The public relations industry has changed dramatically in the past decade. Today, 60 percent of agencies say the term PR needs to be redefined, while 73 percent say that social events have significantly changed their communications agenda.
PR professionals also agree that strategic planning is essential for profit growth: 88 percent of respondents believe that effective strategizing is the most important skill in the PR toolset, leading many to up their organizational skills.
Cost control and well-planned calendars can elevate your firm’s financial stability and alleviate risk, too. This is particularly important today, as inflation and shifting global markets have squeezed profits and destabilized the day-to-day operations of many PR firms.
Laying the groundwork
A well-established PR strategy can streamline your day-to-day operations and empower your peers to do their best work. However, you will need to set some time aside to ensure that everyone is on the same page.
Get the ball rolling with a premortem brainstorm. Premortem brainstorming encourages strategic thinking and minimizes risk before you start working on a new project. Get your team together, and work through common premortem questions like:
- What could cause us to miss our deadlines?
- What will keep our project on track?
- What past lessons can we apply to this project?
- Are we particularly worried/excited about any element of this project?
These questions will get people thinking and help you forecast potential issues. Encourage folks to consider the positives of your next PR strategy, too, as some employees will hyperfocus on challenges rather than opportunities.
Once you’ve gathered your ideas, try to merge your answers together. This will help you combine helpful insights and identify potential threats to your PR agency. You may need to host follow-up discussions at this point, as you need to ensure everyone has contributed equally.
Make sure you track your ROI when you roll out a new project. It’s all too easy to overlook income when you’re excited about a new strategy, but profit growth should be your true north throughout. Make the most of your spending and improve the accuracy of your decision-making by tracking profit-related key performance indicators like:
- Gross profit margin
- Working capital equation
- Debt-to-equity ratio
- Return on assets equation
These KPIs will help you track your income and control your costs. They will help you measure your profit growth, too, meaning you can take better control of your financial strategy.
Sometimes profit growth is about controlling costs, rather than raising revenue. Growing PR firms can quickly become over-leveraged when times are good, and you may find that high costs undermine your ability to run a profitable PR agency.
You can control business costs and maximize your profits by using technology to automate some of your operations. Simple tasks, like invoicing clients and tracking projects, can easily be automated. This will free up time for staff to spend on more creative tasks that authentically boost your bottom line.
Consider auditing your physical space if you’re concerned about lofty overhead costs. PR firms spend an average of $4,000 on office rent and utilities. You don’t have to close your physical location altogether, but you may find that an office share scheme suits your budget better. Encourage your employees to take on more remote/hybrid work and reinvest some of the costs you save on perks like home office equipment.
You can also explore cost-saving solutions like cloud computing when growing. Cloud storage is scalable and relatively cost-effective compared to physical storage for digital files. You will have to pay a subscription fee, but will likely find that the investment results in lower costs and increased flexibility at your firm.
Keeping your costs under control is particularly important during the incubation stage of your PR firm. You need to build your contact list over time to run a successful PR firm and can’t afford to take on burgeoning costs when growing. This will give you time and resources to get the word out while ensuring that your firm stays in the red.
As a PR professional, you can secure long-term profit growth by adopting a strategic approach to upcoming projects. Get your whole team on board with a premortem meeting to reduce risk and increase your ROI. Keep track of your costs throughout, too, as this can free up funds for future investment.