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Why Small Agencies Are Best to Launch Startups

Startup leaders often wonder what kind of agency to partner with to launch. I have the answers.


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russell weigandt

2 years ago | 3 min read

Photo by Ellicia on Unsplash

Want to Be a Big Fish in a Little Pond?

When leaders at startups launch their businesses, they often wonder what kind of agency to choose. It’s extremely important to select the right firm or your startup could be out a sizable project fee with very little to show for it.

With every agency vying for business to recover from the impact of coronavirus, it’s likely you will hear arguments from large, midsize and small agencies about why they’re each right for you. With more than a decade on the agency side, I know what you can expect from public relations firms of all sizes.

Startups can obtain a significant number of benefits as a bigger fish in a smaller pond. Here are five reasons why you should seriously consider a small or boutique firm:

1. Retainer and Project Fee Size

Large agencies often have minimum retainers in the amount of $10–15K per month.

When you consider launch strategy alignment, materials development, pitching and prep, the full launch of a business can easily take four months from start to finish. As a result, if you choose a large agency, you’re likely looking at a minimum of $40–60K for launch but easily much more.

Smaller agencies tend to be more comfortable with smaller retainers, such as $5K per month, and will often provide flexibility around services that are covered by the project fee.

2. Regularity of Top Talent on your Team

Large agencies have the broadest range of top talent with the most diverse range of skills. This is true. But it is also true that large agencies have a greater number of large clients to service, and individuals with specific expertise tend to bill at higher rates.

When you have a small retainer at a large agency, top talent will likely only be on your team sporadically — possibly only for in-person meetings. If you do pick a large agency, ask for a monthly breakdown of hours by team member to get transparency into who is actually doing the work.

When you choose a smaller firm — even with a smaller retainer — your business will typically be of more overall importance to that agency, and the team you get during pitch meetings is more likely to be your actual team. As opposed to senior executives who jump on and off your business, team continuity tends to lead to team efficiency, less communication mishaps and better overall results.

3. More Rigid Financial Controls at Big Firms

Most of the large agencies report into public holding companies, which have been facing significant financial headwinds as big clients tighten their budgets during the economic downturn. In attempt to drive profitability, these companies will likely try to squeeze as much margin out of their public relations businesses as they can.

What does this mean in English? Basically, agencies owned by public companies (which can include some boutique and smaller firms) will employ tighter budget controls and may service your business with more junior staff, who are less expensive based on their hourly rate.

Smaller, privately held agencies are more likely to be flexible on budgeting and less likely to cut off services immediately when the project fee is reached. In addition, smaller agencies will be more inclined to invest staff time to ensure your satisfaction and attempt to convert you into a long-term client.

4. Specialty Boutiques May Have Greater Expertise

You might not realize this, but there are a number of boutique agencies that focus on different sectors, like technology, financial services or healthcare. It’s worth a little research through PR Week or PRovoke (formerly Holmes Report) to identify agencies with the right deep expertise.

As you can imagine, an agency with experience launching a similar business or with deep sector expertise brings some built in advantages and efficiencies. Not only will it take less time to bring them up to speed, they will also likely have deep, long-term relationships with the right reporters to tell the story of your business.

5. Big Fish in a Little Pond (vs. Little Fish in a Big Pond)

In my experience, you always get the best bang for your buck when you’ve built a true partnership. You can’t do that when you have experts ducking in and out of your business. You can’t do that when junior team members are running point on your launch.

Here’s the thing: Every agency will tell you that your business is a priority. Even if the pitch team means it when they say it, the odds are your account team will be primary dedicated toward larger clients at larger agencies.

You can also try to navigate the bait and switch strategy by asking for a staff plan that breaks down the number of hours each team member will put toward your business (and then confirm with bi-weekly time runs).

At the end of the day, you’ll likely be a bigger fish in a little pond at a small agency. It will be easier to build a true partnership with a consistent team that is dedicated to delivering a successful launch. The priority will be making you happy, not pinching every penny.

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russell weigandt

Russell Weigandt is a former senior vice president at top public relations agencies, where he managed corporate reputation for Fortune 500 and startup clients.


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