In the debut episode of the Agency Leadership Podcast, co-hosts Chip Griffin and Gini Dietrich discuss some of the things that new and prospective agency owners should be thinking about. From naming to legal and accounting issues, there are important decisions that need to be made in the early days.
If you have a question or topic you’d like to see Chip and Gini discuss in a future episode, please email [email protected].
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CHIP: Hello and welcome to the agency leadership podcast. I’m Chip Griffin
GINI: and I am Gini Dietrich.
CHIP: So since this is our first episode, I thought before we actually jump into the topic at hand, it would probably be good to tell our listeners what the heck it is that we’re going to talk about. Right.
GINI: That’s probably a good idea. We might actually want to know that ourselves.
CHIP: That’s, you know, that would be a good idea to have it. In fairness, this is an idea that, that originally came to me years ago when you and I recorded a podcast and we were talking about the business of pr and how so many of our friends in pr just don’t understand the business side of the equation. They’re great at client service. They’re fantastic at being creative, but they don’t know what a p and L is. They don’t understand, you know, how do you grow a business, you know, how do you do hiring, you know, all of these different things that come into play and are really important if you’re going to have an agency.
GINI: Uh, yeah, very important because it’s the business side of things which creates the opportunity for growth and scalability and hiring and all those kinds of things,
CHIP: right? Because if you, if you don’t have revenue then it’s hard to be creative and if you don’t have clients you can’t deliver client service. So hopefully this podcast will, will help fill in those gaps for a, for a lot of our colleagues. Uh, it’ll hopefully provide some food for thought. Maybe make them reconsider. I know that in the conversations you and I have had over the years, I often reconsider some of the things I’m doing. So hopefully that’s something that our listeners will find as well.
GINI: So as well, you know, I think this is a great quotes. I had a business coach very early in, in, in my business, in my pr firm who said to me, you can either be a kick ass pr professional or you can be a kickass company grower, but you have to decide which it is that you’re going to be. And if you decide that you want to be a pr Pr, a really good pr professional, that’s great. But know that you have a lifestyle business and if you decide that you want to be a company, grow your, your, your role has to change. You can’t do client service and create and creative and accounting and hr and the janitorial you have like it has to, you have to evolve.
CHIP: Right? And, and even if you are going to have a lifestyle business, and I’m sure on one of our episodes we’ll get into a conversation, maybe even this one about what lifestyle businesses are because I think a lot of listeners probably don’t know, but even if you are going to have a lifestyle business, you still need to understand at least the basics of business in order to make sure that you have something that’s sustainable to allow you to live that lifestyle.
GINI: And not only that, but you know, simple things like putting enough money away for taxes so that the end of the year doesn’t come and you don’t have anything saved that’s bad. You have to pay taxes. Oh, you have to pay taxes unfortunately. But yes,
CHIP: podcasts, I should go figure that one out because I’m, I’m in trouble. Just getting irs guy, you know, if you’re listening, fully paid up, guaranteed.
CHIP: In any case, uh, so, you know, I think for this first episode we were talking, I think the, you know, one of the best places to start is well starting your agency, right? Because it’s the first thing that we’ve all done when we’ve had our own agency as well. You’ve got to start. And so I thought it would be helpful if we talk about, you know, perhaps some of our own experiences as well as um, you know, some of the things that our listeners who are either just getting started or perhaps thinking about taking the plunge into agency life should be thinking about.
GINI: So I think there are a few things. The one, the one big thing for me has always been, do you have the expertise that you need to start your own agency? Because I think so many of us, myself included, sort of just get fed up with the way things are done and think I have a better way of doing things, but I can’t get anybody to listen to me or to do anything differently. And so I’m going to do this on my own, but we may not have gotten the business experience that we need or we may not have gotten the business development experience that we need or you know, when you go out on your own, you’re, for all intents and purposes, starting an agency, do you have agency experience? So I think there’s a lot to be said in getting that kind of experience when you’re working on someone else’s dime because if you do it on your own, and trust me, I speak from experience. When you do it on your own, it’s extraordinarily expensive to do that. And you know, you could pay for three degrees probably in the 10 in the amount of money you spend trying to learn it on your own. So I think there’s a lot to be said for getting the experience that you are weak on in a corporation or in an agency so that you can do, have the business side of running an agency.
CHIP: That’s a great point. And I think you’ve touched on something else important, which is that, you know, just because you’re frustrated with the way things are, perhaps in your own agency or the way you see other agencies do it, that in and of itself is not enough of a, either a reason or a driving force in creating your agency. I mean, I remember when I was a, I’m an arrogant little sob at the age of 19 and an intern on Capitol Hill. Uh, and I actually just found this memo, uh, not too long ago. I wrote a memo to the congressman explaining how campaigns should be run at age 19 in age 19. I mean, I’m telling you after 90 days of working on capital hill high knew absolutely everything. Everything. I mean, there wasn’t a
GINI: be seeing as you were the student liaison to the school.
CHIP: Well, yes we can, we can go there some other day, but yes, I was, I, I had some issues when I was younger. I tried to grow up too fast. Uh, and, and, and now I’m trying to relive my youth of all. I’m in middle age, so I don’t know how I’ve got my timing is all wrong. What can I say? I love it. So, so, so I, I agree with you. I think, you know, making sure that you are learning the ropes a, uh, in an agency or, or in some similar environment so that you know, what to expect is incredibly valuable. And um, you know, when I started my own agency I didn’t have a ton of that, but I had a little bit of it because I had been running a small business. I’m not in the agency world but in the technology world. So I had some grasp around the basics in business
GINI: and unfortunately I did not. And I think the, I think the two areas where I was lacking was the business side of things because I knew the letters p and l, but I didn’t know what they stood for. And the business development side. I mean we, I worked for freshmen and we had, you know, they put us through training on business development and all those kinds of things and networking and stuff. But you know, when you’re billing 80 hours a week you don’t, and that’s your goal. You don’t have time to do any business development. So I kind of knew the structure of business development and, and what was expected, but I had no idea how to go after new business on my own. No, no clue.
CHIP: And, and that’s not something that’s easy to do. I mean new businesses, some, some real expertise in order to excel at a and it’s, it’s not something that everybody’s comfortable with frankly.
GINI: No. And I think so many of us start our businesses and get, you know, grow from referral and word of mouth, which is great when things are kicking and you know, there’s enough work to be handed around like that, but then when the economy crashes or things are kind of sluggish, other people tend to, to hold onto that, even if it’s something, you know, a year ago they wouldn’t have worked on because they also have to make payroll or whatever it happens to be. And so relying on referrals and word of mouth is a really, really bad way of building your business.
CHIP: Yeah, absolutely. And I think this is, this is actually probably a, a good spot to talk about why it is that people create it, create agencies, you know, you mentioned that sort of frustration with the way things are. And so that’s, that’s a common one that I’ve seen in my own case and I think this is incredibly common. Uh, it was because it was easier and better than saying I was unemployed because because I had been in the world of politics in DC and got married and decided to move back to New England. And uh, while I was looking for a job, I decided that I would call myself an agency, created Griffin Strategy Group and a accidentally turned it into a real business. But I think that’s, I think that’s a common story. I think there are far more accidental PR agency owners out there than anything else
GINI: for sure. So when you think about it, and you know, even I didn’t know this either, apparently you have to like incorporate and do all those things. And I remember talking to an attorney at a networking event and he said, what kind of corporation are you? And I just looked at him and he was like, the corporation done right, have you done any paperwork? And I was like, have you done anything that, you know, pays at corporation instead of view personally? And I’m sure I just looked at him blankly and so he very kindly took me under his wing and showed me that you actually have to start some sort of businesses, was an llc or s Corp or a c Corp or whatever it happens to be. There has to be some incorporation and you can’t pay yourself personally because of the tax implications on that as far far higher than through a company. So I think there’s all of that 10 pay yourself, but it’s just really. You can yet. Right?
CHIP: Yeah. But I think that’s it. And that’s a great point. I think anyone who’s thinking about starting their agency or frankly any other business, you don’t need you, you need to take time to talk to a proper lawyer and accountant. And you know, over the course of listening to this show and other resources out there, you’ll get lots of ideas and we’ll, you know, we’ll certainly point out some of the basics as we know them, but your own circumstances may be slightly different. There may be considerations in your particular state or financial considerations for you that, that may dictate how it is that you want to address these things. But a lot of them, if you get them wrong upfront, it’s really difficult to change down the road. Not Impossible, but, but you know, when it comes to setting the business up, you want to make sure that you’re crossing your t’s and dotting your I’s.
GINI: Yeah. And it’s not expensive. You know, I’ve, I think people tend to go, well I just am starting and I don’t have any, any money. Trust me the 200, two or $300 it will cost you is far, far worth it in the long run because it will cost you 10, 20, 30 times that if you don’t set it up correctly.
CHIP: Absolutely. And I would argue probably it’s on the actually the accounting side where you need to think the most because it’s you, you know, you and I were having a conversation offline and not too long ago where we’re talking about the difference between cash and accrual accounting and we don’t want to get too deep into that, but, but that’s a big consideration and something that is difficult to undo. So you know what I always encourage people to think about when they’re starting a, any kind of businesses to think about the, the early decisions and spend the most time on the ones that are difficult to undo and don’t worry so much about the ones where you can pivot easily later on because you will pivot.
GINI: Yeah, absolutely. We’ll pivot more than once.
CHIP: And, and you may pivot so much. You look like a ballerina depending on how things go. All you have to be careful about that too, right? If you, uh, if you, if you are not giving anything a real chance to succeed, then you know, you’re probably just going to go careening from one accident to another.
GINI: Yeah. And, you know, this is actually, um, a recommendation I make for our clients who tend to be agency leaders, which is stop making decisions based on emotion. Let’s look at the data, give it enough time that we can collect data. In fact, I had this conversation just this morning, somebody sent me their data and who did only been like 10 days and I’m like 10 days is not enough. Not trying to make a decision based on how you feel. It’s not enough time. We got to give it time and collect the numbers and let the data tell the story so that you’re not careening off or pivoting when you probably don’t even need to.
CHIP: Right, exactly. And, and it may be that you don’t even need to fully pivot. You may just need to tweak, you know, so, you know, so, so not overreacting either for, for good or for bad I think is generally good advice. You know, I, I think one of the things people like to focus on most when they’re creating a business, at least in my experience, is the name of that. And I’ve seen a lot of time wasted thinking about names, frankly. I’ve also seen some cases where, you know, maybe 30 seconds of thought on the name, it could have gone a long way to. So I, I’m curious, what’s your take on the naming process when it comes to an agency? You know, there’s different schools of thought, right? You know, do you, do you use your own name, do you do it law firms style if you’ve got multiple partners and throw them all together or do you come up with something totally unique? And I’m curious, what’s your take on, on names are.
GINI: Well, I mean I started, my pr firm is Arment Dietrich and you started your first agency is with your name in it. So there’s certainly that school of thought. What I’ve learned and what I would not do again is the fact that my name is on the dorm sets the expectation that clients are going to work directly with me. And as we grew, that became impossible and it became a really big source of contention for us because clients would say, well, I want to work with the owner and you know, at, at this point I have 40 employees like, you know, you can’t, I can’t run an agency and work one on one with all of our clients day to day. Um, so I think that was a big mistake on the spin sucks side when we started out as the fight against destructive spin or fads and the url was spin sucks, but we didn’t use spin sucks as the name.
GINI: And we eventually evolved it because it was easier and it made sense from a branding perspective to have the name is the same as the url and all those kinds of things. So I think there’s an opportunity for you to change too. It doesn’t necessarily have to be. I mean, I went into it because I worked at Fleishman Hillard and I had my maiden name and my married name Armenta Diedrich. Um, and Armand started with an a. So it put us at the first of most lists. So I, from that perspective, I was like, well, all the global agencies have two names with the exception of maybe one or two. So I looked at it from, from that point of view, but I can tell you it was, it became extraordinarily difficult as we grew because like I said, you can’t, you can’t be all things to all people as your girl.
CHIP: Right? I mean, you know, the advice that I got, um, I was talking with, uh, a very smart guy I knew before I went out on my own and I said to him, I said, look, I said, you know, should I be coming up with some sort of creative name or should I use my own name? And he said in the early days, people are buying you, so you might, you might as well use your name so that it makes that linkage at, at the same time, you know, it’s, it’s great nearly days, but, but then you’ve got that sort of middle period where it’s a problem, you know, then you become as big as edelman and it doesn’t matter that you’re, you know, arment dietrich because you’ve got, you know, 5,000 employees and nobody actually expects to work with Edelman. But, uh, I think you need to sort of to think about the trajectory.
CHIP: The other thing is, if you’re not going to use your name, so if you use your name, you get, you get a fair amount of flexibility for your pivots. If you’re, if you’re not gonna, use your name though. You need to think about, okay, have I boxed myself in because I, you know, I’ve seen cases where someone’s creating a very specialized agency and they put that specialization in the name itself. And so if I call myself awesome facebook marker ink, um, you know, that’s fantastic. Up until the point that facebook shuts down, pivots goes the way of friendster blocks, access to agencies, whatever. Uh, and then all of a sudden I’ve got a name that I’m going to have to change. Uh, and so, you know, you want to try to think about, okay, is this, this name does a great job perhaps of describing what you do today, but does it allow you the flexibility to pivot in three, five, seven years down the road?
CHIP: Because trying to rebuild a new brand name is a very difficult thing to do. Um, inexpensive. I guess what I’m saying, difficult. That’s what I met. Yeah, it takes quite a bit of a, a particular. If you built a decent brand, right? I mean if you, if you know brand that it’s easy, you just printed business cards and you’re done with it. Um, the other advice I’d give on naming though, and I just ran into this with someone not in the agency world but adjacent to it recently, uh, they came up with a name for their business but it didn’t bother to google it first. Uh, and so while the domain that they wanted was available, there were a lot of businesses already with the same name in similar spaces. So, you know, I think it’s very important that you take the time to, you know, check for availability of domain names, google the name, google variations on the name, just make sure that, that, you know, what you’re getting is a, is indeed something that you know, will be sustainable.
CHIP: Um, and then of course, you know, getting back to the legal side of things, you also need to check it against various registration databases, trademarks, business registrations in whatever state that you’re going to register and things like that. Those are important things that you need to your point of your name because that’s typically not taken so. Right. Although I will say, I mean I, my, my first, uh, agency was called Griffin Strategy Group. I originally tried to call it griffin consulting group and the state of New Hampshire rejected. They said they said that, that, that, that was not unique enough. It was crossed out the word consulting and strategy and they accepted it. So now mind you, I had a friend at the same time who used his last name and then called it consulting group and they accepted that one. So at least in the state of New Hampshire, a good chunk of it depends just on which examiner you get when they’re, when they’re applying to stanford saying Nad I like that one today.
CHIP: Um, but, but these are important things, right? I mean, because if you know, you can get all excited about it. And I frankly also seen people go buy business cards before they did all the paperwork to make sure that, you know, they, they locked in the name only to find out, Geez, now I got to go reprint all those because that name’s already taken or what have you. So, you know, don’t kill a lot of time on your name, but you do think about it and do make sure that you’re running the traps to make sure that it is a name that you can use. Very good advice. Very good advice. So, you know, I think one of the other things that often comes up and starting an agency is Dhea. Go it alone or do you have a partner or multiple partners? Um, and this is obviously for the people who are not accidental agency owners. I’m all, I’ve seen it a little bit on the accidental side too where, you know, maybe two or three people are all laid off at the same time, either from the same agency or different ones. And they’re like, hey, you know, maybe we should band together, um, and, and do something. Um, so, you know, what, what advice would you have someone for someone who is thinking about, you know, do I, do I start out on my own or do I jump right into a partnership with, you know, two or three other people.
GINI: I think this is crappy advice, but it depends, you know, I mean, I wouldn’t do it because my personality does not lend well to that.
CHIP: You don’t know what you’re trying to tell us.
GINI: I don’t really play nice with others know and I don’t like being told what to do and I, when I have an idea like to run with it and I don’t like to be, have any pushback on that. But I also think it works extraordinarily well for some people. I talked to somebody last week who’s I’m business partners with his brother and another woman who left an agency with somebody else and they started a business together and they’re 10 years in and you know, they, they went from, you know, their late twenties to almost 40 and they both have kids now and they support one another from that perspective. And it was, it’s kind of a fun story to hear. So I think there, I think it depends. I think it just depends on what your goals are and whether or not you have somebody you trust implicitly, um, you know, doing it with a family member. Certainly there are pros and cons to that as well. Um, but it’s, I don’t think there isn’t a right or wrong answer, just depends on what it is you want to achieve.
CHIP: Right? Yeah. I would agree with that. And, and frankly, you know, we could probably just have as the tagline for this podcast, it depends because it depends on every piece of advice. We probably could find an exception where we’d tell you no, that’s actually, that we would not suggest that for you in particular. So I think it is important to understand, you know, for each person what it is that they’re comfortable with, how they work best, how, how they can achieve their, um, their best results in. And frankly, because I’m, I’m a little out of control was starting companies. I’ve actually done almost every one of those things. I’ve done solo, I’ve done with partners, I’ve done with family. Um, and I’m, you know, at some point, I’m sure over the course of the show will end up regaling folks will all sorts of, uh, both the good and bad stories from them.
CHIP: Uh, you know, my, my main advice would be, uh, if you’re, if you’re going to go into business with somebody, just make sure you think about, you know, what happens when and if it, it turned sour, right? So, so make sure that you have all the proper paperwork put together upfront so that if one partner gets bored with it and isn’t putting in the effort or wants to leave for whatever reason or goes through death, disability, divorce, any of these kinds of things, make sure that you’re thinking about those things upfront. So certainly if you, if you’ve got more than one, if it’s, if it’s not just a solo business, you need to put a lot more thought into those legal documents upfront and, and probably invest a bit more, uh, not probably, definitely invest a bit more in that because, you know, you want to make sure that you think about those things when times are good, because when are bad they go really bad if you don’t have a system in place for dealing with it.
GINI: Yeah. It’s almost a prenup for business.
CHIP: That’s exactly what it is. Yeah. And the flip side of that now is that if you are, if you decided to go solo, uh, it does make the sort of the paperwork process easy, but I think it’s important to find avenues of support for your business efforts. You know, one of the things that I’ve found in a lot of my solo businesses is, you know, not having someone to challenge me on a regular basis for my decision making like you, I like to be the boss and make the final call. But I like to have someone push back and say, hey chip, that you’re a little crazy on this idea here.
GINI: I think you can do that with trust, a trusted leadership team. It doesn’t necessarily have to be a partner.
CHIP: Well, I agree, it doesn’t, it doesn’t have to be a partner. I, I, I would argue that a trusted leadership team, it’s a little tougher, um, because I think that, you know, in the back of their minds is always you sign their paycheck. And so, so having someone who is freed from that constraint in some fashion, whether it’s um, you know, uh, someone who’s got a, another agency that’s maybe not directly competitive, but when you can bounce things off of or coffee, um, you know, or, or having a, you know, a business coach or something like that
GINI: or even an accountability partner, I have an accountability partner and we get nothing. There’s, there’s no monetary exchange or anything, but we literally meet every week and sometimes I’m more help to him and sometimes he’s more help to me, but we hold each other accountable, we say at the beginning of the year what we need to accomplish and then we just hold each other accountable to it. So I think there’s something, just something to be said for that as well.
CHIP: Absolutely. And that’s actually something that I started doing relatively recently where I had a friend who was starting his own business right back. She’d been out for a couple years now but was looking to grow it in a totally different space. And so we, we talk every other week now and it’s, it’s a way, particularly since he’s in a different industry, but it has some understanding of what I do and I have understanding of what he does it, it makes for a really interesting dynamic and, and you know, trading some of those experiences. So however you do it, I just think it’s important that you have some sort of a support structure, some sort of a, a sounding board opportunities, you know, those kinds of things in order to make sure that you’re not truly alone because you know, when you’re truly alone, most people don’t necessarily make the greatest decisions. Sure,
GINI: yeah. You make decisions in a vacuum and all those things.
CHIP: Absolutely. So, um, are there other things that, that is a, as someone thinking about going out on their own that, that you think, Jesus, this is, this is really top of mind that you ought to be thinking about before you take the plunge.
GINI: I think the naming, the legal structure, the financial structure, those are the big things at, you know, very, very first. And there’s probably plenty to start with. Of course there’s lots, lots more, but that’s probably plenty.
CHIP: Yeah, those are days, you know, minus 30, minus 15, that kind of stuff. And then you as you get right up to it, you know, then there are other things that you need to think about, but I’m sure we’ll cover those in future episodes.
GINI: Absolutely. Yes.
CHIP: So, uh, with that, I think we’ve, we’ve rounded out our very first episode of the agency leadership podcast. If you’ve managed to stick with us all the way through, well we really appreciate that and we hope that you will, you will give us another shot that, that this was a worthy experience and you will continue to listen and we welcome all of the feedback that you have, any questions that you’d like to see Jenny and I explore or frankly any, any critiques where perhaps you’ve got a different point of view. We love to hear those as well. So, Jenny, any parting wisdom?
GINI: No, but you know as we’re recording this, which is a full week before we release it, but I just looked up the cubs score and we are currently down three to one at top, the top of the eighth for the tie breaking game in. They need to come back. So I’m a little stressed now.
CHIP: Well, hopefully we haven’t stressed our listeners with that because by this, by this point, they’ve got a much better picture by the time they listen in, a week from now, they will know more about what actually happened today. We, you and I, we’re, we’re still in the dark. We don’t have that power to see the future, the power. Yet, if we, if we had the power to see the future, we probably wouldn’t be hosting this podcast. We’d probably be hanging out in Las Vegas or something and making some serious Moolah. So anyway, thank you again everybody for listening and we’ll be right back with you next week.
GINI: See you later.