Here’s a business that many people don’t think about because it sounds too complicated, but operating a home-based ad agency can be operated by just about anyone. Get the inside secrets on how to do that, based on my past 35 years of ad agency ownership (I’m now semi-retired and working as a magazine feature writer).

The type of ad agency I’m discussing in this article is a basic print advertising-oriented agency business. In this simple agency business, you’ll provide local businesses a resource to create ads and submit them to newspapers and magazines. You may also design and print brochures, catalogs and similar printed materials. Of course, there are many ways to expand this business once you’ve established a basic agency. What you’ll need to know:

Some basic advertising knowledge is necessary. By this I mean, you should have a general understanding of how advertising is used by businesses to sell their products or services. If you don’t have a creative background, so you can design ads for your customers, search the Yellow Pages in your local phonebook for Commercial Artists or Freelance Artists. In addition to a local talent search, the Internet provides a wealth of resources at very reasonable cost to get excellent freelance help.

Aligning yourself with these resources is mandatory in order to produce ads for your clients. You’ll also need copywriting sources that you can find the same way you find artists. Of course, if you have the ability to write your own copy and design your own ads…that’s a huge advantage. Doing your own work means you keep all the money! How you make money: In this simple ad agency business, your profit comes from two sources: When you create ads, brochures, catalogs or any printed materials you will get paid for your creativity and the production of the materials. Most agencies quote flat project prices to clients based on their estimate of the number of creative/production hours needed to produce advertising.

Depending on your skills and local rates for creative services, you can expect to be paid between $35 - $200 per hour, or more. When you place ads in newspapers and magazines for clients, you will earn the standard 15% ad agency commission on each ad each time it runs. Publications have two ad rates: Retail and Ad Agency.

If your client placed their own ads they would pay the Retail Ad Rate, while recognized agencies pay the Ad Agency rate that is 15% off the Retail rate. If you graduate to a larger ad agency and can offer clients TV and Radio commercials as well as Internet advertising services, then your production profits and commissions grow considerably.

The one thing to understand about running an ad agency is that those commissions you earn from placing advertising for clients are residual. If you create an ad that runs in every issue of a publication, you’ll earn a commission each time the ad runs – while you’re working on other projects and business development or just taking some time off for fun.