PR Agency Business: Strategic Planning For a Successful M&A Transaction

Gould+Partners, M&A planning, M&A transaction, Marketing, organization chart, organizational profile, Pr, PR agency business, PR mergers & acquisitions, Public relations, Rick Gould, second tier of management, Strategic planningBy Rick Gould, Managing Partner, Gould+Partners

In M&A, planning is required to ensure the development of the most successful, valuable business possible. Although it is common for small-to medium-sized firms to overlook this function—especially those in PR and other creative services—I encourage you to avoid falling into this trap.

Strategic planning involves conceptual, long-term, broad-based thinking. It is an attempt to define the vision of the business and determine what it should be doing and what steps it should be taking to become a desirable M&A candidate.

A strategic plan usually goes out a minimum of three years and more often to five or ten years. It deals with concepts and ideas expressed in words instead of numbers. It considers industry benchmarks and strives to surpass those benchmarks. Labor percentages, overhead percentages and revenue per professional are good starting points to chart as goals based on size, region and specialty.

Consider moving into new markets. Strive for high productivity/utilization. Continue updating billing rates. Consider moving into value billing for certain clients/projects. Continue making your firm unique.

gould1Get your second tier of management in place. Strengthen your organization chart. Modernize your reporting system so you can accurately determine profitability per client and project. You must be able to measure this.

You must analyze your markets and market share. Why does your competition win pitches against you? Do they have a better firm, more depth, and more experienced staff? Try to get answers to these questions. Doing so could prove invaluable by giving you strategic direction for a most successful transaction.

Your firm’s market position will influence your strategy. Who are the competitive firms controlling the clients that should belong to you? Find out as much as possible about your main competition. What makes those firms different from yours? Is it leadership? The second tier of management? Their niche(s)? Pricing? What gives them a competitive advantage? These are tough questions, but the answers are invaluable. You need to assess your firm’s strengths and weaknesses.

To maximize profitability, you must have a budget and compare, control and analyze it monthly and year-to-date. A working budget is imperative. Your effort needs to go way beyond the bare minimum of budgeting to attain at least 20 percent operating profit. You must have a strategy, a plan—a strategic plan.

Define Your Organizational Profile

  • What are your specialties and services offered?
  • What is your organi­zational culture?
  • Do you have unique/special skills?
  • Are the ages of your key staff members balanced?
  • Is a second tier for succession in place?
  • Is your firm’s infra­structure including systems, facilities, and technology up to date and keeping with the times?

It is impossible to provide an all-encompassing example of how a firm should approach strategic planning. Ultimately, company executives need to reconcile the planning framework and their firm’s individual culture to make an effective plan that fits their situation. This holds true for any business sector or industry, not just PR and public affairs.

Here are the three basic steps to get you started:

  • Step 1. Assess where you are now. What is your identity as expressed through your firm’s mission, vision, and values?
  • Step 2. Assess where you would like to go. What is your direction, taking into consideration your competitive position, your SWOT analysis (strengths, weaknesses, opportunities and threats), your long-term objectives, and your strategies, tactics and action-plans to get there?
  • Step 3. Assess your progress. What is your framework for accountability within your firm to ensure your strategic plan gets tracked, evaluated, and revised based on changing goals and market conditions?

A plan can be effective whether it is three pages or 300 pages, so long as it fits the culture and constraints of your firm. The critical thing is to have something in writing as a basis for reflection and revision in the future.

This is a book excerpt from “Doing It The Right Way: 13 Crucial Steps For A Successful PR Agency Merger or Acquisition,” by Rick Gould, managing partner of Gould+Partners. He can be reached at and/or 212-896-1909.  

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