Close-Up: Viewpoint - An insider's guide to launching a new agency

2007 has kicked off with a bumper crop of new agency start-ups. The AAR's Martin Jones offers advice on how to get it right.

Having seen one or two actual and potential start- ups in my time, and importantly clients' reactions to them, there are a number of observations I would offer on what might make your venture be talked about in the same breathy tones as a Clemmow Hornby Inge, Miles Calcraft Briginshaw Duffy or Beattie McGuinness Bungay.

Observation number one: You really have to want to do a start-up. Outside the principal meeting room at the AAR offices are approximately 180 feet of shelving containing brochures and reels on advertising agencies. Starting with Abbott Mead Vickers BBDO and finishing with Wieden & Kennedy, it contains agencies of all sizes, purists and integrated, representing the most competitive advertising market on the planet. Whenever I meet up with someone who is thinking of starting their own agency, I let them linger by these shelves to take in the magnitude of their future competition. Some find it exhilarating; others come to the sudden realisation of what they are letting themselves in for.

Starting your own agency can be the most exciting and rewarding thing you can do. But, if it isn't something you really want to do, don't do it. It is not something to undertake if your heart isn't in it or because you couldn't find the job you wanted in an existing agency.

Build a team

My second point might sound obvious, but you should know and, ideally, like each other.

Clients buy teams of people that get on with each other. While this is becomingly increasingly true of all agencies, it is absolutely essential for a start-up. The two principal reasons that clients are attracted to start-ups as a species are, first, hunger and, second, team spirit. If they get a sense that you are three (or four) individuals rather than a team, they will almost certainly walk away from you. The risk of what happens when you don't get on will be too great for them.

A good planner will be an essential part of your team. Getting one on board from the start is ideal, but since they tend to be the most conservative of all the representatives of the key disciplines, you might have to wait a little while before you find the right one. Not having one will, however, make you look like a creative consultancy rather than a fully rounded agency. "We're all strategic" is not really an acceptable answer when clients ask where your planner is.

Badger everyone you know

One of the things that often surprises start-ups is the goodwill that they receive. In the first 18 months, a lot of your business will come from former clients and colleagues who are keen to find you a project or a pitch to help out. Equally, colleagues in media agencies will get a warm feeling if they can give you a helping hand by pointing a client in your direction. Don't be proud. Make the most of it. Network like hell and make sure that all those old contacts know you are open for business.

It also helps if one of the founders has a new-business background. You only have to look at Johnny Hornby and Helen Calcraft to know it will pay dividends.

If you have ever run a business, particularly a small one, you will know the importance of cashflow. You may be the most talented and hungry group of individuals, but unless you've got great commercial and financial advice behind you, it may be all for nothing.

Would HHCL have been half as successful without its financial director, Robin Price? Would Mother have succeeded without Matt Clark? Probably not.

Get a hands-on creative

You will need a creative partner who is happy to do the work as well as manage a department.

While clients understand that most start-ups can only showcase work that was produced while its founders were at their previous agencies, the one question that they always ask is: "Who actually did the work?" You may have a creative director on board with a fantastic reputation for bringing on creative talent and getting that extra 10 per cent out of a script, but that isn't what the client is looking for. Your creative director's reel needs to be work they created themselves ... ideally within the past five years.

What do you call yourselves? There is no answer. First of all, ask yourself, what do you want to convey by your name? Are you going to call yourselves Thrimble, suggesting a highly creative agency, not reliant on names or egos; or Smith, Jones & Williams, thus suggesting that the client will have the chance to talk directly to the principals who will really care about you as a client. Neither route is wrong, although if you are going for the names over the door, make sure that yours is one of the first two. Say any agency's name and see how often you shorten it to the first two surnames.

Assume the worst

Advertising is full of eternal optimists. It is one of the things that makes the industry so infectiously positive and upbeat.

Start-ups, for the most part, are built on an assumption that everything will go according to plan. Sometimes, however, having won a new account and staffed up, the new venture will lose the account through absolutely no fault of its own. Unforeseen takeovers or changes in client management can undermine any relationship.

I remember when CHI won the Safeway business shortly after setting up. It was a great coup, but could have been its undoing when, having invested in new staff and technology, Safeway was bought by Morrisons, which promptly moved the account to its incumbent agency.

Follow Geoff Boycott's cricket advice: look at your team score and take two wickets off to give you a more realistic appraisal of your situation. Although slightly dour as a perspective, it is not a bad one to have, particularly in your first two years.

One mistake start-ups make is thinking they have to be different. They don't. There are very few USPs in the advertising business, except for the people. Most clients don't want or need you to be different; they simply want you to be good at what you do and to be the sort of people with whom they would like to spend time.

Equally, don't think you have to be good at everything. As long as you know someone who can, don't worry that you don't have in-house digital or direct marketing capabilities. Win the business on what you are good at and the rest will follow.

Plan ahead

Observation ten: Start thinking about years two, three and beyond. During your first 18 months, a lot of opportunities will come from people with whom you've worked before. Unfortunately, that will eventually come to a halt as a) all your contacts have given you the opportunities that they can and b) someone else has replaced you as the new kid on the block.

Before this happens you need to start thinking about how you are going to survive in the real world. While new-business people (and strategies) might be considered a luxury in your early days, good ones will become a necessity as you mature as a business.

- Martin Jones is the director of advertising at the AAR.