Are you interested in starting a modeling agency from home? If YES, here is a complete guide to starting a modeling agency online with NO money and NO experience.
Okay, so we have provided you an in-depth sample modeling agency business plan template. We also took it further by analyzing and drafting a sample modeling agency marketing plan backed up by actionable guerrilla marketing ideas for modeling agencies. In this article, we will be considering all the requirements for starting a modeling agency. So put on your entrepreneurial hat and let’s proceed.
Why Start a Modeling Agency?
A modeling agency is a fast moving and highly competitive business where normal business hours are not adhered to. Business in a modeling agency is conducted 24 hours a day so as to be able to deal with the pressure of rush jobs and cancellations. Generally, a modeling agency is a business entity that represents fashion models who work in the fashion industry. The agency makes a deal with the head agency and or the model and it is from this they earn their own income through commissions.
Having a career in the modeling agency can be rewarding, both for you and for the models involved. A modeling agency finds work for models that are signed with them by presenting them to photographers, designers and ad agencies. The agency is also involved in helping models develop successful careers, booking jobs, billing and paying the models, this way a model is able to focus on the modeling job and not worry about the business aspect involved.
How Do Modeling Agencies Make Money?
Top agencies work with advertising agencies and fashion designers that have big budgets. This is done by investing money into developing the talents of models. Training, test shoots and layout of portfolios are done for models. A composition photo card and other printed materials needed by the models are also put together.
Afterwards, modeling agencies sign top talents in their company to exclusive contracts in the market. The contract of each model varies in length based on the status and experience of the model involved. When a good modeling agency find work for its models, it makes sure to negotiate top price for them, a commission of between 10% – 20% is then taken from every job that is booked on behalf of a model.
An additional 20% service charge is charged to the client for booking a model by the agency. Typically, agencies make 10-40% on every booking and not more than 20% of this money comes out from the model’s pocket. There are variations in these pricing methods for countries outside the US depending on the law and taxes of the country involved.
Mother agency contract and non-exclusive contract are other contracts that are offered by a modeling agency. A mother agency is responsible for signing up a model with large agencies in the international market while non-exclusive agencies gives you the chance to sign with other agencies that are usually outside certain city radiuses. A typical non-exclusive contract can then last for a period of one to three years while a mother agency agreement can last from five to ten years.
Starting a Modeling Agency from Home With No Experience – A Complete Guide
- The Modeling Industry Overview
The annual estimate for the industry is almost $920 million. There is moderate growth in the modeling agencies in the last 5 years due to the slowdown in the expenditure for advertising during the recession. In 2009, the fall in corporate profit and consumer spending also hindered the corporate demand for promotional campaigns and advertising. In recent years, online entertainment has paved new opportunities for modeling agencies again.
- Interesting Statistics About the Modeling Industry
Report from the Bureau of Labor Statistics puts the number of modeling jobs available within the United States in 2008 at 2,200, showing that models hold a relatively small number of jobs. In 2014, it was estimated that modeling agencies accounted for the employment of about 5,800 workers. A projection of 16% growth is expected in this industry between 2008 and 2016
In the US, the modeling industry is made up of about 3,900 branches of multi-location companies and single-location companies. They both have combined annual revenue of almost $6 billion. Modeling agencies depend on the success of the talents they have in winning auditions and having a steady stream of jobs. Demand in this industry is driven by spending on talent in sports, performing arts and advertising industries.
Small modeling agencies are able to compete successfully when they specialize in a particular location and develop good customer relationships with their clients. Large modeling agencies on the other hand have got advantages because of the relationships that they have with fashion designers, major studios and cosmetic companies. In the US modeling industry is fragmented as the top 50 companies account for almost 45% of the industry revenue.
The modeling agency industry is oversaturated in terms of numbers of models, agencies, stylists, photographers, designers and magazines who are trying to make a break. There is always a constant source of new faces at all times. To further help your business, you need to learn a lot about the industry and understand all aspects of the business to set up your own company. The factors and incentives that make an entrepreneur go into the modeling agency industry is the ability to make good profit. It is a very profitable business because the higher the demand for the services of your models, the more money you will be able to make in this business.
With little start-up capital, you can run this business as the most important thing you need is a professional relationship which is a very important factor in the business. In different parts of the modeling industry, you need to develop contacts because of the highly competitive nature of the business because these relationships will be important for landing good and profitable jobs for your models and also increase your earning power as a business owner.
Starting a Modeling Agency from Home – Market Research and Feasibility
- Demographics and Psychographics
The demographic and psychographic composition of those who need the services of modeling agencies cuts across various sectors and people of different races, colors and from all walks of life. The following is a list of the people and organizations that need the services of modeling agencies.
- Fashion houses that need to promote professional artists and their wares
- Advertising agencies who design and place advertisements for their clients
- Television stations
- In-house advert departments of big companies
List of Niche ideas Within the Modeling Agency Industry That You Can Specialize in
If you are starting a modeling agency, there are a couple of niches within the business that you can choose from as an entrepreneur. Some of these niches fetch you more money than others. Here are some niches / areas that a modeling agency can be specialized in;
- Fashion modeling
- Runway/ catwalk modeling
- Fashion print modeling
- Show room modeling
- Fashion fit modeling
- Commercial modeling
- Glamor modeling
The Level of Competition in the Modeling Industry
To survive in the modeling industry, you need more than just having a good knowledge of the industry, having quality and well trained models. You also need to have the right contacts because the industry is a highly competitive one. Having the right contact is essential because as a new modeling agency, you will find a lot of closed doors if you don’t have a contact within.
There are big time investors in this business such as the likes of Elite and Ford who have a big stake in the modeling industry, but then, there is still enough space to accommodate big modeling agencies and small ones that ate just springing up.
As an entrepreneur just starting out in this business, your main focus should be on contacting the people you know in the business and informing them of your intention to start up an agency. You can also contact photographers, advertising agencies and designers for job. You can then go on to finding the right talent and giving them quality training.
List of Well – Known Brands in the Modeling Industry
Well-known brands in the business not only manage talents, they discover them as well. Even though the industry is a tough one to crack, agencies are on the look-out for something new always. The following is a list of top modeling agencies in the world:
- Model Management
- IMG Models
- Women Management
- NEXT Model Market
- Ford Modeling Agency
- Elite Model Management
- DMA Model Management
- Marilyn Agency
- Premier Model Management
- Storm Model Management
- Model 1 Agency
- Major Model
- New York Model Management
- Wilhelmina Models
- Trump Model Management
- Supreme Management
- Axelle Model Management
- Angels and Demons Model Management
- Bananas Models
- Vision Management Group
Setting up a modeling agency company requires a lot of work. It is a serious business therefore there is need to conduct critical economic analysis to guard against the threats and other risks associated with starting the business newly or investing in such a business idea.
While it is important to get an office in an urban environment and have access to the companies you want to work with, it is pertinent that you should also be a lot concerned as to how to attract clients and get mouthwatering gigs.
Setting and running a modeling agency can be cost effective because you don’t need to keep a large workforce when there is no contract to execute. If you have a good company profile, maintain quality and well trained models and have experience and qualified staff members on your team, you will become a force to be reckoned with and get well-paying jobs
Is a Modeling Agency Worth Starting from Scratch or is Buying a Franchise Better?
There is a possibility of an entrepreneur buying a franchise from successful modeling agencies. You can also go into a partnership with bigger and more successful companies if you want to invest in this industry.
Different factors and incentives motivate people who want to start a business. Therefore you can consider buying a franchise from a successful company that wants to sell its franchise if all you are interested in is making money for yourself. On the other hand, if you want a business that you can have full control of, where you will be able to transfer the ownership to your children and maybe sell the franchise in the future, you should consider setting up your own business.
Possible Threats and Challenges You Will Face When Starting a Modeling Agency
The modeling agency industry is subject to a number of threats and challenges. One of the threats in this business is the problem of discovering new talents to increase your marketability.
The greatest challenge so far is that of scam in the industry. There are several modeling agencies that run illegitimate businesses where scam artists have the opportunity of preying on new and unsuspecting models; therefore you will need to make considerable effort to make sure that your business model upholds a professional reputation. This is because the Better Business Bureau registers complaint against the agencies that are into the practice of carrying out scams and dishonest business practices.
An instance of a modeling scam can happen in a case where a modeling agency claims that it has work but what it really does is try to sell modeling courses and photo-shoot to model hopefuls whereas if you run a legitimate business, you should only make profit through agency commissions.
Scams are carried out due to the lack of regulatory oversight functions, especially in the United States where scam can be carried out easily and sustained. In 2009, a highly-publicized scam was exposed which involved a modeling agency based in Louisville called Models-Today, LLC. It was discovered that this agency had never obtained jobs for models even though they charge the model fees.
Starting a Modeling Agency from Home – Legal Issues
- Best legal entity to use for a modeling agency
When starting your modeling agency, there are various legal requirements that you will need to satisfy. You will need to check with your local city and county government to get the necessary licensing.
There is a need to establish the modeling agency’s legal structure, whether it is a sole proprietorship or a corporation. There are advantages to incorporating your business as you are able to enjoy limited liability. You will become a shareholder in the corporation and you cannot be held responsible for the corporation’s debts. As an individual shareholder of the modeling agency business, your liability will be limited to the amount which you invested in the company.
If you want sole proprietorship of the modeling agency, you will be responsible for taking up all the business liabilities. Therefore personal assets such as cars and houses owned by you as a sole proprietor can be seized to pay off any debt your business might have incurred.
Filing for a Tax Identification Number is also a requirement. There are various types of tax id numbers you can file for and these include the following:
- Federal EIN Number – The Federal Tax Identification number is a requirement for employers, corporations and partnerships as it is used to identify a business entity.
- State Sales Tax Id – The state is responsible for issuing this legal document. It is a certificate of authority that gives your business the authority to collect required sales, use taxes and to issue the appropriate sales tax exemption documents which includes resale certificates that are used for the purchasing of inventory.
- A state EIN Number – This is a state specific Tax Identification Number.
There is also the aspect of offering legal contracts to your models which outlines their responsibilities, access to the modeling agency’s resources and their pay scales. There is a need to hire an attorney who will draft a legal agreement between you and the models and also between your clients and models whenever you have contracts to be executed. It is always advisable to separate your personal assets from the business assets so as to protect yourself because of the litigious society we find ourselves in today.
Catchy Business Name ideas Suitable for a Modeling Agency
To choose a company name for your business, you need a name that is simple and easy to spell so that people can remember it and can easily find your business. Also pick a name that can easily fit into a domain name or a web address.
The following are samples of business names you can use for your modeling agency:
- Honey Pot Models
- Myths Modeling Agency
- Mirage Modeling Agency
- Spotlight Modeling
- Limelight Models
- Flash Modeling Agency
- Visionary Models
- Poise Management
- Sisterhood Modeling
The Best Insurance Policy for a Modeling Agency
To operate a business, you need to have the right type of insurance policies which are required by the industry in which you operate. Having the right insurance can make the difference between a business that is successful and a crippled one because of under-insured and non-insured losses. In the modeling agency industry, there is a need to have a proper insurance in place to protect your business interest.
You need to create a budget for insurance as a matter of importance and for proper guidance on the best insurance policy you can use for your business, it is best to employ the services of an insurance broker. This person will give you the necessary advice after evaluating the risks involved in the business.
Below are some of the insurance policies you should get if you intend to start a modeling agency business:
- General insurance
- Business owner’s insurance
- Professional malpractice insurance
- Health insurance
- Risk Insurance
- Payment protection insurance
- Liability insurance
- Workers compensation
- Bodily injury and property damage liability.
Intellectual Property Protection and Trademark
Consider filing for intellectual property protection if you want to start a modeling agency business. This is because trademark counterfeiting, copyright piracy and patent infringement have become a problem with many businesses. When you file for intellectual property, it protects the business name of your company, the logo and other documents.
To file for intellectual property and also register the trademark of your business, you are required to start the process with the USPTO where you will need to fill an application form. Final approval for trademark is always subjected to review by attorney as required by the USPTO.
Is Professional Certification Needed to Run a Modeling Agency?
It is important to have some form of training for you and your staff so that you can have an edge over your competitors. Though running a modeling agency can look like a very thing to do, but some form of training can make a difference. If you give your staff the right training, the easier it becomes for you to get jobs for the business.
Here are some forms of training that can be advantageous to the success of a modeling agency business:
- Female finishing course
- Female finishing and model course
- Women’s image development course
- Male image development course
- Male modeling & image development course
List of Legal Documents You Need to Run a Modeling Agency
To run a modeling agency business, you are expected to meet the legal documents requirement which is stipulated in the constitution of your country. These are a list of the legal document you are expected to have to be able to set up a modeling agency business:
- Certificate of Incorporation
- Business License
- Business Plan
- DBA business name
- Non – disclosure Agreement
- Memorandum of Understanding (MoU)
- Employment Agreement (offer letters)
- Operating Agreement
- Company Bylaws
- Operating Agreement for LLCs
- Insurance Policy
Writing a Business Plan for a Modeling Agency
In setting up a modeling agency company, one of the first few steps to take is to consult experts who can help you draft a good business plan that you can work with. This is because running a successful modeling agency company requires that a good business plan should be in place. In the event that you need financing for the business, without a business plan, Lenders will not consider for request to get a loan.
A business plan is the blue print that you need to successfully run a business. When you have a workable business plan in place, the trial and error approach of doing business becomes reduced. This way you will be able to manage your business with purpose and precision; what should be done at a particular time and the way to handle challenges, growth and expansion.
In setting up your modeling agency business, you are expected to write a detailed business plan which will pass a reality test if subjected to it; you need to work with the facts and figures and other indices that apply to the modeling agency industry that you intend to set up your business in.
The essence of writing a business plan is not just for the reason of having a business document with which to operate, it acts as a detailed guide on how you can efficiently run your business from scratch. Your business plan should list and cover the strategies that you intend to use in managing and growing your modeling agency business. The general rule of writing a business plan is to try as much as possible to be realistic in whatever you put in the document. Do not over project when putting figures on profit and income. It is even safer for you to underestimate when you are writing your business plan so that disappointment will not set in when reality dawns on you.
The key areas to cover in a business plan should include the following:
Executive summary and Company’s descriptions: you are required to write about the concept of your business, the description of your company, the company’s vision statement, mission statement and where your company will be located and also if you intend to sell out franchise or open outlets in different cities in the United States of America and in other parts of the world.
Other key components which should not be missing in your business plan include products and services offering, SWOT analysis, competitive analysis, marketing and sales analysis / strategies, market goals, target market, costing and financial projection, pricing, expansion and growth strategies, publicity and advertising strategy, budget and start – up capital generation et al.
Detailed Cost Analysis for Starting a Modeling Agency
A lot of expenses will be incurred in order for you to start your own modeling agency business successfully. The location you intend to use as an office will have an impact on the total cost you intend to spend on starting up your business. Therefore, you need to have analyzed and completed your market survey and feasibility studies properly before you go ahead to create a budget and source for funding to finance the business.
Some of the basic cost you should consider towards the actualization of starting a modeling agency business includes the following:
- The Total Fee for incorporating a business – $750.
- The budget for permits, Insurance and license – $5,000
- The Amount needed to rent a suitable office with enough space (Re – Construction of the facility inclusive) – $30,000.
- The Cost for equipping of the office (furniture, filing cabinets, safety gadgets, computers, printers, telephones, fax machines, and electronics) – $15,000
- The Cost to Launch an official Website – $700
- Additional Expenditure (Signage, Business cards, Adverts and Promotions) – $2,500
- Miscellaneous expenses- $1,000
To set up a small scale business, you will need $50,000
For a medium scale modeling agency business, you will need an average of $150,000
For a large scale business, you need up to $2,000,000
- Financing Your Modeling Agency Company
If you want to start your modeling agency business on a small scale, you don’t necessary need a lot of capital to start off. It is only if you decide that you want to launch your company on a large scale, then you will need to raise the necessary start-up capital. Starting a modeling agency company on a large scale requires that you get a good office space, furniture, equipment for the office, budgeted capital for the payment of a minimum of three months salaries and capital for supplies.
In order to be able to finance a business, you should first consider having a good business plan written. If your business plan is good and workable, you might not need to trouble yourself about getting investors, banks and friends to buy into your idea and loaning you the required capital for your business.
The following options can be explored when trying to source for funds to start-up a modeling agency business.
- Raising capital from selling personal stocks, properties and personal savings.
- Raising capital from business partners and investors.
- Applying for loan from banks
- Pitching your business idea and applying for seed funding and business grants from donor organizations and angel investors
- Sourcing for soft loans from your friend and family members.
- Get money from your Credit cards
- Cash advance against the income from your credit card
- Sourcing money through venture capitalists
- Through crowdfunding
Choosing a Location for Your Modeling Agency
It is important to carry out some consultation before choosing a location for your company. If you don’t choose the right location, the business will keep struggling to make ends meet. Though acquiring an office space in a good location might be a challenge but it is very critical to the success of the business you intend to run. A company in a wrong business location will eventually fail and close up the business.
Nonetheless, for you to build a modeling agency company that is successful, you need to get an office space in a good location where you can have access to the companies you will need to be working for. You need to ensure that the office is in a large city where it will be easy for you to make contacts in the media, advertising and entertainment industry. Once you are able to build a successful brand and you become a household name, then you can go ahead and locate your business in any part of the world and still be a huge success.
The following factors should be considered when you want to choose the location for a modeling agency company:
- Style of operation
- demography of the location
- Nearness to other business and services
- Accessibility of the location and parking space for your clients
- The local laws and regulations in the community / state
- Traffic and security
- The building’s infrastructure in terms required to support the high technology needs of contemporary business
Starting a Modeling Agency – Technical & Manpower Details
If you are thinking of setting up a modeling agency business, you should be ready to get the right décor and design for your office, phone lines and furniture as these constitute the basic technical needs of what you should spend your capital when starting off your company.
To get an office space, you might want to consider between renting and leasing an office space to run your business. Your choice will be based on the size of the company and the budget you have to spend on your modeling agency company. You can consider leasing if you have enough money, this way you can work for long with long term planning.
Concerning the employee you need as part of your team, you need to work with the budget you have. Place advertisement in the papers to get the types of models you need in your agency. You also need to get professional trainers who you can engage as full time staff for your company or hire them on a part time basis depending on your budget. Other people you need on your team include the chief executive officer, a human resource manager, marketing personnel/ Business development executive, photographer, receptionist and accountant.
For you to kick off the business, a minimum of 10 employees is okay to effectively manage a medium scale modeling agency. The need can arise for you to hire experts in other fields when you need to carry out some aspect of work in the modeling agency. There is also the option of partnering with other modeling agencies that have specializations in areas you do not have.
The Services Process Involved in the Modeling Agency Industry
The kind of services that a modeling agency business provides will depend on the niche that the company specializes in. usually, the modeling agency sends out model for a “go see” to meet the companies that actually need the models. If the company is impressed, the model gets booked. Afterwards, the modeling agency calls the model for the job, and all the necessary contractual documents are signed and payments details are worked out.
Once this is done, the model is sent out to do the shoot. Once the shoot has happened, you can get your pay from which the modeling agency can take out their commission.
Starting a Modeling Agency – The Marketing Plan
- Marketing Ideas and Strategies for a Modeling Agency
A modeling agency should be ready to carry out its marketing plan by marketing to their potential models first. Then the agency can be marketed to potential clients. This way getting models and finding clients can be less strenuous.
When drafting your marketing strategies and ideas for your modeling agency business, ensure that you have a good personal and company’s profile. This should include the board of directors’ profile and your management team. Marketing of the models and marketing for potential clients can be carried out in the following way:
- Development of model portfolios
- Creating of a composite card with a compilation of your best models
- Holding open calls by placing classified ads in online local talent publications
- Scouting for models
- Advertising for models on the company website or through magazine ads
- Through updates on social media when your models successfully finish an assignment to show your clients that you mean business.
- By informing local media to put word out about your modeling agency
- Creating a company brochure to show potential clients
- List your modeling agency on local directories/ yellow pages
- Advertise on TV and radio stations.
Possible Competitive Strategies for Winning your Competitors in Modeling Industry
It is quite challenging to be in competition with existing modeling agencies that are already in the business; therefore you should carefully think about the kind of people that will be on your management team.
Take time to examine your competitors in the industry and compare your business idea with their own. Find out what your strengths and weaknesses are so you can compare them and see how you can further work on your weaknesses and build on your strengths. Your clients will compare one modeling agency to the other before making their choice. Make sure your company is the one chosen by offering them the kind of service that they can’t refuse.
Conclusively, you can form partnerships with other modeling business agencies in the industry so as to have an advantage over your competitors. This way, your company will be well positioned to get more gigs for models.
Possible Ways to Increase Client Retention for your Modeling Agency
Customer satisfaction is one way of retaining customers no matter what business you are engaged in. Good customer relationship management practices will keep your clients patronizing you above other competitors. The key is satisfying your clients with the services you render to them.
Clients will look for other sources to get their services if they get poor service. This is one of the major reasons why businesses lose their clients. When you keep improving on the quality of the service you deliver, then your customer won’t drop your services to engage your competitors.
Good customer relationship practices never fail to keep clients. You can achieve this by keeping a proper database of your client or buying CRM software to keep up with your client. With this you can have the relevant information about your client so as to keep in touch with them. You can send your client greetings on public holidays, anniversaries and birthdays. Other necessary company information can also be passed on to client through this channel.
Strategies to Boost your Brand Awareness and Create a Corporate identity
The caliber of clients you have worked for in the past and the types of gigs your modeling agency has been able to handle is important for the branding of your business.
Engage the services of a consultant to help you put in place a roadmap for publicity and advertising geared towards your target market. Make your communication clear and ensure your brand is visible. Have jingles done and other publicity materials to help you with the building of the brand for your company.
Brand awareness can be achieved by leveraging on the following platforms:
- Send introductory letters with a copy of your company brochure to the media, advertising agencies and other clientele that uses the services of a modeling agency.
- Advertise your company in websites and magazines
- List your business on local directories / yellow pages
- Promote your business on satellite TV and radio stations
- Engage in direct email marketing
- Use the social media to give updates about your companies services
- Brand shirts for your company that workers can wear and also brand the company vehicles
Creating a Suppliers / Distribution Network for your Modeling Agency
There is room for networking in the modeling agency industry because a lot of different professionals from various fields have to work together to get models and also get them prepared to get gigs from the various clientele.
Forming alliances with other modeling agency companies is very important in this business. This way, you can be able to deliver work in other niches for your client. Take for instance if you are a modeling agency in the commercial modeling niche and you need to supply runway models, by forming a partnership, with a company in this niche, you can make it happen.
Tips for Running a Modeling Agency Successfully
The success behind running any business successfully lies in making sure all the workers work in harmonization by staying true to the vision and the mission of the company. This is important to achieving success in the organization.
The main responsibility of the president of a modeling agency company will be to steer the company in the right direction. Make sure to take part in staff meetings to keep abreast with the happenings in your company. Hold these meetings as regularly as possible because the feedback from it is pertinent to the success of the business.
On a regular basis, carry out performance appraisals to determine if the staff are adhering to the laid down standards of the company and use the feedback to correct any errors in their duties. Give your staff on-the-job trainings to help them carry out their duties effectively.
In conclusion, praise your staff if they do things right, praise them one-on-one and praise them in front of other staff to boost their morale. Also, keep an open door policy to encourage your staff to be honest with you and reward hardworking staff to make sure there is healthy competition in your company.