ADPR5910 Exam 2 Lecture Notes 7

ADPR5910 Exam 2 Lecture Notes 7 - -Outsourcing-Adding...

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ADPR5910 Notes 3/29/2011 Agency management: How do we make $$$? - Revenue o Hourly fees/retainer(flat fee)/project fees o Mark-up expenses o Administrative fee - Expenses o Personnel Salary Benefits Training - Overhead o Real estate o Technology - Going up! o Billable rates o Billable expectations o Project prices o New products or lines of business o Develop products with high margins - Controlling expenses o Personnel o Marketing, sales o Write downs o Write offs o Missing revenue Agency Management: Key terms - Realization- the % of billed revenue a firm actually charges its clients and is paid for - Utilization- the % of foal that a person actually bills, i.e. average 6 hours billed of an 8 hour goal is 75% utilization - Revenue- total dollars into the firm in a year - Expenses- total costs out - Margin- the % difference in revenues vs. expenses. Revenues $1 mm, expenses $900k, margin is 10%. Industry standard 15-30% Agency Management: financial tools: Overstaff = utilization goes down - Annual budgeting - Carful hiring *staffing and projections)
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Unformatted text preview: -Outsourcing-Adding branded/creative products that generate revenue-Cash flow management-High utilization/realization-Track daily revenue and provide realistic billable goals-Managing write-downs and write-offs-Watch aging of receivables Client Account Billing Structures-Retainer-Hourly-Project-Crisis Client Budgeting-Take your time-Spreadsheets-Use hard factual numbers (don’t make them up!)-Clients and Profits (computer program for budgeting) Survey Key Findings-Highest cost for PR firm?-Building business (best way to grow) o Do good work for existing clients and grow that work/account o Ability to pay more over time-Most profitable people in firm: entry-level; younger o Billing more hours per day o 32,000-37,000: entry-level Interns-Experience -Creativity (published somewhere else)-Great communicator -Presence on the web o Have something out there o Example: start own blog o Creative pitch for yourself...
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