Apprehension and fear are normal feelings when mulling a new venture, but the ability to set the trepidation aside and take risks may be the most crucial characteristic for those who want to start their own agency.
"Embrace the fact that you are focusing on success and not worrying about failure," says Aaron Kwittken, CEO and managing partner of Kwittken & Company, who left his post as CEO of Euro RSCG Magnet to launch his own shop in 2005. "If you do that, good things happen. You have good outcomes."
Gwendolyn Knapp, who founded Top Shelf Communications & PR earlier this year after serving as PR director at branding agency PriceWeber, reinforces that feelings of uncertainty are normal, but it is crucial to take risks and make the commitment to your agency. After being laid off, Knapp decided to take a client with her and start anew to see what she could do on her own.
A broad skill set and thorough knowledge of PR is vital to running an agency, she says, adding that most successful entrepreneurs should feel confident in their abilities after working in the field for some time.
Filling a void
Common among those who've started their own firm is a desire to do a better job at something or provide a service that isn't already flooding the industry. A specific specialty can help a business blossom faster than it may have otherwise, explains Cathy Renna, managing partner of Renna Communications.
Renna opened her agency in 2005 after serving as media relations director for Fenton Communications' New York office, which succeeded a 14-year stint as GLAAD's news media director. She specifically targeted the LGBT community and worked with small and midsize companies for reasonable retainer fees in order to increase her firm's visibility in that sector.
"We have a very special niche," she explains. "I think that's a big part of why we've been successful."
Mike Paul, president of MGP & Associates PR, shares similar sentiments about taking advantage of a missing service in the market. In his case, it involved forming an agency that only staffs senior-level executives. Paul's preliminary research revealed many clients who were dissatisfied with young staffers working on their accounts.
"When you are first starting out and have only a few clients, what drives you to do more in the first few months is the ability to recognize that there is a market for something that somebody else is not doing," notes Paul, who launched his shop in 1994 after a stint as VP at Hill & Knowlton.
Having a financial background, or at least knowing someone who can help with finances, is crucial when launching an agency. Knowledge in contracts, budgets, and other business basics is very important, Renna emphasizes, because without some level of analytical skills, it can be hard to stay afloat.
"There are people who are excellent workers, but that doesn't mean [they] have the business acumen to start a business, run a business, and, more importantly, go after new business," Paul adds.
Knapp didn't feel comfortable solely taking on all the financial challenges of opening up a shop, so she hired an accountant, which allowed her to focus her energy elsewhere.
"The daunting thing for me is working all the financials," she says. "Just turn it over to someone you trust and with whom you regularly communicate. [That way,] you don't have to worry about a thing."
Even so, while a strong business sense is imperative, starting a PR agency doesn't necessarily have to put a huge dent in the pocket. Knapp was able to start her business with less than $2,000. Like many others, she spent on necessities like a computer, telephone, business cards, and stationary, while working out of her home and building her own Web site in order to keep overhead costs low.
"It's really possible to start your own business in an incredibly cost-effective manner," she says. "What it requires is a little bit of innovation."
Kwittken worked out of his basement and a nearby Starbucks for the first few months after starting his business. He notes that before opening a firm, it's crucial to think ahead about the technology and resources necessary to operate a successful business, including resources clients will expect you to have to secure their accounts.
Quickly acquiring clients is an obvious key to profitability, says Renna, who got off to a good start on that front by bringing two from her prior agency into her new shop. She found that securing clients wasn't a daunting task, especially when equipped with a large arsenal of industry contacts.
"The second word got out that I was on my own, I started getting phone calls," she recalls.
Even the current economic downturn didn't affect Knapp's ability to obtain clients when her agency opened. In fact, she thinks starting a business in the midst of a struggling economy has actually been beneficial because people are increasingly realizing the value of PR as marketing and ad budgets are slashed.
"A smaller shop has a great advantage in tough economic times because it comes down to basic cost effectiveness," she points out.
Hiring the right people
Hiring staff can prove to be one of the more tricky tasks, explains Kwittken, who felt it was a huge challenge to find employees below the senior level. Barbara Bates, cofounder and principal of Eastwick Communications, agrees, saying that hiring took a lot of consideration on her part.
"In our business, [staff is] almost as important as clients," explains Bates, who started her agency in 1991 after a stint as VP at the Benjamin Group. "In order to get and retain the business you want, you need to have really good people. To have really good people, you need to make sure that you're offering competitive salaries, great benefits, and an interesting work environment."
Of course, even with all the pragmatic factors to ponder, the most vital element to starting your own shop is a love for PR and a strong desire to run a firm.
"One thing that people must keep in mind, regardless of whatever venture they start, is you must really love your craft," Kwittken says. "If you do, the outcomes follow."