Do you want to start advertising agency business? Executive Summary Company Summary Products Marketing Analysis of Marketing Agency Strategy Personnel plan Financial Plan

Do you want to start advertising agency business?

In these times where people buy benefits instead of products, it has become really significant to advertise the services whether you are a small business or a larger one. To let people know why they should choose your products rather than the same product of another company, you have to advertise in the best way one can.
Do you think that you have the mind to advertise in the best way one can? If no, then here we are ‘Albert Advertisers’ with the professional minds to feature your brand.
The sample business plan envisaging how Albert Advertisers will be started is given here for anyone who wants to know how to start an advertising agency.

Executive Summary

2.1 The Business

Albert Advertisers will be a registered and licensed advertisement company located in Austin, owned by Albert Finney. The business will be based on advertising and marketing small and large businesses in Austin by traditional means of making billboards and by using digital and social platforms.

2.2 Management

If you have decided to start an advertising agency, you should then make a detailed advertising agency business plan with a special focus on how you will be managing your business. Albert Advertisers will be managed by Albert himself. He will hire the perfect minds after rigorous testing to ensure the best and unique ideas for advertisement. Besides, he will hire IT Experts, Painters, and Web Developers to convert your dream of attracting a large audience into reality.

2.3 Customers

Our customers will be the owners of online companies and entrepreneurs of large and small startups based in Austin. Besides new startups, we also expect previously running businesses to avail our services whenever they have to market their new products.

2.4 Business Target

Enlisting the targets, you want to achieve in your marketing agency business plan, will help you in making a strategy to achieve them. Our target is to be the most popular advertisement agency in Austin and to earn a profit margin of $10k per month by the end of the first year.

3 Years Profit Forecast

Company Summary

3.1 Company Owner

Albert Finney will be the owner of Albert Advertisers. Albert is a Bachelor in Advertising and Digital Media Design from the University of Oregon and has a two-year experience of working as Advertising Manager. By the mix of both his ideas and management skills, Albert is confident that soon he will be able to be prominent and distinct in the market he is going to serve.

3.2 Why the Business is being started

Albert has always been passionate about starting his own business. His degree and his interests toward digital marketing persuaded him to start a marketing company. This will be a source of earning a profit while using his dedication and skills in this profession.

3.3 How the Business will be started

Due to his prior experience as an Advertising manager, Albert knew well how to start a marketing agency. If you are new to this business and want to know about how to start a marketing company, you can take help from this sample business plan. Albert will hire a team of experienced web developers, painters, artists, billboard designers, and general assistants to advertise others’ business. A place will be taken on rent and necessary equipment like computers, advertising flags, banners, paint, brushes, boards, and accessories will be bought. Albert has decided to provide a comfortable and learning environment for his team and also to make a complacent place for the customers to sit and see our advertising projects. The startup summary is as follows:

Advertising Agency Business Plan 1 The detailed start-up requirements are given below:

Start-up Expenses  
Legal $55 300
Consultants $0
Insurance $32 750
Rent $32 500
Research and Development $32 750
Expensed Equipment $32 750
Signs $1 250
TOTAL START-UP EXPENSES $187 300
Start-up Assets $220 875
Cash Required $332 500
Start-up Inventory $32 625
Other Current Assets $232 500
Long-term Assets $235 000
TOTAL ASSETS $121 875
Total Requirements $245 000
START-UP FUNDING
START-UP FUNDING $273 125
Start-up Expenses to Fund $151 875
Start-up Assets to Fund $123 000
TOTAL FUNDING REQUIRED $0
Assets $23 125
Non-cash Assets from Start-up $18 750
Cash Requirements from Start-up $0
Additional Cash Raised $18 750
Cash Balance on Starting Date $21 875
TOTAL ASSETS $373 125
Liabilities and Capital $0
Liabilities $0
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $0
Capital $620 125
Planned Investment $620 125
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $620 125
Loss at Start-up (Start-up Expenses) $313 125
TOTAL CAPITAL $251 875
TOTAL CAPITAL AND LIABILITIES $251 875
Total Funding $255 000

Products

Before deciding the services Albert analyzed what others are lacking in this domain. To adopt additional paths for advertisement besides traditional means Albert has decided to start a digital marketing agency. The overall services Albert Advertisers will provide are given here:

  • Printing innovative flyers and brochures
  • Designing appealing and unique billboards
  • Making related banners and flags
  • Making business cards and invitation cards
  • Advertising through social media sites, websites, and emails
  • Advertising using the technique of search engine optimization

Marketing Analysis of Marketing Agency

The next important step you have to take if you are looking for how to start your own marketing agency is to do an accurate market analysis. You need to figure out what others in the same business are doing and what additional services you’ll have to provide to take a lead upon them. Albert has decided to start marketing agency not just for the sake of opening his own business but to introduce new ways of advertising and getting introduced to people. He has decided to follow both the traditional means of advertisements and the latest digital trends. So, you can have guidance from this sample business plan even if you are looking for how to start digital marketing agency.

5.1 Market Trends

The entrepreneurs when they are taking a startup, can’t focus on each and everything by themselves and they want the services of some professional and trustee organization to do marketing work for their business. According to a report by IBISWorld, stats have shown a noticeable growth rate of 4.2% of the advertising industry in the United States over the past five years, generating a revenue of $54.5 billion annually. In the US alone there are more than 120 thousand advertising agencies running successfully. So the business can prove extremely beneficial for you provided that you plan it effectively.

5.2 Marketing Segmentation

To know and focus on the demands of its customers, Albert Advertisers has divided its customers in the following target groups. The detailed marketing segmentation of our target audience is as follows:

Advertising Agency Business Plan 2

5.2.1 Business Owners: The biggest category of our customers will be the owners of small and large businesses based in Austin. They will avail our services of designing billboards and printing brochures for them as well as the services of our experts to make their website SEO friendly.

5.2.2 Institutions & Organizations: Our second target group comprises of various institutions and organizations located in Austin including public-sector organizations, schools, colleges and universities, political parties, sports organizations, and non-profit organizations. They will need our services to promote their ideas and services.

5.2.3 Online Companies: Our third target group will be the online companies not just restricted to Austin but to anywhere in the United States. They will avail just our services of social media marketing, developing websites and SEO their content.

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Institutions & Organizations 32% 11 433 13 344 16 553 18 745 20 545 13,43%
Business Owners 48% 22 334 32 344 43 665 52 544 66 432 10,00%
Online Companies 20% 12 867 14 433 15 999 17 565 19 131 15,32%
Total 100% 46 634 60 121 76 217 88 854 106 108 9,54%

5.3 Business Target

We aim at extending our services to several cities through our online servicing. Our financial goals to be achieved over the course of three years are:

  • To balance the initial cost of the startup with earned profits by the end of the first year
  • To achieve the net profit margin of $10k per month by the end of the first year and $15k per month by the end of the second year

5.4 Product Pricing

After considering the market demands, we have priced our services in the range similar to our competitors. However, we’ll be offering several discounts to introduce us to the market.

Strategy

If you are going to start a social media marketing agency or even a traditional marketing agency you must have an excellent sales strategy plan for yourself. To present your work to your target customers you have to prove that you can help them in gaining customers through advertisements, and that is only possible if your own advertisement plan for your company is extraordinary. If you are looking for how to start a digital marketing agency pdf format, you can take help from this freely available business plan on how to start marketing agency mainly focused on digital marketing.

6.1 Competitive Analysis

Our biggest competitive advantage is that our company will not only be making billboards and banners but in addition to these, we will be hiring IT Experts and Web Developers to advertise through digital media. Our skilled and experienced employees will make your website SEO friendly. Secondly, our staff especially web developers are highly experienced and despite their prior experience they will be given continuous learning programs. Moreover, we will be servicing online, thus enabling our customers to facilitate online orders. Lastly, we will be offering discounts to our customers to help us in getting introduced to a large audience.

6.2 Sales Strategy

  • We’ll ensure a 25% increase in our website traffic every month and a gradual increase in our means to convert that traffic to our customers
  • We’ll SEO our website to give our customers an example of how we work
  • We’ll advertise us through posting appealing billboards and banners on public places and on social media
  • We’ll display our works to our customers by sending them introductory letters and by exhibiting them in the waiting area for them
  • We will offer a 20% discount on our services for the first five months of our launch

6.3 Sales Monthly

Advertising Agency Business Plan 3

6.4 Sales Yearly

Advertising Agency Business Plan 4

6.5 Sales Forecast

Advertising Agency Business Plan 5

Sales Forecast
Unit Sales Year 1 Year 2 Year 3
Flyers & brochures 1 887 030 2 680 320 2 588 240
Billboards, banners & flags 802 370 815 430 823 540
Business & invitation cards 539 320 770230 1 002 310
Digital advertising 265 450 322 390 393 320
TOTAL UNIT SALES 3 494 170 4 588 370 4 807 410
Unit Prices Year 1 Year 2 Year 3
Flyers & brochures $140,00 $150,00 $160,00
Billboards, banners & flags $600,00 $800,00 $1 000,00
Business & invitation cards $700,00 $800,00 $900,00
Digital advertising $650,00 $750,00 $850,00
Sales
Flyers & brochures $2 149 800 $2 784 000 $3 383 200
Billboards, banners & flags $120 050 $194 500 $268 500
Business & invitation cards $50 110 $71 600 $93 000
Digital advertising $139 350 $194 600 $249 850
TOTAL SALES
Direct Unit Costs $Year 1 $Year 2 $Year 3
Flyers & brochures $0,70 $0,80 $0,90
Billboards, banners & flags $0,40 $0,45 $0,50
Business & invitation cards $0,30 $0,35 $0,40
Digital advertising $3,00 $3,50 $4,00
Direct Cost of Sales
Flyers & brochures $989 300 $1 839 000 $2 679 700
Billboards, banners & flags $66 600 $119 900 $173 200
Business & invitation cards $17 900 $35 000 $52 100
Digital advertising $19 400 $67 600 $115 800
Subtotal Direct Cost of Sales $1 294 100 $1 699 400 $2 104 700

Personnel plan

If you are starting a marketing agency especially a digital marketing agency you will need to hire highly trained staff to prove that you are the best among your competitors. In this sample digital marketing agency business plan, we are enlisting the employees Albert will hire with a little job description.

7.1 Company Staff

Albert will manage the business himself, the staff he’ll hire is as follows:

  • 1 Accountant to maintain financial and other records
  • 1 Receptionist to attend to customers
  • 4 Graphic Artists and Painters to design billboards, banners, and brochures
  • 2 SEO Specialists to do search engine optimization
  • 4 Web Developers to develop websites and to do social media marketing
  • 2 Technicians to operate the machines
  • 2 General Assistants to carry day to day tasks and to bring required materials
  • 1 Cleaner to clean the facility
  • 1 Driver to provide transport

7.2 Average Salary of Employees

Personnel Plan
Year 1 Year 2 Year 3
Accountant $85 000 $95 000 $105 000
Receptionist $45 000 $50 000 $55 000
Graphic Artists $152 000 $159 000 $166 000
SEO Specialists $152 000 $159 000 $166 000
Web Developers $152 000 $159 000 $166 000
Technicians $145 000 $152 000 $159 000
General Assistants $50 000 $55 000 $60 000
Cleaner $42 000 $45 000 $48 000
Driver $42 000 $45 000 $48 000
Total Salaries $304 000 $318 000 $332 000

Financial plan

The success of a business heavily depends on the accuracy of its financial plan. A financial plan is important because it demonstrates what will be your startup expenses including the salaries of your employees. Your financial plan will help you in devising the way to balance your startup costs with the earned profits.
While making your marketing agency business plan, you must hire a financial expert to make an accurate financial plan for your business. As you will have to do large scale advertisement and will have to hire experienced and highly paid staff, so it is very important to have an idea of the expenses you will have to meet and the investments you will have to do. For a rough estimate, we are providing the sample financial plan of Albert Advertisers, but still, it is advisable to seek the services of a financial expert for this task if you entering this venture.

8.1 Important Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10,00% 11,00% 12,00%
Long-term Interest Rate 10,00% 10,00% 10,00%
Tax Rate 26,42% 27,76% 28,12%
Other 0 0 0

8.2 Brake-even Analysis

Advertising Agency Business Plan 6

 Brake-Even Analysis  
Monthly Units Break-even 5530
Monthly Revenue Break-even $159 740
Assumptions:
Average Per-Unit Revenue $260,87
Average Per-Unit Variable Cost $0,89
Estimated Monthly Fixed Cost $196 410

8.3 Projected Profit and Loss

Pro Forma Profit And Loss
Year 1 Year 2 Year 3
Sales $309 069 $385 934 $462 799
Direct Cost of Sales $15 100 $19 153 $23 206
Other $0 $0 $0
TOTAL COST OF SALES $15 100 $19 153 $23 206
Gross Margin $293 969 $366 781 $439 593
Gross Margin % 94,98% 94,72% 94,46%
Expenses
Payroll $138 036 $162 898 $187 760
Sales and Marketing and Other Expenses $1 850 $2 000 $2 150
Depreciation $2 070 $2 070 $2 070
Leased Equipment $0 $0 $0
Utilities $4 000 $4 250 $4 500
Insurance $1 800 $1 800 $1 800
Rent $6 500 $7 000 $7 500
Payroll Taxes $34 510 $40 726 $46 942
Other $0 $0 $0
Total Operating Expenses $188 766 $220 744 $252 722
Profit Before Interest and Taxes $105 205 $146 040 $186 875
EBITDA $107 275 $148 110 $188 945
Interest Expense $0 $0 $0
Taxes Incurred $26 838 $37 315 $47 792
Net Profit $78 367 $108 725 $139 083
Net Profit/Sales 30,00% 39,32% 48,64%

8.3.1 Profit Monthly

Advertising Agency Business Plan 7

8.3.2 Profit Yearly

Advertising Agency Business Plan 8

8.3.3 Gross Margin Monthly

Advertising Agency Business Plan 9

8.3.4 Gross Margin Yearly

Advertising Agency Business Plan 10

8.4 Projected Cash Flow

Advertising Agency Business Plan 11

Pro Forma Cash Flow
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $40 124 $45 046 $50 068
Cash from Receivables $7 023 $8 610 $9 297
SUBTOTAL CASH FROM OPERATIONS $47 143 $53 651 $59 359
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $47 143 $53 651 $55 359
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $21 647 $24 204 $26 951
Bill Payments $13 539 $15 385 $170 631
SUBTOTAL SPENT ON OPERATIONS $35 296 $39 549 $43 582
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $35 296 $35 489 $43 882
Net Cash Flow $11 551 $13 167 $15 683
Cash Balance $21 823 $22 381 $28 239

8.5 Projected Balance Sheet

Pro Forma Balance Sheet
Assets Year 1 Year 2 Year 3
Current Assets
Cash $184 666 $218 525 $252 384
Accounts Receivable $12 613 $14 493 $16 373
Inventory $2 980 $3 450 $3 920
Other Current Assets $1 000 $1 000 $1 000
TOTAL CURRENT ASSETS $201 259 $237 468 $273 677
Long-term Assets
Long-term Assets $10 000 $10 000 $10 000
Accumulated Depreciation $12 420 $14 490 $16 560
TOTAL LONG-TERM ASSETS $980 $610 $240
TOTAL ASSETS $198 839 $232 978 $267 117
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9 482 $10 792 $12 102
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $9 482 $10 792 $12 102
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $9 482 $10 792 $12 102
Paid-in Capital $30 000 $30 000 $30 000
Retained Earnings $48 651 $72 636 $96 621
Earnings $100 709 $119 555 $138 401
TOTAL CAPITAL $189 360 $222 190 $255 020
TOTAL LIABILITIES AND CAPITAL $198 839 $232 978 $267 117
Net Worth $182 060 $226 240 $270 420

8.6 Business Ratios

Ratio Analysis
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 4,35% 30,82% 63,29% 4,00%
Percent of Total Assets
Accounts Receivable 5,61% 4,71% 3,81% 9,70%
Inventory 1,85% 1,82% 1,79% 9,80%
Other Current Assets 1,75% 2,02% 2,29% 27,40%
Total Current Assets 138,53% 150,99% 163,45% 54,60%
Long-term Assets -9,47% -21,01% -32,55% 58,40%
TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%
Current Liabilities 4,68% 3,04% 2,76% 27,30%
Long-term Liabilities 0,00% 0,00% 0,00% 25,80%
Total Liabilities 4,68% 3,04% 2,76% 54,10%
NET WORTH 99,32% 101,04% 102,76% 44,90%
Percent of Sales
Sales 100,00% 100,00% 100,00% 100,00%
Gross Margin 94,18% 93,85% 93,52% 0,00%
Selling, General & Administrative Expenses 74,29% 71,83% 69,37% 65,20%
Advertising Expenses 2,06% 1,11% 0,28% 1,40%
Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%
Main Ratios
Current 25,86 29,39 32,92 1,63
Quick 25,4 28,88 32,36 0,84
Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%
Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%
Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 19,20% 21,16% 23,12% N.A.
Return on Equity 47,79% 50,53% 53,27% N.A.
Activity Ratios
Accounts Receivable Turnover 4,56 4,56 4,56 N.A.
Collection Days 92 99 106 N.A.
Inventory Turnover 19,7 22,55 25,4 N.A.
Accounts Payable Turnover 14,17 14,67 15,17 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 1,84 1,55 1,26 N.A.
Debt Ratios
Debt to Net Worth 0 -0,02 -0,04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $120 943 $140 664 $160 385 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0,45 0,48 0,51 N.A.
Current Debt/Total Assets 4% 3% 2% N.A.
Acid Test 23,66 27,01 30,36 N.A.
Sales/Net Worth 1,68 1,29 0,9 N.A.
Dividend Payout 0 0 0 N.A.

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