Expert: Peter Gabany - 2/28/2004

Question
Dear Mr Gabany,

I am an undergraduate student with a passion for business. I consider myself an entrepreneur and look to open my own business someday. I am very eager to learn as much as possible from people with alot of experience in business and was hoping you could answer a questions for me?

After gaining around 3 years experience working for a big corporation or advertising agency, I plan to open an advertising / PR company of my own. I was wondering if you could tell me what the average rates were for small adevertising agencies situated in NYC working on such projects as poster ad campaigns, product imaging, and general advertising account related services? I know that often an agency will hold an account for a firm over a period of time and provide their services whenever called upon, and i unsure as to how the whole pay process worked? Is it a flat fee, and if so how much per campaign or is it a percentage? Obviously i relize that the size of the job will ultimately make the fee differ but if you could just give me an estimate or details regarding the process i would be very grateful.

Thanks

Jack Glazebrook

Answer
Jack,

Your question wants me to reach out and throw you in a choke hold to say “are you crazy”? Three years experience in this business is not nearly enought to launch your own shop. I KNOW I've been there. My Art Director met Bill Cahan of Cahan and Associates and asked him if he should open his own shop. Bill looked over to me and then back at him and said… are you nuts? Do you get to practice design where you are? the AD answered yes. Do you get to create neat work? AD replied, yea all of the time. Do you feel that you are being well paid. Again the AD answered yes. He then stated that he just renovated his offices at a cost of nearly 1,000,000. They have the opportunity to work on some of the best and largest clients in corporate US. Instead he would rather be working for someone than be continually broke.

I beieve he exaggerated but know full well what he was saying. Now if you still want to do your own thing then I urge you to read “Truth, Lies, & Advertising: New Advertising & the Art of the Account Planner”. This book is an indepth focus on the industry and a secret weapon amongst leading small and large ad shops.

There is little point to answer your pricing question above as there is no concise way to answer it. There is however another book… Graphic Artist's Guild Handbook of Pricing & Ethical Guidelines
this book will become your bible.

Please let me know if this helps. Feel free to contact me directly <promote@limelight.org>

Pete