Join our leading lady Michelle Palmer as she shares her insights into the little, (and not so little), things you need to think about before starting an agency.
It took me a couple of years to decide to go out on my own. The reasons why? Apart from being ambitious and a desire to be my own boss, I was driven by my creativity – I found that ideas I had for branching out and changing how we approached things were sometimes met with ‘no’ and this was frustrating to me. I also wanted to create a different kind of culture. A lot of my friends and colleagues kept encouraging me, telling me I ‘have what it takes’ to be a business owner, a leader and a manager. So here are my tips on things to consider…
1) Are you ready to deal with people in a different way?
All of a sudden you’re responsible for the lives of your team while at work and beyond. Yes, there’s the obvious responsibilities like what work are they doing, when, is it being done correctly and on time, project management, communication – but then there is HR – sick leave, pay, Work Cover, mental and physical health concerns, individual views on so many varying situations (there is absolutely no one way anymore!) People management is a huge part of my job and probably way bigger than I ever expected it to be; as with time, people’s needs change. So it’s not just, “here’s your job, here’s your clients, off you go” – it’s much, much more!
2) Where is your business coming from?
How will you make sure you have a steady flow of clients? How do you ensure you charge the right amount? Do you understand how consulting works to allow you to not only make enough to pay your team and your bills/overheads, but to have a little extra for a rainy day? How will you keep work coming in the door and what happens if there is a lull? Can you troubleshoot? Do you know how to deal with it when someone doesn’t pay their bill?
3) Have you thought through the hidden costs?
There are many things I was totally naïve about at the start, I won’t lie… like payroll tax! Once you have wages over a certain level, the ATO likes to tax you – just because you pay people. Yep, go figure.
There are many other hidden or surprise costs – insurances, legal costs for contracts (because you really should have proper legally binding contracts and agreements for your employees, your partners, your contractors etc). Unless of course, you’re fortunate enough to be a lawyer in another lifetime as well as an agency consultant.
4) Do you have a strategy of how you’ll market yourself and what your longer term goal is?
It may seem so simple at the start because you’ve got friends saying “hey I’ll send work your way” – but the world changes, every year. Pandemics, economic downturn, inflation, people’s behaviours and their expectations of their employer. So you need a strategy of how you will market your business, what and how you want to be seen and known for, and to give yourself a goal – what will I do in a year, where will I be in two years and ideally where will we be in five – and how can I get there? And who can help me get there? What do I need?
5) Bad debt and mistakes and who wears these?
This is another one I went into naively, even though in my role as a Senior Principal (GM) at a former global PR & Communications firm I came across dodgy business owners and operators, I just didn’t think it could or would happen to me. But it does. People won’t pay. People sell their company to a friend for $1 so your contract with them is null and void. People do not even respond to debt collectors. And what if one of your team doesn’t do their job properly because they are meant to check something frequently and they don’t and then you overspend on something, or do not check an order properly and order 5000 of something instead of 500? Who covers it? These are things that you have to be ready for when you go into your business.
Starting your own agency is a lot of fun, incredibly rewarding and provides an amazing sense of freedom but there is also a lot of really hard stuff to face and cope with. So you need a thick skin, a great support team, and to be prepared for surprises (if you don’t like surprises, this is not for you!).
