You’re a Storyteller First, But Never Forget Your Agency is a Business

Ken Jacobs
Ken Jacobs

As a communicator, you must always be concerned with making sure the right message gets sent. You have to serve your client, shape their content and make inroads with media to share their story. But in all that day-to-day madness, don’t forget that you are part of a business. There is a bottom line that has to be met.

Here are some simple tips, thanks to Ken Jacobs, principal of Jacobs Communications Consulting, to keep in mind while you’re slugging it out in the PR trenches:

1. Get your salary/overhead/profit ratios in line. There's a specific formula here: Do your numbers break down as Salaries/Benefits 55%, and Expenses 25% (of net fee income)? If not, how can you possibly achieve an operating profit of 20% or more?

2. See if your firm is generating its full income potential by using the simplest formula. How much fee income are you generating per PR professional? 

3. Use appropriate billing rates per staffer.  Compare your rates with other agencies in your geographic market and practice areas. The Council of Public Relations Firms makes such data available to its membership, and those in PRSA’s Counselors Academy readily share this information with one another.

4. Monitor how long projects actually take, versus what you budgeted.  While becoming profitable is a science, budgeting is an art. Compare how long you thought a program, project or task would take versus what it actually took.

5. Make your team log their hours accurately. You can’t know what your firm really spent on various initiatives if staffers don’t consistently and accurately record their hours. 

6. Be disciplined when creating new client budgets. Take the time to project how many hours per month each staffer will likely take to complete each task, using their appropriate billing rate. Then, review what it actually took in man-hours on the last three similar projects. Not what you budgeted, but what you actually spent. 

7. Create detailed budgets and written scopes-of-work for every client. This will be essential when a client asks, “This activity is covered by our program budget, right?” 

8. Apply strict rules regarding clients whose activities consistently exceed their monthly budgets. It’s fine to have clients you regularly over-service, so long as you have a strategic reason for doing so, such as helping you break into a new category or giving you the chance to work for a corporation that might ultimately assign you a larger, more profitable project. But determine ahead of time how much time over the budget you’ll provide each month, and decide in advance what actions you’ll take if you consistently exceed your investment. 

9. Meet frequently with clients whose accounts typically exceed their monthly budgets. Per the last point, there’s nothing wrong with strategically over-servicing certain clients. But if you regularly over-service clients who don’t meet your criteria, meet with them to discuss the situation.

10. Do you have clients who’ll never pay you near what you expend on their behalf? If so, and they don’t match the descriptors outlined in point 8, then you have to ask yourself one question: Why?

Ken Jacobs can be reached at

Follow Richard Brownell: @RickBrownell