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Last year, I decided to start an ad agency called Bandits & Friends along with Courtney Berry and my longtime creative partner, Danny Gonzalez. I knew starting a business would have its challenges, but if anyone was ready to do it, it was us.
Courtney was coming off her previous role as a managing director, not to mention her experience on multiple continents across a range of clients and mediums. Danny and I had worked at start-ups and talked with friends who had started agencies and most recently opened an office for our previous agency. The experience was there, now it was just a matter of actually doing it.
What I soon realized is that starting a business from scratch means 90% of your day is spent doing things you’ve never done before. How do we pay people? How do we get paid? Do we need office space? How do you get your agency name trademarked?
As a creative by trade, I can brainstorm, design or write all day. But ask me the best state to register an LLC and I have no clue (I now recommend Delaware).
One challenge in particular that stood out about the business side of business is its love for acronyms. The amount of time I’ve spent googling what a given acronym stands for has far outlasted the time I’ve saved using these arbitrarily shortened phrases. But alas, this is the game we’re playing, so I knew I’d have to learn the meaning of these modern-day hieroglyphics whether I wanted to or not.
By no means is this a comprehensive list of acronyms. If you want that, you should go get your MBA (Master of Business Administration). But if you want a little cheat sheet on a few important acronyms that I wish I’d known when we started Bandits & Friends, you’ve come to the right place.
Let’s start with the basics and progress from there.
LLC. This stands for Limited Liability Company, one of the more popular types of business you can have. It protects its members from personal liability. Cool!
MSA. I admit, I knew this one, but didn’t know what it was called. A Master Service Agreement is a contract you sign with clients that establishes the basic terms and conditions of your relationship. What I didn’t know is that sometimes it’s a simple process, but sometimes it’s a very long negotiation process. Be patient.
EIN. This is an important one, especially at first. This is your Employer Identification Number with the IRS, which you’ll need to pay people. You’ll get it when you file your LLC so write it down somewhere safe.
WMH. I mentioned earlier that 90% of what I’ve done since we started our agency are things I’ve never done before. But a young agency owner must learn to WMH (Wear Many Hats) for a while.
Speaking for myself, when we started I was not only the co-CCO/founder, but also an art director, copywriter, deck designer, proofreader, web developer, animator, editor, studio manager and coffee maker. Doing those things, some of which I had to learn on the job, has not only saved us a bunch of money on freelancers, but also made me better at my job and more caffeinated.
IGTHF. When you’re a young agency, you often find yourself having to make something out of nothing. Chances are you’ll start with some projects on the smaller end of the budget spectrum. You’ll want to make them great, not only for your clients, but for your own agency reel. This is where IGTHF (It’s Good To Have Friends) comes in.
Production friends, post-production friends, freelancer friends—any kind of friend who is willing to do you a favor is invaluable. We’ve had the good fortune of having some generous favors done for us that we’re looking forward to repaying if we haven’t already.
HSS. Congrats! Now you’ve got some work coming in and you’re a real agency. You might be tempted to make a staffing plan and start hiring your team. But I recommend HSS (Hiring Staff Slowly), if possible.
Unless you have long-term projects or AOR relationships coming in, you may put a lot of unneeded financial pressure on yourself by hiring staff over freelance. Not only are you committing to their salaries, but staff often comes with other overhead expenses like HR, benefits and potentially (bigger) office space.
NBIEJ. If there is one big conundrum when you start an agency—how do you get clients without work to show as an agency? But how do you get work to show without clients? This is where NBIEJ comes in.
“New Business Is Everyone’s Job” means that, especially when you’re starting, everyone has to pitch in on new business prospecting. Leave any humility to the side that you may have had as a staffer and reach out to old colleagues, clients, friends, cousins, neighbors, strangers—anyone who may know someone who knows someone you might be able to work with. It can get discouraging, but you just need one or two to hit and you’re on your way.
In the end, this is just the TOTI (Tip of the Iceberg) when it comes to what it’s like to start an agency, but I hope it sheds some light on what you can expect. There are still plenty of lessons I have yet to learn, but those are for another day. TTYL.
This article is part of an ongoing Voice series that will take a behind-the-scenes look at new agencies in their first year of business. The first article for Bandits & Friends can be found here.