By Derek Reveron
Last year, Julia Kozinevich lost her job as a meeting planner with a New York City-based corporation and started searching for another position.
“I realized there was nothing in the market,” said Kozinevich, who has about six years of experience as a meeting planner. “This year I finally realized I could do this all on my own at home. Based on what I see, big companies are looking to outsource on a contract basis. I’m networking and talking with people in the industry to help clarify what I need to do to start a business,” said Kozinevich. She started attending seminars for professionals who want to start their own businesses. Kozinevich participates in educational workshops and networking sessions for entrepreneurs at a local chapter of Ladies Who Launch, a new media company that provides resources and connections for female entrepreneurs.
After educating herself about startups, Kozinevich will write a business plan and retain a lawyer and accountant. Meanwhile, she is networking to line up contacts within corporations.
Why are meeting planners like Kozinevich starting their own businesses during a never-before-seen economic crisis?
Due to the cutbacks in corporate spending on meetings and staff, there is a need for savvy solo planners who can provide a range of budget-friendly, value-added services. Meeting planning entrepreneurs who offer such services can get a foot in the door to eventually help corporations develop and implement strategic meetings management programs when budgets increase.
The Experts Speak
That’s the basic message from two experts who advise meeting planners on starting their own business. One of the experts is Jonathan T. Howe, general counsel for Meeting Professionals International (MPI) and a senior partner at Howe & Hutton, a law firm with expertise in the meeting and hospitality industries. The firm has offices in St. Louis, Chicago and Washington, DC.
The other expert is Consultant Rod Abraham, who has firsthand experience starting a meeting planning-related business during an economic downturn. Abraham founded Durham, NC-based Professional Meeting Planners Network (PMPN) in 1982 amid a recession that some experts argue was as deep as the current economic slump. PMPN offers a nationwide network of planners who are placed with clients on a project basis. Abraham now runs R.E. Abraham Consultancy based in Durham, NC.
Abraham and Howe say that now is a good time for meeting planners who lose their jobs to start their own businesses targeting corporate meetings. The two men presented a session at MPI’s MeetDifferent conference in Atlanta last February entitled “Starting a Business in a Time of Economic Crisis: Are You Crazy?”
Howe admitted that initially it may seem counterintuitive to suggest that meeting planners start their own businesses in the current economy.
But he explained why such a plan can work now: “Although companies are laying off some or all of their meeting planning staffs and reducing meeting budgets, they still have plenty of meetings to plan. Layoffs don’t mean that companies don’t have meeting jobs that can be done from an outsourcing standpoint. Planners who show they can help companies be cost efficient in the long run will be in the biggest demand,” said Howe.
That’s exactly the philosophy of Esther Teodoro. She launched her own business targeting corporations and non-profit groups in January after losing her job last fall due to the drop in the number of meetings that companies are planning. Teodoro was director of event management with Seattle-based CRG, supervising the planning of all types of corporate meetings and events, as well as conventions and trade shows.
Teodoro started BigGigs with partner Patty Foley, who lost her job last fall as events director and account supervisor at The Bellwether Group, a fundraising and consulting firm in Seattle. The partners, who work out of their homes, target corporations with two primary messages: a combined 30 years of experience planning meetings, conferences, training sessions, events, conventions and trades shows; and the ability to bring top value to small and large corporate projects while developing a long-term strategic meetings management program that can be implemented when budgets rise.
Teodoro explained: “Our primary focus is to help corporations leverage their meetings and event strategy to get the biggest bang for the buck. We can address needs whether immediate or future. But we want to essentially prime the pump for future business. A lot of companies are very skittish about spending money right now but at some point they will. We explain that we understand that, but you have to be ready so that when you want to execute, you have a plan and can literally run out of the gate and won’t be left behind. Our ultimate goal is, when they are ready to execute, they will remember the conversation with us about strategic meeting planning and think of us top of mind.”
Shape The Business To Fit The Times
Abraham and Howe said that meeting planners like Teodoro who start their own businesses now can shape them to meet the needs of a corporate meetings market that is being changed by a deep recession.
“Each time there is a recession, fewer companies go back to doing it exactly the way they had been doing it after the recession ends. This time, outsourcing will be a big part of that. Most companies that try outsourcing meeting planning probably won’t go back to a full staffing model,” and that creates a market for startup meeting planning businesses, said Abraham.
Howe noted that when the economy recovers, “It won’t be business as usual (for corporate meetings) because you will have the ongoing aftershocks of what has transpired. There will be new approaches. The value of a meeting will be judged by whether it has a positive impact on the company. There won’t be so much razzmatazz. The fun element won’t be taken out because people learn through fun activities. But the primary goals will be to control costs and use meetings to meet business objectives,” said Howe.
That means independent meeting planning entrepreneurs who court corporate business must demonstrate how they will deliver a good return on investment (ROI). Howe offered this tip for meeting planning business startups: After handling a meeting for a corporate client, ask if the ROI was satisfactory and always look to improve it for future meetings. Don’t hesitate to negotiate higher fees if the ROI exceeds the corporation’s expectations.
Sound Advice
Howe and Abraham offer the following advice for new meeting planners looking to start their own businesses.
- Use all current corporate contacts to open doors to potential business, and network to get new sources. “The contacts may be in human resources, procurement, sales, marketing or meeting planning. Wherever they are, they can run interference for you. That’s much better than cold calls, but you also have to do that to generate leads,” said Abraham.
- Don’t forget former employers. They often are the first clients for meeting planning entrepreneurs, added Howe. Teodoro, who has never spoken with Abraham and Howe, is practicing the strategy they suggest. “We are delving into our network and telling people we are out there. The people we talk to at the companies depend on the contacts we have,” she said.
- Establish priorities when targeting corporations. “Make your priority companies that are decimated by meeting planner layoffs and don’t have an outside third-party planner, because they don’t have anybody to do the job. If a corporation already uses an independent planner, there’s at least a 50-50 chance they are happy with the person,” said Abraham.
- Find out the needs of a company before meeting with its representative. Figure out how to address the needs, no matter how big or small and no matter what kind of meeting is involved — sales meeting, board meeting, training session, corporate dinner or other function.
“Don’t necessarily target the large meetings right away. Do the small pieces and come back for the bigger pieces,” said Howe. While handling the projects, “Always find a way to pitch strategic meeting services,” Abraham added.
That is Teodoro’s strategy. She tells potential corporate clients: “As budgets grow incrementally, we can handle small pieces. It can be as small as the budget management piece. Or if an administrative assistant is putting together a meeting and doesn’t understand banquet contracts, they can bring us in for that without spending large dollars to do it. Or we can build a strategic meeting strategy so when their budgets are better they can execute it.”
- Stress that an experienced one- or two-person shop can provide more value than a large business or a full-time corporate meeting planning staff. Such an approach helps small independent planners compete with larger shops. For example, Teodoro said that their capital needs have been minimal. She and her partner work out of home offices. Teodoro’s husband, a senior programmer at a technology company, developed BigGig’s Web site and a graphic designer friend created a logo for free.
Abraham said a key part of the pitch to potential corporations should be: “I have a way that you can transfer the fixed costs of staff to variable costs by using me only when you need me. Use my services until you are in a position to reevaluate and possibly build your meeting staff back up. But talk to me before you do that because I may have a better solution for you even then.”
Again, that’s exactly what Teodoro does. “We say we are a two-person shop. We can bring on more people if needed, but what you get is 15 years of experience with each person. When other (independent meeting planning companies) said they need a staff of six, we can do a lot of these things in half the time with less staff because we know the best process,” said Teodoro.
A Business Attitude
Howe advises meeting planners contemplating a business startup to ask themselves the following question: Am I a meeting planner going into business, or a business-minded person going into meeting planning? “Which attitude you take makes a big difference,” Howe said. “You should be a business-minded person going into meeting planning. You can be the greatest meeting planner in the world but you may also end up the most broke unless you pay attention to the business side.” C&IT
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The Steps To Success |
According to Jonathan T. Howe, senior partner at Howe & Hutton and Rod Abraham, consultant, R.E. Abraham Consultancy, most meeting planning business startups fail because the owners lack the funds to remain in business until they can make a profit. They may be good meeting planners but bad business people or they can’t juggle the sometimes overwhelming mix of meeting planning duties with business management responsibilities.
Howe and Abraham suggest that meeting planners who want to start a consultancy carefully consider these steps to increase their chances for success.
- Write a business plan. Even if the plan is never submitted to a bank or anybody else. “Focus on your vision and strategy and how you will do things differently,” advised Abraham. “Analyze competition. Include how you will get business and price business. Estimate capital needs. How much do you need and how long can you get by on savings? Do you need a partner?”
- Keep overhead low. “You don’t need an office in a building to impress people,” said Abraham. “One of the advantages of starting this kind of business is that it requires a minimum amount of capital. Work out of your home but take on the trappings of a business. Put in a separate phone line and don’t allow disturbances like a dog barking or kids screaming in the background.”
- Be a sales person. “A real challenge for people in our industry is that they are superb meeting planners but not necessarily good sales people,” said Abraham. His suggestion: Meeting planning entrepreneurs who lack sales skills should seek a meeting planning partner who has those skills or hire one of the many unemployed sales people and pay the person a small commission.
- Think carefully about which business format fits best. Many meeting planners who start a one-person, home-based business initially organize it as a sole proprietorship because it’s an easy way to structure the operation. However, sole proprietors are personally at risk for legal liability. Other options include partnership, limited liability corporation (LLC) and private corporation. Howe and Abraham advise meeting planning entrepreneurs to investigate which option best suits their circumstances by seeking advice from an attorney knowledgeable about small businesses.
- Have the right attitude. “You have to make sure you have the entrepreneurial spirit and know that you won’t be raking in a lot of money right away,” said Howe. “Understand that for the first several months or year you will likely have minimal or no cash flow. Make sure you have a nest egg to fall back on for business and personal expenses,” he added. — DR
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