By R ick Gould, CPA, J.D.
Recession contrary “Model Firm”? What is a recession contrary Model Firm?
A recession contrary PR firm dispels the notion that a firm can justify poor performance if we are in an economic slowdown. Uncertain times, financially challenged periods or whatever the label assigned, the fact remains that recession contrary PR firms use benchmarking (not rationalizing) to weather the storm.
I have closely tracked a select group of firms since the years following September 11, 2001 and the unpredictable Tech explosion/implosion. These firms, while evolving through the same conditions and changing business world as their competitors, developed the ability to maintain 25-30% profitability. They continuously pour investment dollars back into their firm by hiring quality staff, expanding space in desirable working conditions, giving generous staff benefits and bringing in the best technology and outside consultants.
The one common thread among these recessions contrary Model Firms is that they consistently manage by the numbers. They manage by benchmarking.
Recession contrary Model Firms keep their labor cost under 50% of Net Revenues. They keep their Operating Expenses at around 25% with their major item, rent, between 6 – 8%. Managing using key benchmarks assures them the requisite profitability needed to grow and increase the value of their PR firm.
For additional insights from the 2009 Best Practices Benchmarking Report please see the StevensGouldPincus Blog at: http://stevensgouldpincusblog.blogspot.com/