We are, on the whole, a pretty optimistic bunch. The PRCA’s annual benchmark has the MDs surveyed predicting double-digit fee growth. OK, their finance directors often provide a bit of balance, but as we start a new year does that optimism still hold? I’ve been instructed not to make this piece too downbeat, so I won’t spend it all discussing Brexit, but we can’t really ignore the elephant in the room.
What opportunities does 2019 offer, and what can you do to plan for a once-in-a-lifetime political and economic event?
Stash the cash
Tightly run agencies have a good handle on generating and collecting revenue and maintaining profits – all the tougher in an economic downturn that any form of Brexit is likely to bring. Prompt, accurate invoicing, chasing late payments and negotiating the best terms make for a more profitable agency. Having cash on deposit, equal to three to six months of running costs, makes your client negotiations a lot easier.
If an agency goes under, and they’re pretty tough to kill o , it is often the o ce lease that does it. Such large fixed costs require careful planning and as much flexibility as possible built in to allow for downsizing if fees and staffing levels decline. While more expensive per square foot than a traditional lease, serviced offices meet this need.
If you aren’t running programmes with measurable objectives, evaluating the results and using this to inform future activity, you’ll find the choppy economic waters we are heading for tough going. If you aren’t evaluating, start now.
One of the most consistent issues I see with agencies is that they look, sound and behave the same. If your prospects’ budgets are under pressure post-Brexit, you need to make sure you stand out. A robust proposition is the starting point, clear enough to turn o as many prospects as it attracts. When things get tough, you need to focus on where your track record, expertise and knowledge are deepest.
You want to be developing, testing and commercialising at least one new service a year. Ensure that demand is proven before you launch: you probably don’t want to be first to market with a service when demand for PR services is slowing.
It’s worth noting that on the whole, the sector performance follows the economic cycle – but you really want to aim to be the exception that proves the rule.
Everything that I have described here will make your agency financially stronger and help grow your reputation with prospective clients and talent, as well help you handle whatever Brexit may bring.
Richard Houghton is a business consultant: firstname.lastname@example.org