Design Agency Business Model
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- popovich
Have written a piece here:
http://www.bureau-gesamt.com/en/…The article is pretty chaotic and half-baked, but I always find it very helpful to write things down and then give them a second look.
Any comments on "best practice" in the design business?
- popovich0
To make the long story short: there are some traditional models and some _other_ models of conducting this business:
1. Project based – get a project, execute, move on
2. Retainer based – get a client, set a monthly fee, execute and live happily
3. Involvement (or results based) – set a goal, invest resources-time-cash, evaluate results, get paid
4. Freelance pool – manage a pool of freelancers, find projects or retainers, let others do the job, earn the premium
5. Product based – create a product and sell to the massesHm?
- clearThoughts0
The reality is that this is a shit industry to do business... you should only be in it if you 'love' doing this. Or at least have a bit of passion for it.
Otherwise you might be wasting your time...
- popovich0
Love & passion for what you do should idealy belong to any trade. What's the point of doing anything if you hate it? The only solid reason for me would be "survival".
However I can relate to your point - conducting independendent business is not an easy task. And so I am trying to define the ways to make practicing design business more comprehensive... so that one has time to actually enjoy it. :)
- zoozoo0
"The reality is that this is a shit industry to do business... you should only be in it if you 'love' doing this. Or at least have a bit of passion for it.
Otherwise you might be wasting your time..."I like your frankness about it. I am definitely looking to do something else for money. This career is a disaster.
- monNom0
You forgot the traditional ad agency model of taking a cut from media buys. Creative becomes the loss-leader, as money is made on the spread between the rate your media buyer pays, and the rate your client pays to you. (as I understand it).
That's a business model that scales very well , as you need fewer of the rare talents than in a pure consultancy.
- d_rek0
I am passionate about what I do and don't hate it enough to walk away from it yet. Personally, i'd like to hash out an original IP of some sort and sell it to publishers / entertainment industry for buku bucks.
As for design agency business models... i'm really only familiar with the per-project / retainer based agreements. I think the Involvement and Product-based sound a lot better on paper than they are to turn a buck off of. And you're spot on in your article about the involvement method being kicked around by industry professionals alot but nobody actually implementing that model.
I think as far as what may be the best model largely depends on which one compliments your workflow the best. If you can crank out project work and have it lined up for a good chunk of your future it may not make sense to switch to another model. Or if you have clients who require steady and progressive maintenance (ala web work) then a retainer agreement makes a lot of sense. And so on and so forth.
I guess as far as 'best practices' go it's not that different than other businesses. Customer service is critical. I think a lot of designers / agencies forget this basic tenant of business and go out of their way to create conflict with clientele. Make your clients happy and you will be happy too. Fight with your clients and you might as well shoot yourself in the foot.
- popovich0
@nomNom
The ad agency model you are referring to was this much traditional some time ago. Today most of the mediabuying is handled by media agencies, which, from my point of view, are more consultancies and hardcore traders and less designers or advertisers. I've sat down to talk to someone from the former fame of JWT in Frankfurt. At that time the agency was going strong and everybody was happy. When asked about "how this business is working" he told me that, yeah, they took a quite traditional fee of 15% of the media spendings and that made them rich "but that was 20 years ago".
Those times are over. And as a small agency you have no chance to compete with media-buying giants – where do you get enough cash?@d_rek
Totally right. Customer service belongs to any of those models and is basically one of the aspects one should get right from the very start.
Speaking of involvement model – as I said, Anomaly has been granted this badge of "a new agency model" precisely because they stated that they do it. The question is – do they really? Or was it a PR trick to get things rolling?... However, I think the model might work – it is a matter of guts, resources and measurement methods (which requires some pure selling/handling/persuading skills, which again are absent from the regular designer's skill set).Here is a fresh CreativeMornings video touching on a product-based model:
- clearThoughts0
@popovich what I was trying to say is that for most business people this industry is seen as 'risky' because talent is not reliable and also hard to scale.