Do you want to start a public relation firm? If YES, here is a complete guide to starting a PR firm business with NO money and no experience.
Okay, so we have provided you an in-depth sample PR firm business plan template. We also took it further by analyzing and drafting a sample PR firm marketing plan backed up by actionable guerrilla marketing ideas for PR firm. In this article, we will be considering all the requirements for starting a PR firm business. So put on your entrepreneurial hat and let’s proceed.
What is a PR Firm?
A Public Relations (PR) firm works with the media because the media is used to promote whatever new businesses or products their clients have developed. The PR firm industry is very complicated because knowledge of creative writing, journalism, media advertisement and group behavior patterns are required. Even though not having these knowledge does not stop anyone from running a PR firm, it leaves you at a great disadvantage as you might have to engage in a lot of trial and error while running your business.
As a public relations firm, your task is to ensure that the media is interested in your clients and their viewpoint by interviewing them and also putting forth positive stories that will not only boost their brand but also create a corporate identity that is viewed positively by their target audience. Also, the PR firm is expected to act as advisers when it comes to establishing or improving relationships between the clients and their various target audience.
One thing that should not be discounted regardless of whether you possess certain knowledge or not is gaining the required experience. You can achieve this by working for a PR firm so that you will know what is expected of you. Working with an existing PR firm will also give you the opportunity to network with people – reporters, editors, producers, advertising executives, clinical psychologists and lawyers – that will be useful to you when you start your own PR firm. Once you have an extensive network at your disposal, you will be more effective in starting your own PR firm.
It is pertinent that you are adept at communicating verbally and through the media as well and that you are a good writer. Public relations professionals should also possess sales instinct and a thorough understanding of company policies, culture and practices and how this can have an impact on their relationship with clients.
Ensure you find out what your core strengths and weaknesses are and if the latter is likely to have an impact on your business. Aside from the core skills that you must possess in starting your own PR firm, you must also be able to handle day-to-day running of the business by learning at least the basics. You also must understand enough about the industry you are going into as well as the competition that you are likely to face, which is why it is often advised that a thorough research be undertaken before starting any business.
Starting a PR Firm – A Complete Guide
- Industry Overview
According to IBISWorld, the Public Relations firms industry is one that has seen positive growth over the last five years 2012 – 2017. This is due to the fact that there has been much improvement in the economy which led to clients increasing the marketing expenditure of their businesses and in extension causing an improvement to the industry’s revenue.
Operators in this industry have also benefited greatly from the popularity of digital media in recent years. It is being predicted that over the next five years, 2017 – 2022; there will be a continual increase in marketing budgets that will continue to be of immense benefit to the PR firm industry.
The Public Relations Firms industry is valued at $14 billion per year and has been growing at nearly 3 percent from 2012 to 2017. There are more than 44,000 PR firms operating in the United States employing more than 99,300 people.
However, the industry has a low level of market concentration as four of the largest PR firms in the industry in 2017, accounted for more than 17 percent of the revenue generated by the industry. Statistics from the United States Census Bureau has it that there are a large number of small PR firms, and more than 83 percent of them employ less than 10 people.
Globally, according to Holmes Report, the PR firm industry is valued at $14.2 billion and is expected to reach $20 billion by the year 2020. The overall growth of the industry was stunted due to the volatility of the currency, which caused PR firms industry in the United Kingdom and the rest of Europe to fall by nearly 4 percent, even as PR firms in the United States were likely unaffected.
In 2015, the United States, according to Technavio, accounted for more than 75 percent of the total revenue generated in North America due to the fact that a huge number of global vendors are based in the United States. It is expected that the market will continue to grow especially as there are more digital mediums such as the social media which is expected to contribute immensely to the growth of the industry.
The recovery and growth experienced in the industry after the recession saw an increase of new operators into the market, which has led to the intense competition experienced in the industry as operators strive to build credibility with their customers by ensuring that they put forth quality campaigns.
The industry is segmented into private PR firms and public PR firms, with the former controlling about 59 percent of the market share in 2015. The reason for the increased growth of this segment is due to the increased freedom as well as versatility in taking advantage of innovations and also making decisions as against the public PR firms who had to follow a traditional approach when making decisions.
The largest medium used by the PR firm industry has been print as this accounted for more than 50 percent of the overall market share in 2015 ahead of social media, company websites, television, events and influencer marketing.
Starting a PR Firm – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of a PR firm ranges from small businesses, celebrities and wealthy personalities, corporate organizations as well as government agencies. More and more people as well as businesses are making use of PR firms to handle and create positivity for their images and so if you are looking to start your PR firm, you should be prepared to focus on these target markets.
List of Niche ideas Within the PR Firm That You Can Specialize in
Public relation firms help corporate organizations, small businesses, government agencies and other such entities to manage communications between them and the general public, employees, customers and stakeholders. Even though a PR firm is expected to handle general PR services, there are several that have gone into niches where they feel is going to allow them stand out from the rest.
Depending on the size of your PR firm, you might decide to handle all the niches or settle for a select few. However, before choosing any niche, ensure that you conduct a thorough research so that you will not end up with niches that will not generate any revenue for you.
Below are some of the niche ideas within this particular business that you can specialize in;
- General PR Services
- Corporate and lobbying services
- Media relations
- Event management
- Crisis communication
The Level of Competition in the PR Firm Industry
The PR firm industry has experienced substantial growth in recent times due to the economic growth that is being experienced in the country which has enabled businesses to increase their marketing expenditure, thereby leading to stiff competition for clients amongst the existing PR firms.
When clients look for PR firms that will represent their interests, they prefer one that has a compelling profile and will not only deliver what they want but exceed their expectations as well. Therefore, in order for you to be able to compete with other existing PR firms offering the same services as your firm, you need to have built a profile that is compelling enough to attract the attention of big clients.
There are a lot of PR agencies in the United States of America and so if you are looking to start your PR firm, you should know that you will be competing with a lot of other PR firms both within and outside the country and therefore you should be prepared.
List of Well – Known Brands in the Industry
In every industry, there are brands that stand out either due to how long they have remained in the industry, their marketing and promotional campaigns or the relationship they have with their customers. The public relations firm industry is no different and there are PR firms that stand out.
Below is a list of some of the well-known PR firms in the United States of America and even on a global level;
- Omnicom Group Inc.
- The Interpublic Group of Companies Inc.
- APCO Worldwide
- Coyne PR
- G&S Business Communications
- Zimmerman Agency
- Bliss Integrated Communication
The PR firm industry has benefited from the expansion and continued growth in mobile media and social networking services. Even though the public relations firms industry has allowed itself to fall back to the advertising industry in terms of prestige and revenue, its importance has however started growing as there are more media outlets and there has also been an increase in complexity of the marketing landscape.
The internet has had a lot of impact on the public relations firms industry as it has offered operators more opportunities in communicating on behalf of their clients and in being able to reach specific audiences like never before. While this might seem like good news, the inability to manage what comes out due to the increasing number of blogs and high traffic message boards has made the job tougher for public relations professionals.
Even though many PR firms are beginning to recognize the benefit of formally training their employees, especially the new ones, most of the public relation firms in the industry do not provide sufficient training for entry professionals as new employees are expected to learn on the job in their early careers.
Starting Your PR Firm from Scratch vs Buying a Franchise
One serious decision that you will need to make in the course of starting your business is whether you should start the business from scratch or to buy a franchise. Keep it in mind that each option has its pros and cons and that choosing one over the other should depend on the objectives of your company and not which is the more popular option to go for.
Buying a franchise allows you to start your business using the well proven model of your franchisor which also gives you leverage over your competitors. However, franchises do not allow much of a leeway especially when it comes to making certain important decisions regarding the business.
Most entrepreneurs dream of starting their businesses directly from the scratch because they want to be able to control all aspects of the business without having to rely on the decisions of another. Starting from scratch might be overwhelming especially in a competitive industry, which is why it is often advised that an entrepreneur has a well written business plan that will enable them to focus on achieving their goals and objectives. Also, starting on a small scale will help the entrepreneur achieve a learning curve regarding the business especially when it is time for the business to expand.
Possible Threats and Challenges You Will Face When Starting a PR Firm
In every business venture, threats and challenges that are likely to crop up and as an entrepreneur, it is expected that you are prepared for these threats and challenges when they occur. It should however be noted that not all threats and challenges can be handled and when these occur, the best that can be done is to remain optimistic till the challenges have passed.
Some of the threats and challenges that you are therefore likely to face when starting your PR firm are; having to distinguish your PR firm from your competitors in order to attract clients, global economic downturn which will affect the marketing budgets for the clients and changing industry trends.
Starting a PR Firm – Legal Matters
- Best legal entity to use for this type of business
When looking to start any business in the United States, one important decision that will have a huge impact on your business is the legal entity that will be used. Once you have registered your business name, it is imperative that you choose what legal entity your business will operate under.
Even though there are several legal entities available for entrepreneurs looking to run their businesses in the United States – sole proprietorship, partnership, S corporation, C corporation and limited liability company (LLC) – not all will be suitable for all kinds of businesses and so conducting your research is very necessary as it will enable you know the right legal entity for your business.
One of the easiest ways to know which legal entities you should consider is by using major attributes to know how favorable they will be for your business. Some of the defining attributes that are used to determine which legal entity is best are; ownership and management, personal asset protection, simplicity and flexibility, taxation structure and the extent of liability involved.
While a sole proprietor and partnership kind of legal entities are easy to start up by the entrepreneur, S corporation, C corporation and LLC are not so easy to start up but they offer more protection for the entrepreneur in terms of extent of personal liability and makes it easier for the entrepreneur to source funds from private investors without having to surmount too many hurdles. Also, these other kinds of legal entities give the clients confidence in the business and allows them become more willing to transact business depending on the industry the business is in.
Regardless of what scale you are starting your business, it is best to register it as either an S corporation or an LLC because the PR firm industry is rife with competition and so not starting on the right footing is going to leave you at a disadvantage when getting clients.
Ensure you engage the services of an attorney who understands the industry thoroughly to help you with choosing the right entity for your business in accordance with the laws of the state you intend to operate from.
Catchy Business Name Ideas Suitable for a PR Firm
When looking to start any business, choosing your business name is very important as a unique name can enable your business achieve its goals and objectives quickly especially as clients are likely to easily remember a unique name especially if you offer qualitative products or services.
Below are some of the catchy business name ideas that are suitable for a PR firm;
- Robik Agency
- Unik PR Firm
- Enigma Communications, Inc
- Silhouette Media Agency
- Shadow Communications
There are a number of calamities that can affect a business to the extent that it gets closed forever. Some of these disasters that happen can either be natural or man-made and it is important that you are prepared for whenever the disasters will occur.
According a research report by Insurance Information Institute, a quarter of businesses that encounter disasters never open again for business and so it is imperative that before you start any business, you have gotten your coverage especially as every business endeavor is known to contain a degree of risk.
While it is imperative that you get the coverage, knowing the best coverage to go for will mean you contracting the services of an insurance agent for help. Below are some of the insurance policies that you should think of purchasing when looking to start your PR firm in the United States;
- Business Interruption Insurance
- General Liability Insurance
- Workers’ Compensation Insurance
- Commercial Property Insurance
- Errors and Omissions Insurance
- Umbrella Policies
Intellectual Property Protection/Trademark
The fact that most ideas by PR firms are usually concepts that are not tangible like physical products mean that the industry is dealing a lot with intellectual property protection as clients often take ideas that have been pitched to them by a PR firm, and ignoring the firm that brought the idea.
Therefore in looking to protect your intellectual property rights, which can either be a written or visual expression of an idea, the PR firm must ensure that any whitepaper presented to a client has a copyright notice or the PR firm can ensure that they protect their intellectual property right by having in place a formal pitch agreement.
Is Professional Certification Needed to Run a PR Firm?
There is no professional certification required before you can start your own PR firm in the United States, even though most entrepreneurs starting a PR firm usually hold a bachelor or master’s degree in either public relations or journalism.
However, in order to be able to have some sort of leverage; PR firms join the Public Relations Society of America where continuing education programs via seminars, webinars and conferences are offered. Even though this might be used as leverage, clients are usually not bothered with professional certifications but with the quality of work that has been achieved.
List of Legal Documents You Need to Run a PR Firm
When looking to start a business in the United States, you will need legal documents if you do not want to run into any trouble with the authorities. If you do not know what sort of documents will be required of you, then it is best to get the services of an attorney who has the experience to help out. The attorney will also be responsible for crafting out all the contract and agreement documents on your behalf, so that you are protected from any unethical client.
Below are some of the legal documents that you will need to run your PR firm;
- General Services Contract
- Web Site Development Agreement
- Content Agreement
- Linking Agreement
- Certificate of Incorporation
- Operating Agreement for LLCs
- Business Plan
- Business License
- Insurance Policy
- Employer Identification Number (EIN)
- Federal tax Identification Number (TIN)
Financing Your PR Firm
Even though you will not require a huge capital to start this business, you will require funds in order to run the business till it achieves profitability and so it is important that you make thorough plans regarding your funding. If you intend to borrow from external investors, then it would be best to have a business plan in place as this will convince them of your passion and commitment to the business.
Below are some of the financing options available to you when looking to start your PR firm;
- Generating your startup capital from personal savings and sale of stock
- Getting a business partner and splitting startup capital according to a determined ratio
- Sourcing for soft loan from friends and family members
Choosing a Suitable Location for your PR Firm
Deciding the appropriate location for your business is very important because the location you choose can have a lot of impact – positive or negative – on your business. A PR firm for instance that isn’t located within the hub of its target market will have a hard time compared to the one that is close to or within the hub of its target market.
Depending on the niche you intend to focus on, if you are starting off on a small scale, then it is entirely possible for you to start this business from your home. All you need to do is clear a space in your den or some other area in the house in order for you to be able to work without distractions.
However, because of how rife the industry is with competition, it will do you a lot of good if you rent an office space that is close to your target market so that they do not only see you but can gain access to you at any time. You should be prepared to run the office for a while without clients and if you plan your marketing strategies right with good visibility, then recouping your investment in a short period of time will be possible.
If you are going to be operating your business in a city, try and look for a shared workspace where you can pay a little in order to have a space that looks official instead of having to rent a huge space for your business. Engage the services of a real estate agent to help you out in securing a nice location.
Ensure that you set a budget for rent and do not exceed this budget so as not to cause a strain on your overall budget.
Starting a PR Firm – Technical and Manpower Details
One of the most important documents that will be needed when starting your PR firm is the services contract which clients have to sign before any project is embarked on. This document protects your ideas or concepts from being stolen by your client. With the agreement, you get to clarify the expectations of your clients, while also minimizing any legal disputes that may arise in future.
Even though this is a business that you can start from your home in order to minimize expenses and make use of equipment such as computer, phone and internet services that are necessary for your business, you should still be aware that there are certain expenses that you will face that cannot be done away with whether you are operating from home or from a leased facility.
Some of the critical expenses include development of website, printing of business cards, letterheads and marketing materials, copywriting of sales and marketing materials, graphic design services for logo and corporate identity, and payment of membership fees in order to join relevant trade associations as well as networking organizations.
If you are starting off your PR firm with a significant client, there might be a need to build a team by hiring proficient people, but if otherwise, it is best to run the business by yourself in order to reduce operating expenses. As the business expands, you might need to hire an account officer, an office manager, clients’ relationship manager, graphic designer, website developer and designer, and a public relations specialist.
Therefore from the above analysis, you will need to hire at least 6 key people in order to be able to achieve your goals and objectives.
The Service Delivery Process of a PR Firm
A public relations firm is one that deals in communications through various media on behalf of clients. In order to be able to generate clients, PR firms have to use a combination of phone calls, attending of events and written communication, and once they have gotten the clients, advise them on how they can interact with their audience.
PR firms also have to stay abreast of industry trends by networking with their peers in the industry in order to also explore various partnership opportunities that may arise. Also, PR firms have to ensure that they create a working relationship with members of the media as a way to look out for their clients.
Starting a PR Firm – The Marketing Plan
- Marketing ideas and strategies for this particular business
As a new PR firm, you are at a disadvantage because you will need to continually prove to your target market that you are better than PR firms that are already in existence, which is why you will need to have marketing ideas and strategies in place in order to be able to achieve this.
However, regardless of any marketing strategies that you might have, it is important to note that clients will love to see what you can achieve and so in building your portfolio, you might need to start with small businesses and use this in building the portfolio that will enable you attract the bigger clients.
Therefore, before coming up with marketing strategies and ideas for your PR firm, it is important that you first build a company profile that is very compelling by stating the services that you can do and what you have already achieved. No corporate client will leave the PR firm that they are with for an unknown firm that hasn’t yet proven itself in the industry, so while you might have marketing ideas to attract the big clients, do not neglect the small clients too.
No one will patronize a company that they aren’t aware of, which is why marketing is very vital for a business in helping to ensure that certain goals and objectives are attained. With marketing, you not only get to attract the awareness of clients to your business; you also get to convert a certain percentage of this awareness to revenue for your business, thereby ensuring the sustainability of your business.
While developing marketing strategies for your business is quite important, you should note that not all strategies will be effective enough for your business, which is why it is important that you conduct a thorough research on the market you are looking to offer your services to so as to know their demographics and psychographics and then model your marketing strategies to suit them.
Below are some of the marketing ideas and strategies that will be effective for your PR firm;
- Ensure that you formally introduce your company to corporate organizations, government agencies and small businesses by sending an introductory letter and a brochure that contains all the information about your PR firm
- Engage the services of marketing executives to carry out direct marketing for your PR firm
- Use social media platforms by opening a Facebook page, Linkedin and Twitter account in order to promote your PR firm
- Advertising your PR firm in newspapers and related magazines as well as on radio and television stations
- Ensuring that your PR firm is listed in yellow pages as well as online directories
- Attend seminars and conferences and also join PR associations in order to network and increase awareness for your PR firm
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
Even though PR firms help to positively build the image of their clients, there is also a need to also boost their own brand as well, as this is the only way they can attract the clients that will help them achieve their goals and objectives.
There are several PR firms in existence in the United States and in order to get noticed, it is important to engage in activities that will not only help boost the brand awareness of the PR firm but also help to create a corporate identity as well.
One good thing with publicity campaign for one’s business is that not only do you get awareness from your target market; it also enables you to easily penetrate the market and get the leverage you need against your competitors. However, the fact that publicity generates revenue for a business does not mean that just any strategy will be effective.
It is therefore imperative that a thorough research be conducted before you make use of any strategy so that you do not end up wasting time and resources using strategies that won’t work.
The good thing about boosting awareness for one’s brand is that you can use a combination of offline and online methods to get the attention of your target market. All you need to know is where most of your target market is likely to visit so that you put more resources into campaigning on those platforms without sacrificing other platforms.
Ensure that you have a set budget and stick to it so that you do not end up throwing your whole budget out of balance and causing a strain on other parts of the business. Below are some of the strategies you would need in boosting awareness for your brand as well as creating a corporate identity;
- Advertising your PR firm on the pages of local newspapers, industry publications and magazines as well as on radio and television stations
- Attending corporate seminars and conferences in order to network and increase awareness for your PR firm
- Building a professional website and deploying SEO strategies to ensure that your website ranks tops in search engines
- Asking your loyal customers to help refer your business to others
- Strategically positioning your billboards and banners in strategic locations all around the area where your PR firm is located so as to increase awareness
- Leveraging on the internet especially social media platforms such as Facebook, Linkedin, Google Plus and Twitter in order to generate awareness for your PR firm.