How profitable can owning an Advertising Agency be? Find out

Are you eager to kickstart a side business in 2023 that can generate steady income without consuming all your time? Look no further; consider launching your very own Advertising Agency.

Understanding Advertising Agencies:

In simple terms, an Advertising Agency is a service-based business that assists other businesses and individuals in promoting their products and services online, in exchange for a management fee.

Picture this: You’re the Advertising Agency, and a business like Coca Cola needs to boost their online presence to drive sales. Your role? To help them achieve just that, and they compensate you with an agreed-upon service fee.

While landing a client like Coca Cola might be a rare occurrence, the concept holds true for a wide array of businesses.

The big questions remain:

1. Why Does This Business Work?
2. Why Will Companies Pay for This Service?
3. Why Can’t They Do It Themselves?
4. Why Are They Not Already Doing It?

To answer these questions, let’s dive into a scenario:

Imagine Mr. Francis, who runs a fashion outlet in Aba, Nigeria. He sells exquisite Caftans and Suits for a fixed price of 30,000 Naira, with production costs totaling 22,000 Naira per outfit, leaving him with a profit of 8,000 Naira per sale.

Now, you step in and persuade Mr. Francis to expand his market to Abuja, a city far from Aba. How? By utilizing online advertising to reach his target audience. You convince him to sell at a higher price of 50,000 Naira in Abuja, considering their stronger purchasing power.

To prove the effectiveness of your service, you propose a two-week trial for a fee of 20,000 Naira. Mr. Francis agrees.

In just two weeks, your online advertising campaign reaches 28,000 men in Abuja, resulting in 100 serious inquiries via WhatsApp. Ultimately, 5 individuals make purchases at the fixed price of 50,000 Naira each.

Mr. Francis’s total sales amount to 250,000 Naira, and his production cost remains at 110,000 Naira. After subtracting the 20,000 Naira spent on advertising, his profit stands at 120,000 Naira.

Considering the remarkable results you’ve achieved, requesting a 50,000 Naira fee from Mr. Francis seems entirely reasonable.

Now, envision having five clients similar to Mr. Francis, each paying you 50,000 Naira monthly for your services. That’s a solid 250,000 Naira per month in your pocket.