Creative Agency

How Profitable Is A Creative Agency? (Updated for 2024)

Pat Walls

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Updated: October 9th, 2024

How Profitable Is A Creative Agency? (Updated for 2024)

So you want to start a creative agency?

And the first question that came to your mind was, “well, are creative agencies actually profitable?”

With a market size of $320B - there’s plenty of business to go around.

Especially considering:

You could start a creative agency with as low as $19
Based on our data, creative agencies generate an average of $171K per year
You could see gross margins as high as 95% with creative agencies

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a creative agency.

Let’s dive in!

Is a creative agency profitable?

Yes, a creative agency is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $171K per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your creative agency.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your creative agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a creative agency worth it?

If you’re wondering if a creative agency is worth it, the answer is a big YES. With creative agencies, you have the potential to earn $171K per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $320B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a creative agency to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful creative agencies case studies.

Examples Of Profitable Creative Agencies

Here are a few examples of profitable creative agencies, and a few more details about them:

1. Above 8000 Creative ($120K/year)

Mimi and Delaney, the founders of Above 8000 Creative, came up with the idea for their business after realizing the demand for affordable and high-quality branding services for small businesses. They used their experience in graphic design, photography, and content creation to offer a full-service creative agency, helping other businesses stand out in their industries. With word-of-mouth referrals and targeted outreach on platforms like Instagram, they have successfully attracted and retained clients, leading to profitability and future growth.

Is it profitable? Yes
How much money it makes: $120K/year

How We Went From Side Hustle To Profitable Agency

Above 8000 Creative is a successful creative agency started as a side hustle by a husband and wife team, specializing in graphic design, website design, photography, content creation, and Instagram marketing, and has grown to include many clients and services due to word of mouth referrals.

Read this case study

Read by 5,385 founders

2. RedTedArt ($264K/year)

Maggy Woodley, the founder of Red Ted Art, started the blog as a way to make some extra income while staying home with her kids. She initially tried selling pop art canvases but discovered a love for blogging and crafts. Through dedication and perseverance, she built up her blog and now earns a full-time salary through various revenue streams such as automated adverts, pre-roll ads on YouTube, and sponsored projects.

Is it profitable? Yes
How much money it makes: $264K/year
How much did it cost to start: $0

How This Mom Started A $22K/Month Blog With Easy Crafts For Kids

Discover how Maggy Woodley built Red Ted Art, a crafts blog that now generates $22k per month through various revenue streams, including automated adverts, sponsored projects, and publishing books, all while keeping the projects accessible and easy to replicate.

Read this case study

Read by 5,248 founders

3. Comprende ($103K/year)

Danny Miró-Chinea noticed an untapped market for promoting Latino-owned businesses and combating their underrepresentation in the media. Fueled by data showing U.S. Latinos have a $3.2 trillion economic output, he launched Comprende, a media and consulting agency, growing it to $8.6K MRR and aiming for $10K by year's end.

Is it profitable? Yes
What's the gross margin? 95%
How much money it makes: $103K/year
How much did it cost to start: $19

I Built An $8.6K/Month Media Agency For Latinos

By leveraging a $19 investment and clever use of newsletters and social media, Comprende is on track to hit six-figure revenue and boasts an impressive $8.6K MRR, showing aspiring founders how low-cost, high-impact strategies can rapidly scale a niche-focused media and consulting agency.

Read this case study

Read by 5,638 founders

Learn more about starting a creative agency:

Where to start?

-> How much does it cost to start a creative agency?
-> Pros and cons of a creative agency

Need inspiration?

-> Other creative agency success stories
-> Marketing ideas for a creative agency

Other resources

How much can you make with a creative agency?

With a creative agency, you can make an average of $171K revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $19. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a creative agency make a week?

Based on our data, average weekly revenue for a creative agency ranges around $3.56K. As such, you could see monthly revenues of $14.2K.

To know if your creative agency achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your creative agency.

How much do creative agencies owners make?

The income of a creative agency owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established creative agency is about $3.56K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a creative agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Creative Agency Profit Margins

Generally speaking, a creative agency can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a creative agency, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, creative agency owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, creative agency owners can ensure long-term sustainability and profitability for their business.

Creative agency owner salary

The salary of a creative agency owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established creative agency, in a prime position, might see an average weekly salary around the ballpark of $3.2K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a creative agency may be a promising business to start - but the success of your creative agency mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable creative agency.

Part of

Starting A Creative Agency: Everything You Need To Know

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