How to open a print advertising agency?
There's no doubt that starting a print advertising agency requires a lot of work, but with expert planning, you'll be well on your way to creating a profitable business venture.
This guide will give you a low down on all of the major steps involved, from choosing a legal structure to creating a financial forecast and registering your business.
We will also walk you through the process of checking whether or not your idea can be viable given market conditions.
Let's embark on this exciting journey together!
Learn how a print advertising agency works
Before you can start a print advertising agency, you need to have a solid understanding of how the business works and what are its main revenue streams.
This will give you a glimpse into the profitability potential of your venture, whilst allowing you to decide whether or not it is a good fit for your situation (current skill set, savings and capital available to start the business, and family responsibilities).
It may be that creating a print advertising agency is an excellent idea, but just not the right one for you.
Before starting their own company, successful entrepreneurs typically:
- Consult with and take advice from experienced print advertising agency owners
- Acquire hands-on experience by working in an operational print advertising agency
- Take relevant training courses
Let's explore each option in a bit more detail.
Consulting with and taking advice from experienced print advertising agency owners
Having "seen it all", established business owners can offer valuable insights and hands-on advice drawn from their own experiences.
This is because, through both successes and failures, they've gained a more informed and practical understanding of what it takes to build and sustain a successful print advertising agency over the long term.
Acquiring hands-on experience by working in an operational print advertising agency
If you want to open a print advertising agency, having industry-specific experience is imperative because it equips you with the knowledge, network, and acumen necessary to navigate challenges and make informed decisions critical to the success of your future business.
You'll also be able to judge whether or not this business idea is suitable for you or if there might be conflicts of interest with your personal life (for example, long working hours could be incompatible with raising young children).
This work experience will also help you to make contacts in the industry and familiarise yourself with customers and their expectations, which will prove invaluable when you set up your print advertising agency.
Take relevant training courses
Taking a training course is another way of familiarising yourself with the business model of your future activity before you decide to make the jump.
You may choose to complete a training course to obtain a certificate or degree, or just take online courses to acquire practical skills.
Before going any further in setting up your venture
Before you go any further with your plans to open a print advertising agency, make sure you have a clear vision of what it will take in terms of:
- What skills are needed to run the business successfully (do you have some or all of these skills?)
- What a standard working week looks like (does it suit your personal commitments?)
- What sales potential and long-term growth prospects the print advertising agency has (compare this with your level of ambition)
- What options you'll have once you decide to retire (or move on and inevitably sell the company)
This analysis of the business model and the constraints of the business should help you to check that your idea of launching a print advertising agency fits your entrepreneurial profile.
If there is a match, it will then be time to look at assembling the founding team of your business.
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Assemble your print advertising agency's founding team
The next step to start your print advertising agency is to think about the ideal founding team, or to go in alone (which is always an option).
Setting up a business with several partners is a way of reducing the (high) risk of launching a print advertising agency since it allows the financial risk of the project to be shared between the co-founders.
This also allows the company to benefit from a greater diversity of profiles in the management team and to spread the burden of decision-making over several shoulders.
But, running a business with multiple co-founders brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your business.
To make an informed decision, we suggest asking yourself these questions:
- How many co-founders would increase the project's chances of success?
- Do you and your potential partners share the same aspirations for the project?
- What is your plan B in case of failure?
Let's examine each of these questions in detail.
How many co-founders would increase the project's chances of success?
The answer to this question will depend on a number of factors, including:
- Your savings compared with the amount of initial capital needed to launch the print advertising agency
- The skills you have compared with those needed to make a success of such a project
- How you want key decisions to be taken in the business (an odd number of partners or a majority partner is generally recommended to avoid deadlock)
Put simply, your partners contribute money and/or skills, and increasing the number of partners is often a good idea when one of these resources is in short supply.
Do you and your potential partners share the same aspirations for the project?
One of the key questions when selecting your potential partners will be their expectations. Do you want to create a small or large business? What are your ambitions for the next 10 or 15 years?
It's better to agree from the outset on what you want to create to avoid disagreements, and to check that you stay on the same wavelength as the project progresses to avoid frustration.
What is your plan B in case of failure?
Of course, we wish you every success, but it's wise to have a plan B when setting up a business.
How you handle the possibility of things not working out can depend a lot on the kind of relationship you have with your co-founders (like being a close friend, spouse, former colleague, etc.) and each person's individual situation.
Take, for instance, launching a business with your spouse. It may seem like a great plan, but if the business doesn't succeed, you could find yourself losing the entire household income at once, and that could be quite a nerve-wracking situation.
Similarly, starting a business partnership with a friend has its challenges. If the business doesn't work out or if tough decisions need to be made, it could strain the friendship.
It's essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Is there room for another print advertising agency on the market?
The next step in starting a print advertising agency is to undertake market research. Now, let's delve into what this entails.
The objectives of market research
The goal here is straightforward: evaluate the demand for your business and determine if there's an opportunity to be seized.
One of the key points of your market analysis will be to ensure that the market is not saturated by competing offers.
The market research to open your print advertising agency will also help you to define a concept and market positioning likely to appeal to your target clientele.
Finally, your analysis will provide you with the data you need to assess the revenue potential of your future business.
Let's take a look at how to carry out your market research.
Evaluating key trends in the sector
Market research for a print advertising agency usually begins with an analysis of the sector in order to develop a solid understanding of its key players, and recent trends.
Assessing the demand
After the sector analysis comes demand analysis. Demand for a print advertising agency refers to customers likely to consume the products and services offered by your company or its competitors.
Looking at the demand will enable you to gain insights into the desires and needs expressed by your future customers and their observed purchasing habits.
To be relevant, your demand analysis must be targeted to the geographic area(s) served by your company.
Your demand analysis should highlight the following points:
- Who buys the type of products and services you sell?
- How many potential customers are there in the geographical area(s) targeted by your company?
- What are their needs and expectations?
- What are their purchasing habits?
- How much do they spend on average?
- What are the main customer segments and their characteristics?
- How to communicate and promote the company's offer to reach each segment?
Analyzing demand helps pinpoint customer segments your print advertising agency could target and determines the products or services that will meet their expectations.
Assessing the supply
Once you have a clear vision of who your potential customers are and what they want, the next step is to look at your competitors.
Amongst other things, you’ll need to ask yourself:
- What brands are competing directly/indirectly against your print advertising agency?
- How many competitors are there in the market?
- Where are they located in relation to your company's location?
- What will be the balance of power between you and your competitors?
- What types of services and products do they offer? At what price?
- Are they targeting the same customers as you?
- How do they promote themselves?
- Which concepts seem to appeal most to customers?
- Which competitors seem to be doing best?
The aim of your competitive analysis will be to identify who is likely to overshadow you, and to find a way to differentiate yourself (more on this see below).
Regulations
Market research is also an opportunity to look at the regulations and conditions required to do business.
Ask yourself the following questions:
- Do you need a special degree to open a print advertising agency?
- Are there necessary licences or permits?
- What are the main laws applicable to your future business?
At this stage, your analysis of the regulations should be carried out at a high level, to familiarize yourself with any rules and procedures, and above all to ensure that you meet the necessary conditions for carrying out the activity before going any further.
You will have the opportunity to come back to the regulation afterwards with your lawyer when your project is at a more advanced stage.
Take stock of the lessons learned from your market analysis
Market research should give you a definitive idea of your business idea's chances of commercial success.
Ideally, the conclusion is that there is a market opportunity because one or more customer segments are currently underserved by the competition.
On the other hand, the conclusion may be that the market is already taken. In this case, don't panic: the first piece of good news is that you're not going to spend several years working hard on a project that has no chance of succeeding. The second is that there's no shortage of ideas out there: at The Business Plan Shop, we've identified over 1,300 business start-up ideas, so you're bound to find something that will work.
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How should I position my print advertising agency on the market?
The next step to start your print advertising agency is to define precisely the market positioning your company will adopt in order to capitalise on the opportunity identified during your market research.
Market positioning refers to the place your product and service offering occupies in customers' minds and how they differ from the competition. Being perceived as a low-cost solution, for example.
To find a concept and a market positioning that will resonate with your customers, you need to address the following issues:
- How can you differentiate yourself from your competitors?
- Is it better to start or buy a print advertising agency already in operation?
- How will you validate your concept and market positioning before investing in the business?
Let's look at these aspects in more detail.
How can you differentiate yourself from your competitors?
Opening a print advertising agency means starting with a major disadvantage compared with competitors already active on the market.
While you will have to create everything from scratch, your competitors already have everything in place.
Your competitors' teams know the business well, whereas yours has only just been recruited, their customers are loyal and they benefit from word of mouth that you don't yet have.
So you're going to need a solid plan to succeed in taking market share from your competitors and making your mark.
There are a number of aspects to consider in order to try to avoid direct confrontation if possible:
- Can you target a different customer base than your competitors?
- Can you offer products or services that are different from or complementary to what your competitors already sell?
- How will your competitors react to your print advertising agency entering their market?
- Can you build a sustainable competitive advantage that will enable you to compete with your current and future competitors?
Is it better to start or buy a print advertising agency already in operation?
The alternative to setting up a new independent business is to buy out and take over a print advertising agency already in operation.
A takeover is a good way of reducing the risk of your project compared with a pure start-up.
Taking over a business has two enormous advantages over setting up a new one: you start out on an equal footing with your competitors since you take over the team and the customer base, and you don't increase the supply on the market enabling you to maintain the existing balance on the market where the business operates.
However, the capital requirements for a takeover are higher because the business will have to be bought from its previous owners.
How will you validate your concept and market positioning before investing in the business?
However you decide to set up your business, you will need to ensure that there is a good fit between what you sell and what customers are looking to buy.
To do this, you'll need to meet your target customers to present your products or services and check that they meet their expectations.
Where should I base my print advertising agency?
The next step in our guide on starting a print advertising agency involves making a key choice about where you want your business to be located.
Picking the ideal location for your business is like selecting the perfect canvas for a painting. Without it, your business might not showcase its true colors.
We recommend that you take the following factors into account when making your decision:
- Visibility and foot traffic
- Parking space, road and public transport accessibility
- Proximity to target customers
- Competitor presence
This list is not comprehensive and will have to be adjusted based on the details of your project.
The parameters to be taken into account will also depend on whether you opt to rent premises or buy them. If you are a tenant, you will need to consider the conditions attached to the lease: duration, rent increase, renewal conditions, etc.
Lease agreements differ widely from country to country, so it's essential to review the terms that apply to your situation. Before putting pen to paper, consider having your lawyer look carefully at the lease.
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What legal form should I choose for my print advertising agency?
The next step to start a print advertising agency is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your print advertising agency's legal form important?
Choosing the right legal form for your print advertising agency is important because this will affect:
- Taxation: your tax obligations depend on the legal structure you choose, and this principle applies to both personal income tax and business taxes.
- Risk exposure: some legal structures have a legal personality (also known as corporate personality) and limited liability, which separates them from the owners running the business. This means that the business would be liable rather than the owners if things were to go wrong (lawsuit, debt owed in case of bankruptcy, etc.).
- Decision-making and governance: how you make key decisions varies based on the legal form of your business. In some cases you might need to have a board of directors and organise general assemblies to enable shareholders to influence major decisions with their voting rights.
- Financing: securing funding from investors requires you to have a company and they will expect limited liability and corporate personality to protect them legally.
- Paperwork and legal formalities: the legal structure you select determines whether certain obligations are necessary, such as producing annual accounts, or getting your books audited.
Popular business legal forms
The specific names of legal structures vary from country to country, but they usually fall within the two main categories below:
- Individual businesses
- Companies
Individual businesses
Individual businesses, like sole traders or sole proprietorships, are made for self-employed entrepreneurs and freelancers rather than businesses which employ staff.
They benefit from straightforward administrative requirements, minimal paperwork to start, simpler tax calculations, and streamlined accounting procedures.
However, the downside is that there's typically no legal distinction between the business and the person responsible for day-to-day operations. This means the owner's personal assets are at risk if the business faces problems or goes bankrupt.
There is also no share capital in such a structure, meaning that individual businesses cannot raise equity from investors which seriously limits funding options.
Companies
Companies are versatile structures suited to projects of all sizes in terms of number of founders, number of employees and amount of capital.
They are a bit more complex to operate than individual businesses with more formalities, stringent accounting requirements, more complex tax implications, etc.
In return, they offer stronger protections to their shareholders. They usually benefit from having their own legal identity and limited liability, meaning co-founders and investors can only ever lose the amount of money they have put into the company.
For instance, if things were to go south (the company files for bankruptcy or there is a legal issue), the company would take the hit, safeguarding the personal assets of the founders and investors.
How should I choose my print advertising agency's legal structure?
Deciding on a legal form is easy once you've estimated your sales, decided whether or not you need employees and figured out the number of co-founders joining you.
It's essential to remember that a solid business idea will succeed no matter which legal structure you pick. Tax laws change regularly, so you can't rely on specific tax advantages tied to a particular structure when starting a business.
A proven approach is to look at what legal structures your top competitors are using, and go with the most common option as a working assumption. Once your idea is mature enough, and you're getting closer to officially registering your business, you can get advice from a lawyer and an accountant to confirm your choice.
Can I switch my print advertising agency's legal structure if I get it wrong?
Yes, changing your legal structure later is possible, though it may involve selling the old entity to a new entity in some cases, which adds further expenses. If you want to save on such costs, it makes sense to pick the correct legal form for your business the first time around.
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Assess the startup costs for a print advertising agency
The next step in creating a print advertising agency involves thinking about the equipment and staff needed for the business to operate.
After figuring out what you need for your business, your financial plan will reveal how much money you'll need to start and how much you might make (check below for more details).
Because every venture is distinctive, providing a reliable one-size-fits-all budget for launching a print advertising agency without knowing the specifics of your project is not feasible.
Each project has its own particularities (size, concept, location), and only a forecast can show the exact amount required for the initial investment.
The first thing you'll need to consider is the equipment and investments you'll need to get your business up and running.
Startup costs and investments to launch your print advertising agency
For a print advertising agency, the initial working capital requirements (WCR) and investments could include the following elements:
- Printing equipment: This includes printers, scanners, and other equipment necessary for producing high-quality print materials for your clients.
- Furniture and fixtures: Your agency may need desks, chairs, and other furniture for employees, as well as display stands and other fixtures for showcasing your work.
- Computer hardware and software: In addition to your printing equipment, you will also need computers, monitors, and software for designing and editing your advertisements.
- Office space: This may include rent or lease payments for your office space, as well as any necessary renovations or improvements to make it suitable for your agency's needs.
- Vehicles: If your agency offers services such as outdoor advertising, you may need to invest in vehicles for transporting materials and equipment to various locations.
Of course, you will need to adapt this list to your business specificities.
Staffing plan of a print advertising agency
In addition to equipment, you'll also need to consider the human resources required to run the print advertising agency on a day-to-day basis.
The number of recruitments you need to plan will depend mainly on the size of your company.
Once again, this list is only indicative and will need to be adjusted according to the specifics of your print advertising agency.
Other operating expenses for a print advertising agency
While you're thinking about the resources you'll need, it's also a good time to start listing the operating costs you'll need to anticipate for your business.
The main operating costs for a print advertising agency may include:
- Staff costs: This includes salaries, benefits, and any other expenses related to employees such as training and recruitment fees.
- Accountancy fees: Your print advertising agency may need to hire an accountant to handle financial tasks such as tax preparation and bookkeeping.
- Insurance costs: It is important to have insurance coverage for your agency to protect against any potential risks or liabilities.
- Software licenses: You may need to purchase software licenses for design programs or other tools used in your agency.
- Banking fees: This includes fees for maintaining a business bank account, wire transfers, and other transaction fees.
- Rent: If you have a physical office space, rent will be a significant operating expense for your agency.
- Marketing and advertising expenses: This includes costs for promoting your agency and its services, such as print ads, digital marketing, and attending industry events.
- Office supplies and equipment: This includes expenses for items such as printers, computers, and office furniture.
- Utilities: Your agency will have to pay for electricity, water, internet, and other utilities necessary to keep your office running.
- Travel and transportation expenses: If your agency works with clients in different locations, you may need to cover expenses for travel and transportation.
- Professional development: It is important to invest in training and development for your employees to stay updated with industry trends and skills.
- Legal fees: Your agency may need to hire a lawyer for contracts, copyright issues, or other legal matters.
- Office maintenance: This includes expenses for cleaning services, repairs, and maintenance of your office space.
- Taxes: Your agency will have to pay taxes on profits and other business-related taxes.
- Office snacks and perks: Providing snacks and other perks for employees can boost morale, but it also comes at a cost.
Like for the other examples included in this guide, this list will need to be tailored to your business but should be a good starting point for your budget.
Creating a sales & marketing plan for your print advertising agency
The next step to start a print advertising agency is to think about how you are going to attract and retain customers.
You need to ask yourself the following questions:
- What actions can be leveraged to attract as many customers as possible?
- How will you then retain customers?
- What resources do you need to allocate for each initiative (human and financial)?
- How many sales and what turnover can you expect to generate in return?
How you will attract and retain customers depends on your ambition, the size of your startup and the nature of your exact concept, but you could consider the following initiatives.
Your sales forecast may also be influenced by seasonality related to your business type, such as fluctuations during busy holiday periods, and your competitive environment.
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Building your print advertising agency's financial forecast
The next step to opening a print advertising agency is to create your financial forecast.
What is a print advertising agency financial forecast?
A print advertising agency financial forecast is a forward-looking tool that projects the financial performance of your business over a specific period (usually 3 years for start-ups).
A forecast looks at your business finances in detail - from income to operating costs and investments - to evaluate its expected profitability and future cash flows.
Building a financial forecast enables you to determine the precise amount of initial financing required to start your print advertising agency.
There are many promising business ideas but very few are actually viable and making a financial forecast is the only way to ensure that your project holds up economically and financially.
Your financial forecast will also be part of your overall business plan (which we will detail in a later step), which is the document you will need to secure financing.
Financial forecasts are used to drive your print advertising agency and make key decisions, both in the pre and post-launch phases:
- Should we go ahead with the business or scrap the idea?
- Should we hire staff or use an external service provider?
- Which development project offers the best growth prospects?
- Etc.
Creating a financial forecast for starting a print advertising agency is an iterative process as you will need to refine your numbers as your business idea matures.
As your print advertising agency grows, your forecasts will become more accurate. You will also need to test different scenarios to ensure that your business model holds true even if economic conditions deteriorate (lower sales than expected, difficulties in recruiting, sudden cost increases or equipment failure problems, for example).
Once you’ve launched your business, it will also be important to regularly compare your accounting data to your financial projections in order to keep your forecast up-to-date and maintain visibility on future cash flows.
What does a financial projection look like?
Your print advertising agency forecast will be presented using the following financial tables.
The projected P&L statement
The projected P&L statement for a print advertising agency shows how much revenue and profits your business is expected to generate in the future.
The projected balance sheet of your print advertising agency
Your print advertising agency's projected balance sheet provides a snapshot of your business’s financial position at year-end.
The cash flow forecast
A projected cash flow statement for a print advertising agency is used to show how much cash the business is expected to consume or generate in the years to come.
What is the best financial forecasting tool for starting your print advertising agency?
The simplest and easiest way to create your print advertising agency's projections is to use professional online financial forecasting software such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Finding a name and registering your print advertising agency
The next step in starting a print advertising agency is to decide on a name for your entity.
For starters, you cannot take a name similar to a name already registered by a competitor or protected by a trademark without inevitably risking getting sued. So you’ll need to find a name available, and reserve it before others can.
In addition, you will probably want to use the same name for:
- Your company’s legal name - Example LTD or Example Inc
- Your trading name - Example
- A trademark - Example ®
- Your company’s domain name - Example.com
The issue is that you’ll need to register your name in three different places almost simultaneously, but with each place having its own timeframes:
- Registering a domain name is instantaneous
- Registering a trademark takes at least 3 months (if your application is accepted)
- Registering a company depends on the country, but it's generally fairly quick
You will therefore be faced with the choice of either registering everything at once in the hope that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.
Our advice is to discuss the strategy with your legal counsel (see further down in this guide) and to give priority to your domain names and your registered trademark. You'll always have the option of using a trading name that's different from your company's legal name, and that's not a big deal.
To check that the name you want is not already in use, you should consult:
- Your country's business register
- The register of trademarks where you wish to obtain protection
- Your preferred search engine
- A domain name reservation company (such as GoDaddy)
If the name you want is available, you can go ahead and register it.
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What corporate identity do I want for my print advertising agency?
The following step to start a print advertising agency is to define your company's visual identity.
Visual identity is part of the DNA of your print advertising agency: it makes you recognizable and recognized by your customers, and helps you stand out from the competition. It also helps convey your values, notably through the choice of colors that identify the company.
Creating your business's visual identity yourself is entirely possible: there are several online tools that let you generate color palettes, choose typography and even generate logos.
However, we advise you to delegate this task to a designer or a communications agency for a professional result.
Your corporate identity will include the following elements:
- Your business logo
- Your brand guidelines
- Your business cards
- Design and theme of your website
Logo
Your print advertising agency's logo serves as a quick identifier for your company. It will be featured on all your communication platforms (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
Beyond its appearance, your logo should be easy to use on any type of support and background (white, black, gray, colored, etc.). Ideally, it should be easy to use in a variety of colors.
Brand guidelines
One of the challenges when starting a print advertising agency is to ensure a consistent brand image wherever your company is visible.
This is the role of your company's brand guidelines, which defines the typography and colors used by your brand and thus acts as the protector of your brand image.
Typography refers to the fonts used (family and size). For example, Trebuchet in size 22 for your titles and Times New Roman in size 13 for your texts.
The colors chosen to represent your brand should typically be limited to five (or fewer):
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Classic but a must-have, your business cards will be at your side to help you easily communicate your contact details to your founders, customers, suppliers, recruitment candidates, etc.
In essence, they should feature your logo and adhere to the brand guidelines mentioned earlier.
Website theme
Likewise, the theme of your print advertising agency website will integrate your logo and follow the brand guidelines we talked about earlier.
This will also define the look and feel of all your site's graphic elements:
- Buttons
- Menus
- Forms
- Banners
- Etc.
Navigate the legal and regulatory requirements for launching your print advertising agency
The next thing to do in getting a print advertising agency off the ground is to handle all the legal and regulatory requirements. We recommend that you be accompanied by a law firm for all of the steps outlined below.
Intellectual property
One of your priorities will be to ensure that your company's intellectual property is adequately protected.
As explained before, you can choose to register a trademark. Your lawyer can help you with a detailed search to make sure your chosen trademark is unique and doesn't clash with existing ones.
They'll assist in preparing the required documents and steer you in picking the right categories and locations for trademark registration.
Moreover, your lawyer can offer guidance on additional measures to protect other intellectual property assets your company may have.
Getting your print advertising agency paperwork in order
For day-to-day operations, your print advertising agency will need to rely on a set of contractual documents.
Your exact needs in this respect will depend on the country in which you are launching your print advertising agency, the number of partners and the envisaged size of the company.
However, you will probably need at least the following documents:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
Operating your business legally may require licences and business permits. The exact requirements applicable to your situation will depend on the country in which you set up your print advertising agency.
The lawyers who advise you will also be able to guide you with regard to all the rules applicable to your business.
Similarly, your accountant will be able to help you take the necessary steps to comply with the tax authorities.
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Create a business plan for your print advertising agency
The next step to open a print advertising agency: put together your business plan.
What is a business plan?
To keep it simple, a business plan comprises two crucial components:
- Firstly, a numerical part, the financial forecast (which we mentioned earlier), which highlights the initial financing requirements and profitability potential of the print advertising agency,
- And a written, well-argued section that presents your project in detail, aims to convince the reader of its chances of success, and provides the context needed to assess whether the forecast is realistic or not.
The business plan will enable you to verify the coherence of your project, and ensure that the company can be profitable before incurring further costs. It will also help you convince business and financial partners.
As you can see, your business plan must be convincing and error-free.
How to write a business plan for a print advertising agency?
Nowadays, the modern and most efficient way to write a print advertising agency business plan is to use startup business plan software like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for aprint advertising agency has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
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Raise the financing needed to launch your print advertising agency
With your business plan in hand, you can tackle one of the final steps to open a print advertising agency business: the search for financing.
Raising the capital needed to launch your business will probably require a combination of equity and debt, which are the two types of financing available to companies.
Equity funding
Equity is the sum of money invested in a print advertising agency by both founders and investors.
Equity is a key factor in business start-ups. Should the project fail, the sums invested in equity are likely to be lost; these sums therefore enable the founders to send a strong signal to their commercial and financial partners as to their conviction in the project's chances of success.
In terms of return on investment, equity investors can either receive dividends from the company (provided it is profitable) or realize capital gains by selling their shares (provided a buyer is interested in the company).
Equity providers are therefore in a very risky position. They can lose everything in the event of bankruptcy, and will only see a return on their investment if the company is profitable or resold. On the other hand, they can generate a very high return if the project is a success.
Given their position, equity investors look for start-up projects with sufficient growth and profitability potential to offset their risk.
From a technical standpoint, equity includes:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: which represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Contributions made by the owners.
- Private investors: business angels, friends and family.
- Crowdfunding: raising funds by involving a group of people through campaigns where they contribute money or make donations, often getting something in return for their support.
- Start-up aid, e.g. government loans to help founders build up their start-up capital.
Debt financing
Debt is the other way of financing companies. Unlike equity, debt offers lenders a limited, contractually guaranteed return on their investment.
Your print advertising agency undertakes to pay lenders' interest and repay the capital borrowed according to a pre-agreed schedule. Lenders are therefore making money whether or not your company makes a profit.
As a result, the only risk lenders take is that of your print advertising agency going bankrupt, so they're extremely conservative and will want to see prudent, hands-on management of the company's finances.
From the point of view of the company and all its stakeholders (workforce, customers, suppliers, etc.), the company's contractual obligation to repay lenders increases the risk for all. As a result, there is a certain caution towards companies which are too heavily indebted.
Businesses can borrow debt in two main ways:
- Against assets: this is the most common way of borrowing. The bank funds a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the business cannot repay the loan, the bank takes the asset and sells it to reduce losses.
- Against cash flows: the bank looks at how much profit and cash flow the business expects to make in the future. Based on these projections, it assigns a credit risk to the business and decides how much the business can borrow and under what terms (amount, interest rate, and duration of the loan).
It's difficult to borrow against future cash flows when you're starting a print advertising agency, because the business doesn't yet have historical data to reassure about the credibility of cash flow forecast.
Borrowing to finance a portion of equipment purchases is therefore often the only option available to founders. The assets that can be financed with this option must also be easy to resell, in the unfortunate event that the bank is forced to seize them, which could limit your options even further.
As far as possible sources of borrowing are concerned, the main ones here are banks and credit institutions. Bear in mind, however, that each institution is different, in terms of the risk it is prepared to accept, what it is willing to finance, and how the risk of your project will be perceived.
In some countries, it is also possible to borrow from private investors (directly or via crowdfunding platforms) or other companies, but not everywhere.
Key points about financing your print advertising agency
Multiple solutions are available to help you raise the initial financing you need to open your print advertising agency. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the financing.
What to do after launching my print advertising agency?
Launching your print advertising agency is the beginning of an exciting entrepreneurial adventure, and the culmination of your efforts to turn your idea into a reality. But this is also when the real work begins.
As you know, nearly half of all new businesses fail, so you'll need to do everything you can to make your business sustainable right from the start.
Estimating the future financial performance of a print advertising agency inevitably involves a degree of uncertainty. That's why we recommend simulating several scenarios: a central case with the most likely scenario, an optimistic case, and a pessimistic case designed to test the limits of your business model.
Normally, your company's actual financial performance, observed after you start trading, should fall somewhere between your pessimistic and optimistic cases.
The important thing will be to quickly measure and compare this actual performance with the figures in your forecast to see where you stand, then update the forecast to re-estimate the future cash flows and cash position of your print advertising agency.
This forward-looking financial management exercise is the only way to know where you stand and where you're going. And, when your figures fall short of expectations, to quickly implement actions to turn things around before the company runs out of cash.
There's nothing more dangerous than waiting until you have your accounts, which takes up to nine months after the end of your financial year (if you are in the UK, abroad your mileage will vary), to then realize that you're not on the right track and that your print advertising agency won't have enough cash to operate over the next twelve months.
This is where using a forecasting solution that integrates actuals vs. forecast tracking, like The Business Plan Shop's financial dashboards do, can simplify the financial management of your business and help reduce the risk associated with your start-up project.
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Key takeaways
- To open a print advertising agency you need to go through each of the 15 steps we have outlined in this guide.
- The financial forecast is the tool that will enable you to check that your project can be profitable and to estimate the investment and initial financing requirements.
- The business plan is the document that your financial partners will ask you to produce when seeking finance.
- Once you have started trading, it will be essential to keep your financial forecasts up to date in order to maintain visibility of the future cash flow of your print advertising agency.
- Leveraging a financial planning and analysis platform that seamlessly integrates forecasts, business plans, and real-time performance monitoring — like The Business Plan Shop — simplifies the process and mitigates risks associated with launching a business.
We hope this practical guide has given you a better understanding of how to open a print advertising agency. Please do not hesitate to contact our team if you have any questions or if you would like to share your experience of setting up your own business.
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Founder & CEO at The Business Plan Shop Ltd
