 m² per month

The average rental amount including utilities will be about 35 thousand. If we are talking about Moscow - much more, but we are still calculating options for smaller cities.

Salary to employees

We will calculate the minimum wage for the minimum number of employees. So, since the team we have designed has at least four people, each of them must receive a salary of about 10 thousand rubles, otherwise they simply will not want to come to work for you. In addition to the salary, employees are paid a percentage of closed transactions, therefore, monthly payments per person at first are about 15 thousand rubles, which means 60 thousand for everyone.

An employee’s salary is an expense on which you can’t save money.

Office arrangement

In addition to renting an office, you need to spend a certain amount on purchasing equipment, such as:

• tables;
• chairs;
• projector (preferably);
• telephone;
• 1-2 computers (minimum).

All of the items listed above will work for the first time in used condition, since you need to open an agency with a minimum of costs. If desired, all the items described above can be collected for the amount of 100 thousand rubles, since the agency simply cannot do without productive equipment for designers.

Agency advertising

The agency's own advertising will consist primarily of creating a website. It’s good if one of your employees has web development skills, but if not, creating a simple website based on well-known platforms will cost about 10-25 thousand rubles minimum, including the purchase of a domain.

the total cost

Let's calculate the resulting costs:

• about 20 thousand will be spent on registering the agency as a limited liability company;
• 35 thousand were spent on renting premises in a strategically advantageous area of ​​the city;
• 60 thousand will be needed to pay salaries to employees in the first month;
• it will cost 100 thousand to equip the office with the necessary equipment;
• Agency advertising will cost approximately 25 thousand rubles.

In total, we got 240 thousand rubles. Even an ordinary store employee can accumulate such an amount in a few years if he dreams of opening his own agency, that is, the amount does not seem large. In modern realities, this amount fits the description of “from scratch”, since it is impossible to imagine lower costs. They can be reduced only in the following cases:

• if office equipment is borrowed from friends for free;
• members of the organization have web development skills;
• with incredible luck.

In all other cases, before opening your own advertising business, you will have to work hard and save the required amount.

What to count on

Now let’s discuss what you should expect at first when opening an advertising agency. First of all, you need to remember one golden rule, which sounds like “don’t miss a single client.” Even the most successful advertising venture will not receive dozens of orders from day one. The prices for the first orders should be set small if you expect that the customer will not run away and tell his friends about you. Yes, at first you won’t make money from this, but you can gain fame and develop an image, which is much more valuable than short-term profit.

It is profitable to work with young companies that are leaving the shadows and entering the market arena. No matter how small and insignificant it may seem, such work will allow you to gain experience in developing a brand book, logo and advertising in the media.

Often the agency will receive requests to place video advertisements on various services, for example, YouTube. It will not be expensive for the client to pay for such work, just as it will not be difficult for you to perform it. Orders for outdoor banner advertising will be popular. By processing such orders, the agency will engage in technical development, design and conclusion of contracts for the rental of space.

At first, promotions will bring big profits, since the development of even a small-scale event will result in 25 thousand rubles of net profit.

The services of designers are valued at the highest price, so at the initial stage there will be minimal demand, however, as the popularity of the organization increases, the situation will change, and they will begin to bring in money.

Video - How to open an advertising agency in the region

Let's sum it up

As you can see, the seemingly impossible task of creating your own advertising agency with minimal costs is not at all so unattainable. It is important to prepare for hard work and give your all to achieve your goals. The main thing is to clearly calculate each step and make a minimum of mistakes.

In the modern economic model, advertising, PR, and marketing occupy a prominent place. Not a single serious enterprise can do without advertising. This situation is unlikely to change in the near future. Which means advertising business has a future and it makes sense to invest in it. In addition, the advertising field of activity is very democratic. Here you can find both small advertising companies working “from scratch” and large agencies with huge budgets. You can start working in advertising without having any start-up capital at all..

Advertising business is the general name for the field of activity related to marketing. In general, it includes a fairly wide range of activities. Let's consider one by one what services relate to the advertising business, how this business is organized, how to open an advertising agency, give an idea of ​​the business plan of an advertising agency, and give an approximate calculation of income and expenses.

Advertising activity

Advertising is not the main link in human economic activity. It performs auxiliary functions in the economy. Although from the point of view of economic entities the advertising business is an independent sphere of production, it would be more logical to designate it as “business for business.” The attribution of a particular function to advertising is somewhat arbitrary.

• Informational. Bringing certain information to the target audience;
• Incentive. Formation of specified preferences among the target audience;
• Manipulative. Formation of specified desires among the target audience, bypassing consciousness;
• Image. Creating the required image.

• creation of advertising content;
• creation and promotion of advertising content;
• full advertising cycle.

Large investments and a team are not necessary to create advertising content. It is enough to have clients who need such content. The full cycle usually includes placement and analysis of an advertising campaign. This requires placement sites (media, billboards, etc.), various analytical tools (surveying agents, sales indicators, etc.).

Types of advertising

• Printing. All variety of printed products: booklets, leaflets, business cards, magazines, etc.;
• Outdoor advertising. Posters, signs, billboards, etc.;
• MASS MEDIA. Advertising in television, radio, newspapers;
• Internet. It stands out separately from the media, as it has its own specific characteristics;
• Agents. Conducting advertising campaigns with the involvement of distribution agents;
• Rhetoric. Organization of various lectures, conferences, presentations;
• Hiden advertisment. Advertising that takes place indirectly with any main event.

Characteristic features of the business

The advertising business in Russia is quite young and continues to develop. For a number of reasons, the formation of this business follows the formation of other areas of activity. Those. it develops mainly from requests and understanding of the need for advertising by the customer. An advertising agency thus has two types of target audiences: customers and an impact audience for the advertising content being created. This is one of the main distinctive features of business.

Target Audiences

In this regard, it is necessary to say a few words about target audiences. Target audiences for advertising content are quite diverse; they can be divided into broad and specific – aimed at a specific client.

• industrial enterprises;
• the shops;
• financial companies;
• political associations.

Types of advertising agencies

The division of advertising agencies is different and is based on an understanding of the goals of advertising activities. To start operating, you need to decide on the format of the advertising agency; the business plan must reflect the main key points of the planned enterprise. The format will determine costs, the approximate customer base of customers and further direction of development.

In this aspect, it is best to classify advertising agencies according to the following format:

1. Small advertising studios. These are studios that create custom advertising content, do not have platforms for posting this content and do not implement the full advertising cycle. Those. in fact, these are artists fulfilling orders according to clear technical specifications. In this case, there are no costs or additional specialists for placement, promotion and analysis of advertising. Also, such studios do not have much capacity to create high-budget advertising content;
2. Small advertising agencies. These are essentially the same studios in a wider format. In their services they include the entire range of promotion of fairly cheap advertising content. Those. There are platforms for advertising; some analysis of advertising services may be offered;
3. Full service advertising agencies. Agencies ready to offer a full range of services. It is possible that some of the services are delegated to various subcontractors - the same small advertising studios or specialized companies for creating advertising. They are characterized by significant costs for working with both types of target audiences.
4. Specialized companies. These could be large studios for creating videos, companies specializing in a certain type of advertising, for example, political, etc. The costs will be specific and the work will be highly specific with a specific audience.

Location and premises

For an advertising agency, location does not play a significant role. The main activities related to working with customers are carried out electronically or on the customer’s premises; in rare cases, work is carried out in the office of an advertising agency. Exceptions may include specialized firms. But even in these cases, location does not play a special role - the customer can visit the company anywhere.

Additional requirements are put forward for the premises if it is planned to carry out some work with the target audience in the office: meetings with the customer, advertising campaigns in the office (say, lectures). Premises for specialized companies have their own requirements. In both cases, everything is situational and the premises are designed depending on the specific implementation.

Equipment

The same can be said about equipment. It all depends on the format and specific implementations. Small advertising studios do not require complex, expensive equipment. This is usually one or more computerized workstations. As services expand, the equipment may include: powerful graphics stations, specialized equipment for printing, holography and other things.

Documentation

In our country, there is a practice of not purchasing licenses for some products, primarily for software products. If the advertising studio is very small and is not actively preparing commercials, then this situation may not lead to negative results. Large advertising companies sell advertising content created using a software product and must provide information on the legality of using the products they use.

Other documentation:

• package of constituent documentation (depending on the form of ownership, individual entrepreneur or joint-stock company);
• a package of external documentation (lease agreements, sublease agreements, contracts, agency agreements, etc.);
• package of internal documentation (organizational, analytical documentation);

Staff

The staff may include quite a few specialists:

• director;
• area managers;
• artist, designer;
• psychologist, sociologist.

Competition

In the sphere of smaller businesses and excluding a few of the largest metropolitan areas, the situation is somewhat simpler. True, demand and profitability are lower here. Among other things, small businesses are strongly influenced by the economic situation in the country. This is the area of ​​expenses that enterprises cut first.

Advertising agency marketing

Good advertising style is about creating advertising content that promotes the advertising agency itself. Advertising includes the same advertising that is the product being sold to the customer. Those. in this vein, it is easier for an advertising agency: it advertises itself with the same means that it subsequently sells (advertising in the media, on billboards, mailings, etc.).

Work with customers:

• system of bonuses and discounts;
• preferences for regular customers;
• working with agents.

Financial plan

The epilogue to an advertising agency’s business plan is the financial plan. It reflects the expenditure and revenue side, the achievement of profitability, and calculates the payback period for investments. Due to the wide variety, it is not possible to provide a standard financial plan. Here is a small calculation from an advertising agency.

Small advertising agency. Premises for rent 20 sq.m. Staff 3 people: director, 2 managers. Several platforms for posting advertising content. The agency creates advertising and places it, in particular on billboards.

Income. Judging the income of an advertising agency can be very conditional. So the price of placing on a billboard along a highway in one of the cities is 10 thousand rubles per month. We get it. From advertising on sites 50 - 80 thousand per month. Other advertising services 50 – 80 thousand per month. Total monthly income is 100 – 160 thousand rubles. Or profit: 15 – 20 thousand per month.

The payback period will be from one to one and a half years. Naturally, a very small agency in a small city was taken as an example; the factors of its further development, as well as changes in the external environment, were not taken into account.