Talent agencies exist to give people representation in negotiations. Celebrities have agents to help book gigs and secure contracts. Your role as an agent is to basically be the middle-man between your client (the talent) and other people. If you do your job well, both you and your client will get paid a lot of money.
It’s a business idea with a lot of promise. Equally, many things can go wrong and make your whole plan fall through. If you’re going to set up a talent agency, there are some rules to follow:
Choose what ‘talent’ you will represent
Talent is a vague word that’s basically only used because it loosely describes a large group of different people. In this industry, anyone can be considered ‘talent.’ Actors, singers, football players, tennis stars, even social media influencers all fall under this bracket.
Now, it’s tempting to open a talent agency that looks to represent as many people as possible. However, the needs and demands of an actor are wildly different from those of an influencer. Therefore, you need specialist knowledge of each area to be able to provide a top-quality service. This is too difficult for many people, which is why lots of talent agencies fail. Instead, select one, possibly two, areas to focus on. If you do choose more than one, then make sure they fall under the same general area. For example, a sports agency that represents football, rugby, and tennis players.
By narrowing down your target market, you can devote more time to focusing on that specific area and becoming an expert with lots of great contacts. It might seem like you’re missing out on potential clients, but the truth is this can lead to more clients in the long term.
Well, think about it this way. If you offer a generalized service, you have to deal with clients in all different industries. There’s no way you can handle all of the different nuances as effectively as possible. Therefore, your service drops below a high standard. As a result, clients leave, negative reviews fly in, and people know to avoid your agency.
On the other hand, specializing in one field lets you understand all the inner workings of an industry. You grow contacts, you know how things move in this industry, and it creates a much better service overall. As such, clients stay, positive reviews flow, and more clients are soon signing up.
Work with industry experts
You can try to set up your talent agency alone, but it will be a challenge. Unless you have experience in this line of work, you’ll need some help. You’ve got the business brains, but you need someone with a rich knowledge of your chosen industry. Look at Daniel Taylor as a prime example of this in action. He set up a talent agency for footballers and sought the help of ex-professional footballers to run the business. This means there’s someone with first-hand knowledge of the industry helping negotiate deals for players, etc.
Consequently, working with industry experts can provide you with better insights on how to take care of your clients. Particularly if you work with people who have been in their position before. This lets you know how they might be feeling and what you should say to them to stay on their good side.
Similarly, it can help when dealing with other people, agents, or companies in the industry. Your expert can tell you what to expect, and how to approach negotiations. Not to mention the fact they could have contacts that can be a valuable addition to your network.
Funnily enough, that brings us to this next point…
Build your network
Networking is vital for every single business out there. The more people you know, the more successful you tend to be. Networks let you form professional relationships that can benefit your business and your clients. If you want to survive the first year of your business, then you need to establish and build your network.
The need for networking is even greater with a talent agency. When you think about it, your whole livelihood depends on having a network. You need contacts to seek out new job opportunities for some clients or to find potential sponsorships. Every talent agency should have a list of contacts that continues to grow.
Set your rate
How do you make money from a talent agency? It’s simple, you take a percentage from deals that you close for your clients. Let’s say you have a talent agency for influencers and you manage to bag a brand deal worth $500,000. A pretty big deal and your cut is 10%, meaning you earn $50,000 from that deal alone.
Of course, you also have to factor in distributing money to employees, and so on. The main issue is how much you should charge. What is considered a good rate for a talent agency? Demand too much and nobody will be interested. Take too little and you’ll barely make any money at all.
There really isn’t a ‘perfect’ rate that you can slap onto your service. Much depends on the industry you’re working in, your experience, and your rivals. Let’s say the average rate for talent agents in Hollywood was 10%, but the average rate for a football agent was 5%. These figures are completely made up, but they exist for demo purposes. Now, if you charged 10% as a football agent, you’d better be able to back that up with a ridiculous service that makes you twice as good as the average agent. But, if you charged 10% as a Hollywood agent, it would be normal.
You see the point, so be sure you do your research to see what talent agents tend to charge in your specific line of work.
Over time, you can make a lot of money with your talent agency. What starts as a small enterprise can grow with multiple agents making more money for you. To ensure you start on the right path, follow the advice above.