If you’re going on holiday over the next two months its highly likely that you will spend at least a few minutes considering whether your current job is the right one for you and whether you need to take a new career direction. If one of the routes you are considering is starting an agency here are a few thoughts to consider while sipping a cold drink and gazing at the deep blue sea.
Surprise, surprise, you’re not the first person to have this idea and your new baby is being launched into a highly competitive market with every conceivable proposition on offer. So what do we have to do make sure that your plunge into the world of entrepreneurship is a success?
I’d recommend you start by considering the following six points:
Let’s start with you. Be honest about you personality and what you like doing and can’t abide. If you are not a completer finisher by nature make sure that you team up with a partner or that your first employee has an eye for detail and will dot the Is and cross the Ts for you. I’d strongly recommend that you don’t start up on your own. Even the most driven and tenacious owner manager can find the vagaries of consultancy life a bit over whelming at times. Having a trusted partner provides you someone to give you a lift after another failed pitch or difficult client meeting.
The next step is to have a very clear idea of what you are creating. Is it an agency that you will want to sell in the medium term or a business that will fund a good lifestyle for you until you retire or decide to do something else? Both of these are perfectly legitimate approaches but which one you choose will have a big impact on how you almost every facet of your plan including agency structure, recruitment strategy, your location and maybe even your proposition.
3. Raspberry ripple
Next is what you are going to sell and how you are going to differentiate yourself. The sector really doesn’t need another ‘vanilla agency’. But there is always room for a new firm with a proposition that firmly addresses an identified client need, supported by ‘sticky’ services that keep the fees flowing and make you invaluable to the client. You don’t have to be double chocolate with sprinkles but you do need to be raspberry ripple (Ok, I am old!). Be clear on why a prospective client would buy your agency over an established one. If you can’t come up with a good answer, with clear evidence to support it, then more work is needed.
Spend some time on your agency name. Ideally you want something that can be developed into a brand with all of the all associated benefits in terms of premium pricing and recruitment. Three of my favourites are Brands2Life, Man Bites Dog and Blue Rubicon.
The next step is to be absolutely crystal clear about who you will be selling to. Not every organisation in Europe is a prospect! The fastest growing agencies know who they want to work for and are methodical and tenacious in the pursuit of them. Having a pragmatic process for the identification, contact and pitching of prospects makes it part of everyday life within your start-up. And that what it has to be if you are to avoid periods of panic as you stare at an empty pipeline after a particularly busy period and wonder how you are going to pay the next month’s salary bill.
You also need to get the numbers right. It’s a bit of a cliché that lack of cash is the biggest killer of start-ups, but its spot on. While you are building your first profit and loss sheet make sure you do two versions. Your most ambitious one with your dream level fee growth and new employees, and one which halves the fee growth, delays new business wins by three months and doubles your overhead. If the numbers still stack up you are probably on to something. Make sure that you have robust cash flow reporting and that you are super careful in terms of financial commitments to offices. Agencies are hard to kill off – they just keep shrinking until the founder is working in their kitchen – but an unaffordable lease that has been signed for emotional rather than business reasons spells disaster.
Don’t let me put you off. Running your own agency, it is like nothing else and I’d recommend it, but do go in with your eyes wide open. Plans developed on a sun bed don’t always survive a wet Autumn morning at home.