With an ever-changing marketplace, well-planned, effective communication is critical to the success of today’s businesses. Those interested in getting the word out–about a new product, organization, special event, etc.–are cashing in on the power behind good press by entering the public relations field. According to the Public Relations Society of America (PRSA), there are roughly 8,000-12,000 PR firms operating in the areas of entertainment, government, community relations, fundraising, multicultural affairs and special events.
And the numbers are increasing, says Pat Tobin, president of the National Black Public Relations Society and owner of Tobin & Associates in Hollywood, California. “When I moved to California 20 years ago, I knew only one or two PR firms [in my area]. Now I can think of six or seven just off the top of my head.”
Low start-up costs and fast returns seem to make public relations an attractive industry to enter. Typical initial investments range from $5,000 for a home-based business–which includes the cost of a computer, fax machine, phone and basic office supplies–to $ 10,000-$ 15,000 for a small office in a major city, says Tobin. Annual revenues for PR firms range from $50,000 for a one-person firm to $5 million for a company with 50-100 employees. Chris Reade of CRC, a public relations/multimedia company in Los Angeles, started her company out of her home with $5,600. Within 14 months, she turned a profit, earning $250,000 in revenue.
To get started in the business, you’ll need a phone, computer, modem, online service, fax machine and, of course, clients. Most PR firms implement three-to-12 month contracts for each account, with publicity fees ranging from $1,500 to over $5,000 per month. Clients are typically obtained through word-of-mouth. However, networking is still important, so attend functions and conventions and join organizations. As with any business, when launching a PR firm, set goals, organize a budget, do research and hire a good accountant. And remember to maintain client contracts. Depending upon the size of an account, you may want to get an expense retainer up-front and budget for such incidentals as entertainment, travel and promotional items.
While PR firms can be lucrative businesses, a drawback for the smaller outfit is attracting larger clients. “It’s sometimes hard to make potential clients understand I can handle big accounts,” says Michael Robinson of Robinson & Co. in Queens, New York. “But when a company hires Robinson & Co., they get Michael Robinson, not some junior executive.”
To prevent skepticism, Karen Taylor, who launched Taylor-Made in Jersey City, New Jersey, in 1996, balances her workload. “I don’t want to have over four accounts. I want to maintain a hands-on approach,” says Taylor, who has done PR work for Red Hot & R & B, an AIDS benefit album coming out on the Arista label.
Collecting on past due accounts can also be a problem, so to stay on top of expenses, Robinson suggests estimating your basic operating costs (phone calls, mailings, office supplies), then getting an advance from clients to cover these expenses. “I log phone