How to Start a Branding Agency Business

Start a branding agency business by following these 10 steps:

1. Plan your Branding Agency Business
2. Form your Branding Agency Business into a Legal Entity
3. Register your Branding Agency Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Branding Agency Business
6. Get the Necessary Permits & Licenses for your Branding Agency Business
7. Get Branding Agency Business Insurance
8. Define your Branding Agency Business Brand
9. Create your Branding Agency Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your branding agency business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a branding agency business?

As a branding agency, clients are looking to you to help bring their message to the public. Therefore, YOUR brand will play an integral role in building your portfolio. Start-up business owners will need to invest in an office space, computers, software, and other creative tools that will help deliver results. Additional start-up costs incurred include office furniture and fixtures, utilities and internet, payroll, and insurance.

What are the ongoing expenses for a branding agency business?

Owners who operate conservatively have an opportunity to generate significant revenue without incurring high ongoing expenses. The following should be considered when developing a budget: 

• Rent and utilities 
• License renewals
• Equipment maintenance
• Investment in the latest technology 
• Website and marketing costs 
• Networking expenses, including travel and client lunches
• Employee salaries

Who is the target market?

In a broad sense, your target market is any new and/or existing business that needs your expertise in developing their brand. To ensure success, however, you will need to carve out a niche for yourself, taking on clients that you identify with in some way. Most branding agencies are hired by small to medium-sized businesses. With a pool of over 30 million to choose from, there are more than enough prospects to build a successful agency. 

How does a branding agency business make money?

Branding agencies generate revenue through the services they offer their clients. Some agencies charge a flat fee based on the scope of the project, while others bill an hourly rate. 

How much can you charge customers?

As previously mentioned, some agencies work on a fee-based schedule, others bill by the hour. Fee-based projects are typically more attractive for the customer, as it allows them to budget accordingly. Business owners opting for this approach are encouraged to carefully consider hours spent and overhead costs to ensure they don’t underbid for a project. 

How much profit can a branding agency business make?

With minimal overhead costs, well-managed agencies have the potential to turn a significant monthly profit. If you work with thirteen clients and charge an average of $2,500 per month, your agency will generate over $32,000 a month (before expenses.) 

How can you make your business more profitable?

Once you have developed a name for yourself, you will want to consider expanding your team and the services you offer. For example, some branding agencies host events for their clients, ensuring the organization’s brand remains consistent in everything they do. 

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your branding agency business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Branding Agency. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Entrepreneurs who are creative and possess an innate ability to understand both the organizations’ and individuals’ goals and needs are best suited for this business venture. They enjoy interacting with a diverse group of individuals and are comfortable delivering a clear and honest opinion of what ideas should and shouldn’t leave the brainstorming table.

What happens during a typical day at a branding agency business?

While every agency operates a little differently, there are a number of tasks that will remain consistent. These duties include: 

• Marketing and networking to gain new agency clients
• Developing pitches to prospective customers and upselling to current clients 
• Meeting with clients to gain an understanding of their branding needs
• Travel for client meetings and conventions
• Researching to identify client target demographics and their pain points consider defining the term “pain points; at first usage. Not all readers may be familiar with this term
• Creative duties, including designing, drawing, and writing
• Administrative duties

What are some skills and experiences that will help you build a successful branding agency business?

While some branding agency owners have found success without a business or marketing background, the skills and knowledge gained from this experience would prove invaluable. Strong interpersonal skills and an innate understanding of the public’s needs and pain points are also excellent skills to possess. Start-up entrepreneurs are encouraged to gain real-world experience before venturing out on their own. 

What is the growth potential for a branding agency business?

According to the Small Business Association (SBA), there are almost 31 million small businesses across the United States. Their success rate relies almost entirely on their brand. Branding agencies who are consistently able to deliver results have significant room for growth, both nationally and internationally.