We may be in this midst of a recession--or, at the very least, a very unstable economy--but you wouldn't know it based on the ever-growing number of small PR agencies that are
giving the Edelmans and Fleishman-Hillards of the world a run for their money--literally.
Regardless of the reason (most likely there are too many of them to count), everything from multi-national corporations to budget-strapped nonprofits are tapping small- and
mid-sized firms with very nuanced specialties to spearhead projects and lead campaigns. The inside joke? Most of these shops were (or still are) operating out of spare bedrooms,
garages or rented office space, and they were born out of one person's (some might say crazy) desire to go out on his/her own.
Well, judging from the success of many of these upstarts, maybe their founders weren't so crazy after all. But, for as many success stories as there are in the PR space, there
are twice as many tragedies. To avoid a tragic demise before you ever really got started (or, to decide if that two-man operation is worth giving new business), make sure the
following steps are taken before the shingle is hung.
*What were you thinking??? "Before you do anything, you have to take a step back and ask why you want to go out on your own," says Kimberly Sundt, founder of KBS
Communications, whose clients include Loews Hotels. "If it's just because you want to be your own boss, that's not a good reason. Before you decide if you are ready,
you have to know why."
*Who am I? It's the quintessential existential question but, from a business perspective, the answer will be the key to your success or failure. Because competition for
clients is fierce, you have to have a clear identity for your business from day one.
"The number-one problem is points of differentiation," says Steve Cody, managing partner and co-founder of Peppercom. "Are you going to be the low-cost provider? The
high-end solutions consultant? Whatever it is, figure it out from the get-go."
Sundt recommends taking market research into account when defining these points of differentiation.
"You have to find out if there really is a need for what you want to do," she says. "Find out who is doing what, and who isn't."
Of course, these points of differentiation also must be informed by your personal strengths and what you can bring to the table. Do you already have a reputation in your field?
And, most important, how big is your professional network?
"In public relations, you need a great Rolodex," says Sabrina Horn, founder of Horn Group. "You need a network of people who can help you."
*Details, details. Having a vision and a mission is huge, but you can't launch anything into the world without a foundation; the logistics, if overlooked, can turn into
a proverbial nightmare.
"You need to establish everything from banking relationships to lines of credit, to logos and stationary," Cody says. "You need to set up your accountant, your lawyer, your
insurance policies. You need your own phone number, preferably one that is memorable. You have to buy a Web site."
Of course, Cody's checklist could go on and on to include a business name (one that is legally incorporated or made into an LLC), a logo, stationary design ... you get the idea
(for a starting point, see the checklist sidebar).
*A place to hang your hat. The Internet enables agencies to exist "remotely" (read: in cyberspace only) in their most embryonic stages, but office space becomes
necessary very early on to enhance credibility and reinforce legitimacy. As for where that office space should be, though, is a point of contention.
"If you are going to start your own company, do not do it out of your apartment if you are interested in succeeding," says Cody, who, along with partner Ed Moed, had Peppercom
operating out of an apartment in New York City for its first three months of existence before realizing that was inhibiting them from getting clients.
But, on the flipside, home offices can work for some people--Sundt, for example. However, there is one key difference: Sundt is a lone ranger who has no plans (or desire) to
develop a staff or offices in multiple cities; Cody and Moed, on the other hand, had a different business plan, one whose development plan largely depended on growing the staff
size.
*Friends close, enemies closer? The old adage has special meaning to PR professionals looking to start their own firm, especially given the fact that many will do so
immediately after leaving a post at a big agency.
Before committing 100%, determine if you are going to have clients from the get-go (taking all non-compete clauses into consideration--that's another place your lawyer will
come in) or if you are starting from scratch. If the latter is the case, follow Cody's lead.
"If you don't already have clients, you need to put together your 'hot list'--50 to 100 companies you want to go after. Ed and I were like boiler room brokers, just smiling and
dialing," he says. "But more important, I literally went to the CEOs of the top 10 PR firms, took them out for drinks and asked them to recommend [Peppercom] to any business they
had to turn away. That first year, we got a lot of business that way."
*Get organized. "You do have to be an organized person, because you're doing it all," Horn says. "You're the CEO and the assistant."
That said, you have to have a structure in place for how you plan to grow a staff, if that's what you are looking to do.
"You're never going to grow if you don't start freeing up 10-15% of your time in the first few months to go out and get new business," Cody says.
At the very least, set yourself up with a bookkeeper to manage invoices and take care of accounting, and go from there.
*Commit to committing. Of course, best practices for starting your own communications-based agency--or any business, for that matter--could fill encyclopedias; this is
only the tip of the iceberg. That said, everyone seems to agree on one thing that is central to succeeding.
"It's not for the faint of heart," Horn says. "It is a 24/7 commitment, sometimes at the expense of your family and yourself. That said, sheer force of will can make something
happen. You have to be persistent and never take 'no' for an answer. The squeaky wheel will eventually get the grease." PRN
CONTACTS:
Steve Cody, [email protected]; Kimberly Sundt, [email protected]; Sabrina Horn,
Checklist
These are must-haves when preparing to start your own shop:
- A mission statement
- A tax ID number
- A corporate bank account
- A lawyer
- An accountant
- A name (one that will stand the test of time)
- A marketing plan
- A robust Rolodex
- A phone number (that isn't your home phone)
- A Web site whose domain name is the same as that of your company/agency (or, if unavailable, as least some derivation thereof)
- Business cards, letterhead, e-mail signature line, logo
- Invoices
- A billing structure
- A plan to grow (both in terms of number of clients and employees)
- A lot of free time
- A willingness to have no life for an indefinite period of time