Small Firms, Big Issues

Article excerpt

SMALL FIRMS, BIG ISSUES

Public relations firms of similar size--in fact, of all sizes and configurations--have always had a great deal in common. They're all concerned with the bottom line, recruiting, training and retaining the best people, better serving clients, selling more cost effectively, charging realistic fees, increasing staff productivity, working successfully with the media and other influential publics, selling and using research, automating, motivating staff to fill out accurate time sheets, improving cost controls and collecting overdue bills, to name a few.

Nevertheless, in informally surveying 15 owners of small to mid-sized firms recently, I discovered that there are major differences in outlook and modes of operation, even among entrepreneurs in this size range. These counselors, scattered all over the country, have decidedly varied opinions on management issues ranging from controlling growth, to diversity vs. specialization, to the impact of mergers.

The owners/executives interviewed are Don Bates, APR, The Bates Company, New York; Sheila Donnelly, APR, Sheila Donnelly Associates, Honolulu; Alice Dykeman, APR, Dykeman Associates, Inc., Dallas; Gwinavere Johnston, APR, The Johnston Group, Denver; Peter Klute, APR, Klute Communications, Scottsdale; Paul C. Luongo, Paul C. Luongo Company, Boston; Dennis Madigan, APR, The Ken Schmidt Company, Milwaukee; Waltona Manion, APR, The Manion Firm, San Diego; David A. Meeker, APR, David A. Meeker & Associates, Akron; Howard Myers, Public Issues Counsel, Ltd., Lawrenceburg, Kentucky; Nat Read, APR, Read Communications, Pasadena; Bruce Rubin, APR, Bruce Rubin Associates, Inc., Miami; Karl Skutski, APR, Skutski & Associates, Inc., Pittsburgh; Bernard E. Ury, Bernard E. Ury & Associates, Inc., Chicago; and Jerry Wynn, APR, Jerry Wynn Public Relations, New Orleans. To allow them to speak frankly, I've not attributed their specific comments.

Four of the firms have been in business two to five years; four, eight to 10 years; five from 14 to 18 years; and the remaining two, 25 and 28 years. The number of total employees represented varies from 2.5 to 15; the number of staff professionals from one to 11. Annual fee billings of the 12 firms that agreed to reveal their figures range from $240,000 to $846,000. Six of the 12 report annual fees of between $240,000 and $400,000. Of the 11 firms that reported their average number of clients, two said 4 to 6; three, 10 to 12; four, 18 to 20; and two, 22 to 28.

Turning first to the question of size, not all entrepreneurs necessarily want their firms to ever be anything but small. A few vowed at the outset to stay small forever; they say that their incomes, quality of life and the levels of satisfaction that they and their clients enjoy more than justify the wisdom of their decision. Others grew a great deal in their early years, then were hit by a rash of client and/or staff defections, and opted to remain within controlled parameters thereafter. Still others reported that their size is limited by their geographic location.

Moreover, the 35-year-old owner of a firm founded five years ago might well change his or her mind about the ideal size to shoot for several times over the next 30 years, depending upon such variables as staff demands for growth; opportunities or problems in the local marketplace; partner, merger or joint venture options, or the imminence of retirement, coupled with the requirements of interested potential acquirers. (Some owners might even upon reflection have second thoughts about having gone into public relations: One interviewee said he might have opted to be a lawyer.)

On the other hand, many of the professionals interviewed do indeed want their firms to grow. Some are doing so by diversifying their services; some by fine-tuning their specialized expertise, then marketing it to prospects thousands of miles from their geographic bases of operation; others by setting up or joining networks of smaller or medium-sized firms or becoming affiliates of the giants; and still others by seeking to buy another firm, merge or be acquired. …