A Mindset Shift That Will Build Your PR Firm’s Value Edited version From “Doing It The Right Way”, 2nd Edition There is a right way to build a firm’s value. There is a formal process that works. The hardest step for most firms is the first and most critical one: shifting the owner’s mindset to…
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Category: Profitability
Charging Correctly For Out-Of-Pocket Expenses
When your PR agency buys items or third-party services for a client, the traditional approach has been to bill them to the client separately as “out-of-pocket” expenses. Often, the agency’s direct out-of-pocket expense is increased by 17.65%, to cover the time and services involved in obtaining the item or the third- party service being billed….
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Managing Your Benchmarks
The key to managing your PR agency to earn a 20% or higher operating profit is to set the correct benchmarks for your key cost and expense categories. To begin, let’s look at some of the basic ratios you’ll want to understand and monitor. How to target your revenue/cost benchmarks: Net Revenue: 100% (Not “Gross”…
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How to Recession-Proof Your Firm
If you’ve been watching the news, reading the papers or listening to the pundits, chances are you may be convinced that we’re already in a recession. My opinion, after a full year of taking the pulse of the industry—via the annual surveys published by Gould+Partners—is that the PR industry will not be facing a recession….
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Good Deals/Great Deals
A ‘good’ deal is when each party feels relatively positive about the outcome. Making each party emerge a winner is the essence of a ‘great’ deal. Often, conceding to the other party what they want will not impact what you want in a material way. I always put myself in the place of the person…
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The Earn-Out Model Works!!
The earn-out model has been the gold standard for the 20+ years that I have been doing mergers and acquisitions. It is a proven, fair model used by all major PR firm buyers from holding company firm buyers to mid-size firm buyers to bolt-on firm buyers. The appeal and benefit of the earn-out model is…
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Compensation: Clients Who Fit the Bill
Healthy client relations are the lifeblood for PR agencies. Every client is unique, of course, with disparate needs, and PR agency owners often must take pains to provide those services, as well as a trust-based relationship. When it comes to effectively serving clients, one size doesn’t fit all. The same holds true for agency billing….
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Psychological Buy-in Critical for Exit Strategy
Amid the dramatic and ongoing changes within the marketing communications industries is the accelerating rate of M&A transactions within the PR field. PR firm owners, including heads of boutiques, smaller shops and mid-size firms, are giving more serious consideration to selling. Many of these owners are products of the baby-boom generation and would like to…
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The Value of Human Capital
The term “Human Capital” is offensive to some. They see it as treating people as material objects. I hope to build a greater appreciation that the character, competence and commitment of a firm’s professional talent has a major impact on its valuation in an M&A situation. That acknowledgement, together with other recommendations, are intended to…
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VIDEO: Millennial PR Firm Owners Carve New Niche
We were chatting with a top PR executive recently when we mentioned the proliferating number of PR firms owned by millennials, or people born between the early 1980s and 2000. The executive—a real pro—expressed skepticism. That’s fine, we said. But we also stressed to this executive to keep a close eye on the space. While…
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Canadian PR Firms Best U.S. Firms on Revenue, Profitability
Canada is celebrated for many things. Maple Syrup, Niagara Falls, and Wayne Gretzky quickly come to mind. Now you can add profitable PR agencies to the list, particularly when stacked up against their U.S counterparts. Net revenue for Canadian-based firms grew a total of 21.8 percent in 2016, according to Gould+Partners 2017 PR Firm Net…
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Webinar: Millennials Eager to Lead, Willing to Learn
Millennials and older PR executives have a great deal to learn from one another. By collaborating more effectively they can bolster the value of their firm, break into emerging markets and land new clients. They just need to put their suspicions of one another aside and not let stereotypical thinking get the better of them….
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