By Rick Gould, CPA, JD
As we see the economic uncertainty of 2009 subside, we slowly exit the recession that has hammered the PR industry for the past 18 months. Now is the time to plan for a period of growth. Many firms saw their revenues cut in half over the last year, a painful and humbling experience.
Set targets, and set goals for growth in revenues today. Growth in revenues, if managed carefully, will beget growth to the bottom line. Looking at historical organic growth rates and projecting them out to the future should be a high priority.
Growth Momentum best describes this kind of economic recovery activity. This kind of thinking will positively drive your strategy. Is there a niche you would like to try (i.e. Healthcare, Crisis, Public Affairs etc)? The growth that most matters is the growth in the value of your firm. Just growing the top line will generally not increase value. Growing the bottom-line is the key to growing value.
Growth Momentum also has risk: the risk of growing in revenue size and staff with a negative effect on the bottom line. Economies of scale do not automatically occur unless this momentum is managed judiciously and effectively.
My blogs and messages keep coming back to our Annual Benchmarking Study. Industry benchmarks closely managed in relation to your actual stats provide the utmost critical tool to monitor and manage your Growth Momentum.
Most firms want to grow, but are unsure about how to best approach and manage the process. New challenges, new opportunities, and increased depth of services and staff are all contributing variables to growth. Growth can be a careful, measured approach or it can be a careless, emotionally driven one. Which approach do you think maximizes a firms’ value and price tag when the agency principal wants to monetize this valuable asset?
Larger firms that consistently surpass industry benchmarks possess the value and price-increasing intangibles in the valuation of their firm when they are in play to be sold. This will further drive growth momentum.
By adopting a culture of Growth Momentum and managing via benchmarking, firms will inherently evolve to keep staff motivated and attract new clients. Growing, successful firms that also exhibit top quality service and value are the ones that will survive the economic uncertainty.
Your starting point to launch this concept and to adopt a culture of Growth Momentum is to participate in our Best Practices Benchmarking Survey, being distributed on Monday, March 1. By doing so, you will be one of the first to receive the full survey report and findings once it is released. This report will outline the critical industry benchmarks you need to be following to maximize your economic recovery activities.
StevensGouldPincus 2010 Benchmarking Survey