Adding Value to Your PR Agency Through Benchmark Analysis
Edited version From “Doing It The Right Way”, 2nd Edition
What is the easiest pathway to maximize PR firm value? The answer is simple: Get to the mark of 20 percent operating profit, known in the M&A world as “Recasted EBITDA.” But how do you go about reaching this milestone? One proven method for understanding and effectively managing (and growing) a PR business is using financial benchmarks.
How Does Benchmarking Contribute to Increasing Agency Value?
Fundamentally, benchmark analysis is the process of calculating comparisons among specific pieces of information readily available on your agency’s balance sheet and P&L. While the numbers themselves are highly important, with benchmark analysis, you can quickly look at relationships between key numbers and make a solid analytic assessment of your agency’s financial health.
You can use benchmark analysis to examine your PR agency’s current performance—now and in comparison to past periods. You can also use benchmarks to compare its performance to that of other companies, such as your competitors or other companies that are doing extremely well. Note that it is not necessary to calculate ratios to more than one decimal place. They need only be accurate enough to prove useful to you.
In short: the benchmarks you calculate may reveal broad trends that can help with your decision making. Knowing the key ratios and their benchmarks gives PR agency management the tools to fine-tune financial operations in order to increase overall net worth and value.
How to Obtain an Accurate Benchmarking Analysis
Working with an experienced public relations consulting firm to secure a benchmark analysis is one of the best things you can do for your agency. An agency like ours has access to decades of surveys and analyses. We know the ins and outs of the industry, understand current (and past) industry trends, and are well equipped to assess how your firm measures up against its competitors.
Learn more about the benchmarking audits we offer here at Gould + Partners.
More About PR Agency Benchmarking
Interested in delving deeper into the realm of benchmarking for your PR agency? The following resources are a good place to start:
Benefits of Benchmarking Audits for PR Firms: Learn more about what a benchmarking audit is, how the benchmarking process works, and find out how it can benefit your firm.
Managing PR Firm Benchmarks: Find out how to set and manage target benchmarks for your PR agency.
Best Practices Benchmarking Report for PR Firms: Gain access to benchmarking data related to PR firms as well as best practices for agencies developed based on our interpretation and analysis of current industry trends. This is an incredible resource for PR firms looking to build value.
Ready to Build Value Through Benchmarking?
To ensure success with benchmarking, you will need someone with the skill set to give you accurate and timely information in order to inform your decisions. After pioneering the concept of benchmarking for the PR industry – and with more than 30 years of experience with in depth benchmarking surveys and analysis – Gould + Partners is well equipped to help you take your firm to the next level.
Get in touch with us today and find out how we can help you boost your agency’s profitability through benchmarking.
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