Richard Goldstein

Richard Goldstein

In the course of devising an interesting, relevant column this month, many ideas came to mind but none immediately excited me.

Then I discovered an old newsletter authored by my late good friend, Al Croft, titled “How to Make 2003 Better Than 2002. Apply Basic Business Strategies.” Going through my archives, I came across my columns on managing for prosperity, and it dawned on me to write about managing for prosperity using the ideas taught to me by Al Croft and Rick Gould. Be warned, this is not a one-time column but will be a series. Any feedback from my readers is always appreciated.

From my friend Al Croft and me …

Al wrote about applying basic business strategies 15 years ago. His advice still applies today so here goes!

Update your long-range business plan. Write a plan if you don’t have one. Then follow it. Despite the fact that the agency business continues to be hectic, cloudy and hard to plan for, a good fluid business plan — really two plans; one short range for 2017 and one for the next three to five years – provides a healthy backbone and operating base for your firm.

Develop a realistic budget for your firm based on your best income expectations. Regularly update based on business changes and a flexible SWOT analysis. (This is a study undertaken by an organization to identify its internal strengths and weaknesses, as well as its external opportunities and threats.)

Staffing needs. Based on your expectations and the amount of average income generated per person in 2016, plan your staffing needs for 2017. Evaluate your staff; no need to stick with losers or underperformers. I believe there are good people in the market place looking for the right spot. They might as well be working for you!

Determine the average income generated per professional in 2016. Use this figure to gauge staff needs against projected budgets and evaluate your staff against the average. (I will write more on this in future columns.)

Develop or revise your marketing plan and allocate funds to make it work. Be proactive about marketing your firm. Try and spend at least 50 percent of your time serving clients and the other half managing and growing your business.

Develop/revise and promote a unique strategic position or marketing niche for your firm (digital??). Decide what your firm is or what you want it to be. Build strength in a market niche with good growth potential. Maybe one of the practice areas of PR has undeveloped potential for your firm. Make sure your clients and prospects understand your strengths. It is important to merchandise your accomplishments to current clients as to prospects. Look for ways to develop additional business form current clients. This additional business is much more profitable than chasing after new clients; despite the fact that you must do both.

PR Week in 2002 ran an article that “The most single most powerful, strategic and competitive asset a company has is its brand identity." I disagree, but not by much. In my view the most valuable asset a PR firm has is its intellectual capital. When is the last time your agency strategized its brand identity? Your goal is to stand out so that the right clients choose you for what you do best. You need to specify what makes your agency special and why clients would choose you?

Read your mission statement. Substitute the name of a very different agency that is dramatically opposed to yours — for your name and re-read it. The better your mission statement works for the other agency, the poorer it is. No agency, small or large can exempt itself from the challenge of standing out in the increasing competitive marketplace. Your identity says who you uniquely are and why clients should choose you.

Determine to achieve at least 80-85 percent staff utilization (more on this as well in future columns) this year. Stop worrying about monthly variances; shoot for long range (minimum quarterly) results. (Note industry averages will be given in a future column.)

Monitor write-offs closely, no more than five percent of income if possible. Watch for poor budgeting, over-servicing (more on this coming soon) and/or staff mistakes, the usual culprits for write-offs and less than possible and desirable profits. Train staff to have the professional confidence to stop work, and speak to management, on client projects before they invest more time than the client will be willing to pay for.

Track individual client profitability monthly. Your firm may be profitable overall, but individual problem clients can pull down total profits. Know when and why profitability on any account drops below where you want it to be. Do something about problem clients, even if it means resigning the business.

Check your hourly rates against industry average (more on this as well). Are your rates competitive? Can they be increased? Make sure individual rates are set to make individual employees profitable. Are you charging enough for crisis or client-inspired weekend work?

Again, your feedback is important to me. Hope this month’s column will add to your success!

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Richard Goldstein is a partner at Buchbinder Tunick & Company LLP, New York, Certified Public Accountants.