How to Start Your Own Business

“Prepare Now, Because The Day Will Come!”

By George S. McQuade III

“I started my own agency on a fluke,” said Murray Weissman, president, Murray Weissman & Associates, Los Angeles. Murray was amongst eight Entertainment Publicists Professional Society (EPPS) Panelists at the recent (Oct. 16, 2208) media workshop “Mechanics of Starting Up Your Own PR Firm.” It was held at the ICG Headquarters in Hollywood.

“I knew I was going to leave Rogers & Cowen and I would be calling around town for another job, so I let them know in front, and also called a good friend of mine, the late Thomas M. Pryor, who was editor of Daily Variety,” said Weissman. “For some reason he put my story on the front page of Variety, and I said, ‘I’m leaving to form my own PR agency,’ and that resulted unbelievably in two clients coming in to follow my leave, and boom, I was in business.”

Weissman also said, be prepared, have confidence and use all that background experience to be successful when starting your own PR firm. Weissman’s first client was Charlton Heston, and the movie “Mountain Men.”

“I say to everybody in this room, and if you work for a big company, prepare now, because the day will come when you’ll use all of your good contacts that you’re making with your different clients. They’ll come back to you, you’ll learn from them, and they will become valuable assets in the future. Some where down the line when you work for big companies as I did, like ABC, CBS, NBC and Universal for 10 years. The day will come when there is a management change and they’ll show you the door.”

“If you are ever in a position to help someone start their business you should do that,” said Madelyn Hammon, Chief Marketing Officer, Variety, who started her own business and went back to corporate life. Madelyn moderated the workshop. “If you are ever in a position where you are really successful, and got a spare office, and someone is going on their own, you should say, ‘come here for awhile, because that will make all the difference in the world.”

“When you start your own business you need to plan how you get clients, but also how you plan to organize your life,” said William Vu, Esq. Lawyer, Los Angeles. “There isn’t one thing, there are a lot of risks that have to be managed, you will need office space, but more importantly how you plan to organize your life.”

“My situation was a little different from Murray’s, said Stan Rosenfield, president & founder of Stan Rosenfield & Associates. “I had had worked for a very successful company, and I had always wanted to go out on my own. I read an article about the Master’s Gold Tournament, which said, ‘The average age of a Master’s champion was 33, however if you had not one the Master’s by the time you were 28, you were not likely to win it.’ I equated that to going out on your own. I did not want start out on my own when I was 45, but I didn’t quite know what or how I wanted to do it, and spent one year at the former company doing nothing but planning my company, developing a mental business plan.”

Rosenfield, who started his company in August, 1975, suggested creating a business plan, and obtaining a line of credit to start your company. Rosenfield’s first client was Actor Bruce Dern, and his friend who was general manager of KHJ radio in LA, and I had the movie “One Flew Over The Cookoos Nest,” (starring Jack Nicolson), and there were a couple of actors in that film that I had talked to, because we were representing the movie. Three or four actors came with me.”

“I operated the first three months on adredeline alone, but that’s how I did it. My former boss used to say ‘eight phone calls then I am out of business.’ You could lose your company if you get four or five phone calls saying ‘you’ve been really good for me, but I want to go a different direction.’ There’s no protection against that, because personal service contracts are not valid unless they have a 30-day out clause, and clients can leave you. I had very loyal clients,” said Rosenfield.

“I actually started my company out of burnout,” said Amy Prenner, The Prenner Group. ‘I ran publicity for Wheel of Fortune for five years, and I spent half of every month on the road. It got to the point where if you knew the city, I knew the journalist. I knew the radio person, media affiliates, so I felt I built a great basis for anything I wanted to do. I decided to leave after going to the same markets (media) again, and I realized maybe it is time to do something else. Slowly through the contacts I’d built, I put the feelers out just to see what was going on, and what was out there without even trying, I started getting clients. Right as I was leaving (Wheel of Fortune) I started getting referrals left and right. I took in a lot of meetings, but I knew I wanted to stay in television, since I had been working TV for nine years, so it is what I know, if I couldn’t work for someone, I would do it on my own.”

Prenner said about six years ago, she felt like, she was too young to handle it and wasn’t ready, and that she didn’t know how to handle money, billing, retainers and “chase things so, it fell apart really fast. Be sure you know what you are doing before you jump in,” she said. Her first client was on TLC (Discovery Channel) called Big Medicine, that stapled people’s stomachs.”

Contracts and unpaid billings

“Letter of agreements are okay, but I like to see contracts, because that’s the kind of lawyer I am,” said Vu. “Relationships are built on trust, and I like paper, but you have to maintain that relationship with your clients, so they will stay with you year after year.”

“When an independent film company comes in we have a letter of agreement, we have do an indemnification clause, which I highly believe in so you don’t get sued, and you incorporate your company, so they don’t take your house away if there is a legal action. If we haven’t dealt with this client before, we require two months fee in advance, along with a $1,000 for expenses, which is accounted for, so we know we’ve got that in the bank, before we start working,” said Weissman.

“I agree and it is a great idea," said Dan Harary, president & founder, Asbury Public Relations, LA. “Most of my clients are small little boutique companies or big marketing agencies, and multimillion dollar clients thank God. But, for the smaller ones, I have lunch with them, I shake their hands, I look in their eyes, I get some references, and I have to go with my gut. In 12 years I’ve only been screwed a few times. My second year I was screwed for about $40,000, and several companies had gone bankrupt.

When talking about fees, Harary drew a huge laugh from the audience when he said, “I’m like the Wal-Mart of PR. I don’t care about quality; I go for quantity of clients.”

Harary said fees could range from $500 for startups working out of their apartment to $5-$7K. The average amounts to $3,000- $5,000 per month. Most of the panelist believe in getting fees at the beginning of the month, before work begins. On larger accounts some publicists like Weissman ask for half the funds upfront, which are placed in an escrow account.

“I wish I had the leverage to ask for payment upfront, however I am third party of some film projects. Always get something in writing with expectations written down,” said Caroline Rustingian Bruderer, owner, K-Line & Company. I always ask for some kind of contract, because some clients will say you didn’t what you said you were going to do. So cover your asses,” she said.

“I have a one page agreement, which includes an indemnification clause and works well for all my clients,” said Weisman. “Both of us sign and date it after we agree on the scope of work.”

“Homeowners will not cover your business if you use your home or apartment for business,” said Michael Mesnick, CPA.

“You need liability insurance, and obviously you need workers Compensation Insurance and malpractice insurance in the even of a lawsuit. Anyone who does not get malpractice insurance is a fool, because you can get into a situation, and I’ve known this to happen to two people, one of them was a friend of mine and business manager, who got sued by two of her employees in a sexual harassment case, she said it didn’t really happen, but the two employees collaborated with each other. It cost her a $250,000 to settle the case, and it cost $3,500 a year to have the malpractice insurance. It protects you against an employee suit. If a client, for whatever reason wants to sue you, you can be out of business, lose your home and you can lose everything.”

Attorney Vu says to protect yourself you need to be incorporated, because letter of agreement you sign with the client is with the company. If you do not have a good business support team on your side and get great advice, you’re making a huge, huge mistake. You need a good accountant, and a good labor attorney. You are running business, which has nothing to do with the creative aspect of being a publicist. Other panelists agree adding a bookkeeper and Information Technology expert to the list.

Last piece of advice; do not get rid of your company insurance until to secure health insurance for your new company.