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How to Structure a Creative Agency

This post is part of a series called Evolve From Freelancer to Agency.
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One of the key decisions in establishing a creative agency is how to structure it. When you’re working on your own, structure doesn’t matter very much. Dividing your workload, even just between administrative work and client work, doesn’t seem to matter overly much when you’re the person who will need to do all of it, no matter what divisions you come up with. But when you may wind up with several people working on client projects and perhaps even an assistant on the administrative side of things, you need to be very clear on who is responsible for what.

The danger of not clearly establishing structure is that you can easily wind up in situations where you need to pay someone for time in which they did no work or did the same work that another person had already completed. Putting a solid structure and clear workflow in place that shows how different tasks pass through your business processes are necessary for an agency to grow.

Who Has the Authority?

This seems like an easy question: it’s your agency, so you’re in charge. But there are some nuances that you need to resolve, even assuming that you’re always going to be at the top of the pile. It’s worth considering, by the way, that you may not always be the big kahuna.

You can reserve the right to go over every single little decision yourself, but that sort of micro-management rarely works out for the best.

Many successful agencies are the result of a partnership — two or more experienced freelancers banding together to take on bigger projects is a relatively common starting point for agencies. In such cases, you need to define your areas of responsibility right off the bat. If one person is in charge of bringing in client work, directing projects, or handling the books, they need to have the authority to make decisions in their area of expertise without problems from other partners. But those partners also need reassurances that one person can’t dominate the agency.

For those people brought on after the agency’s founding, structure will be more a question of responsibility than authority. The person in charge, after all, is always in charge. But you need to make it clear how much authority each person has in her area of expertise. You can reserve the right to go over every single little decision yourself, but that sort of micro-management rarely works out for the best. Successful agencies universally delegate certain types of decisions so that the boss is freed up to focus on the tasks that only he can handle.

If you aren’t already comfortable with delegating decisions (or even entire assignments), it’s a skill well worth practicing. You may still be in the early stages of considering how your agency might run, but make a point of identifying tasks that you don’t have to do yourself or decisions that someone else can make.

As soon as you have someone else working for you, even if you’re just starting out sub-contracting some small part of a bigger project, start practicing handing over a limited authority for that small piece. Delegating is a skill and it is one that every agency owner needs to have.

Your Structural Options

There are several creative companies that have announced that they employ a flat hierarchy — that there are no bosses. It’s an appealing option, but one that is particularly difficult to implement. You need an entire team of people who can handle working under their own direction and if everyone could do that, they’d all be freelancers.

For most agencies, structure and hierarchy is important. You do need to customize your structure to your own preferences and the abilities of the people who you will work with, but there are some key questions that you’ll need to resolve.

  • Project versus piecemeal: The question of how to divvy up the work is first a question of whether you’ll hand an entire project over to one person on your team or if you’ll divide off certain chunks to different individuals.

    Part of this decision will depend on the types of projects you plan to take on and how easy they are to divide up. In many cases, separating out tasks means efficiency, because one person can repeat the same type of work over and over again quickly. But there’s also the question of ensuring that no one in your agency is sitting around waiting on work from anyone else.

  • Communication options: The different communication requirements of an agency depend on whether everyone is in the same office, in the same time zone; or merely on the same planet. How easy communication is for two people in your organization will impose requirements on whether you can have a soft hierarchy, where everyone can get in touch with everyone else, or if communication has to go through channels.
  • Accountability: As the person in charge, you may have to make someone else accountable for a bad decision. It’s tough to do, but putting out clear expectations in terms of responsibility and authority often reduces such issues. You may not need to specify the consequences of a screw-up specifically, but you do need to reduce the chances that everyone in the agency will suffer from such a situation.
  • Client access: If you want to be the sole face of your company, then you have to make all communications with the client go through you. That can be a tough proposition. The alternative is laying out when and where your team can contact clients. In turn, that can mean that you need to train your team to communicate with clients the way you would.
  • Evolution: Your structural requirements when there’s just you and a single other person working for your agency will be very different from what they are when there are five team members, or ten, or twenty. You need to make sure that there’s a mechanism for evolution built into your structure.

Put Everything in Writing

As you’re working out the structure that your agency will run on, take plenty of notes. While it’s tempting to assume that not only will you remember to tell everyone you work with each detail but that they’ll also remember everything, it’s rare that every person at an agency turns out to have perfect recall. Depending on where your agency is based, you may also actually have a legal obligation to put certain things into writing.

  • Contract: With each person who works with your agency, you need to write out a specific contract. For any employees, you need an employment contract that lays out both their responsibilities and their benefits.

    For freelancers and contractors, you need a contract that sets out something similar. This is one time that you’ll find it beneficial to go to a lawyer to draw up the contracts, even if you just get a template that you can use over and over again.

  • An employee handbook: Writing out a handbook for employees (and possibly one for contractors, as well) will save you a lot of work in the long run. Most importantly, it saves you from having to recite all the information included in it to new hires. But a handbook can also protect you legally by making sure that everyone who works for your agency has access to the policies that you make decisions under. That can actually resolve a lot of legal issues, like accusations of an unfair firing.
  • Your own reference documents: You’re going to have a lot on your plate when running a full-fledged agency. Don’t put yourself in a position where you have to remember all of these details — rather, create some reference materials that you can follow. It will save you time and stress in the long run. From a written workflow to an owner’s manual for your agency, don’t be afraid to write your own reference materials.

Check In on Your Structure Periodically

Even after your agency is fully established and things seem to be going along perfectly, it’s important to check how things are proceeding. There may be small tweaks to your system that you need to make — and it’s always best to catch small things as soon as possible.

You may also find warning signs early on that you’ll need to bring in another person: if the structure is solid but things have slipped through the cracks, it may mean that everyone just has too much on their plates. Unfortunately, it may also mean that there’s a bad apple in the barrel. In either case, examining where the problems are can tell you if you need to start hiring (and if you need to let someone go first).

A few times a year is often enough to review how your agency is functioning, at least in terms of structure. Quarterly discussions with each person who works with you, plus a look at how efficiently the agency is completing projects is usually enough to bring any potential issues to light.

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You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.

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