THE AGENCY BUSINESS: TateAustin endures downturn thanks to professional advice

Kerry Tate was able to keep TateAustin afloat when the bubble burst in Austin, TX, by seeking help from key professionals and building relationships with firms.

Kerry Tate was able to keep TateAustin afloat when the bubble burst in Austin, TX, by seeking help from key professionals and building relationships with firms.

Kerry Tate knows her strengths. She also knows her weaknesses. Seeking help when she needs it has been one secret to thriving and surviving in the volatile PR market in Austin, TX. Her firm, TateAustin, evolved from Bonner & Associates. Tate joined the firm as a partner in 1985 after founder Cathy Bonner bought it back from Hill & Knowlton. When Ann Richards became Texas governor in 1991, Bonner took over at the Texas Department of Commerce, and Tate bought Bonner's interest in the PR firm. What she bought was a balance sheet and some furniture. Tate and a secretary were the firm's only employees at the time, but Tate saw the value of building relationships with outside professionals. She first found a banker, whom she still uses. Within a couple of years, she'd lined up an accounting firm and a lawyer. "Even though I was going to be small to them, I wanted to have top-notch help, even if I had to pay a premium," Tate says. "From the beginning, we have always had the very best help and very good advice and counsel from people at the top of their game, and I think it's made a difference," adds Tate. By the mid-'90s, Tate began bringing support functions in house. She hired a full-time controller, IT professional, and administrative director. Nine-year TateAustin veteran and two-year partner Patty Summerville handles most HR functions. Summerville puts her management and training background to work for external clients, as well. "I wanted the people who do PR to not have to worry about anything other than what they do," Tate says. She is particularly proud of the agency's accounting system, which her IT manager, controller, and accounting firm developed by using off-the-shelf technology. Employees fill out paperless time sheets, and Tate gets eight financial reports regularly. She rates the ability to track performance goals and review comparative financial history as being among the keys to running a sound business. Building good will is also key, and Tate does that in part through community involvement. She was chairwoman of the Austin Chamber of Commerce in 1996, and continues to work with the United Way, the Austin Community Foundation, and Leadership Austin. This year, she will co-chair the Samaritan Center Ethics and Business Awards at St. Edwards University. The boom brought out-of-towners with different ideas about marketing to Austin, so Tate decided to divest the advertising side of her business. "I thought we were seeing Austin mature as a client market," Tate explains. The techies flocking from California were used to working with separate PR and ad firms, and seemed skeptical of integrated agencies, she says. Tate doesn't regret getting out of the ad business, especially because she didn't have to carry those jobs on her payroll during the recession. She does miss the in-house design capabilities and hopes eventually to bring a creative staffer or two back on board. Hanging on to non-billable employees during the recession wasn't easy. "I had to love them a lot to stay with them," she admits. She began sharing her IT manager's skills and salary with the ad agency next door, she says. "We formed an employee committee on how we would cut expenses," Tate explains. The group developed scenarios for first-, second-, and third-round cuts. "We did round one and didn't have to do the others," she says. "We gave up things like parking and massages. I pay half the parking instead of all of it." The firm also reduced entertainment expenses and renegotiated its office space agreement. Tate laid off only two staffers during rough times and now employs 17 people, a healthy figure for an Austin shop. Perhaps most impressively, TateAustin eliminated its debt in the first couple of years of the dip. "We saw it coming and began to start paying [our debt] down," Tate says. Keeping her advice givers on-board paid off. "My advisers helped on every bit of it," Tate says. "They helped me think about the priorities. We still have our advisers, and we still have our client lists, and the sun's back out." ----- How firms survived TX economic bust PRWeek asked TateAustin president Kerry Tate what common traits were shared by firms that survived the economic bust in central Texas. Her responses included:
  • They didn't have debt. When revenues and margins began to decline and shrink, they could afford it.
  • They had diverse client lists. They were balanced in their client portfolios across industry categories, nonprofit, and government.
  • They didn't panic, whine or lose their humor. That wasn't easy, but it's still so recent and fresh that most folks are still not feeling jovial.
  • They looked around, found other survivors, and clung to each other after the shipwreck. The businesses that were here before the bubble all found each other again after the bubble. They warmly embraced and dusted each other off while still dizzy and said, 'What the heck was that?'

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