You may have seen the ad in the business press several years ago. A young woman looks the reader straight in the eye, and says, "Thanks anyway, but I'm taking my marbles and starting my own game."
It's always been a powerful pull -- the desire to run your own business. After all, you're already convinced you could do things better than your employer does. Or maybe you have a unique idea or a special ability. Perhaps you see opportunities just waiting to be taken. Maybe you're just tired of working for someone else.
"There's no one in show management who doesn't dream of going out on his own some day," says Tom Corcoran, who founded Corcoran & Associates, Inc. in 1990, after 12 years of producing the National Restaurant Association's show.
But like all seductive ideas, this one, too, entails risks. The transition from employee to boss is not a simple one. Those who have made the transition say that anyone contemplating the idea needs enormous personal strength, lots of money, a clear objective, lots of money, expertise and experience, lots of money, industry contacts and -- especially in the current economy -- lots of money.
There's no denying the enormous satisfaction that can be realized. "Corcoran & Associates exists," Corcoran says emphatically. "Everything I do is based on the way I want to do it. And we've done some good things in the first year."
On the other hand, you're the one who takes all the risks. "If it doesn't work, you're gone," says Alfred Favata, President of Expocon Management Associates, which he founded 15 years ago.
Industry veterans agree that there are far more risks today than there used to be -- especially if you're thinking about starting a new show. Alan Larkin, Chief Executive Officer of The Larkin Group, says that when he established his company in 1945, "All you needed was the spirit and the handshake. Today, every decision is fraught with contracts and money."
Irene Stella, President of Stella Show Management, began running public shows and fund-raisers 20 years ago. "I started with small local shows. They were profitable then, but they wouldn't be today," she says. "Now you need a minimum of 200 exhibits to cover your costs."
If you're contemplating a move into your own business, it's important to start with an honest self-assessment. Do you have the personal characteristics required for success? First, there's the discipline to make yourself get up and go to work every day, even though no boss is demanding that you do so. But, then, there's also no boss handing you a regular paycheck -- and bills can be powerful motivators.
You need enough confidence in your own ability to be able to persevere despite the inevitable rejection and the early failures. How will you react, Larkin asks, when you make a sales call, and the prospect tells you to come back in a year or so, when you have a track record?
You also need to be willing -- and able -- to take the financial risks associated with starting a new venture. "If you're looking for security, this is not the way to go," warns Bill Weber, who formed MultiDynamics Inc. in 1983 after several years as President of Electronic Conventions Management.
Risks and uncertainty aren't always negatives, however; they can also be exhilarating. So says Gloria Rothstein, who started her company, A Gloria Rothstein Show, in 1971: "I'm a true entrepreneur -- always willing to take a chance. Every show is a challenge, and I love the challenges." But in order to handle those challenges, she says, "You need moxie, you need guts."
O.K. You've decided you have the stomach for it. The next question to ask yourself is, "Why?" Why do I want to start my own business? Independence, control and exploitation of opportunities are good reasons, say the voices of experience; money and prestige may not be -- at least, not at the beginning.
"Some people think this is the route to lots of money," says David Cheifetz, President of Conference Management Corporation, a company he started 16 years ago. "But if you're capable of making a lot of money for yourself, you can make a lot working for someone else." If you start your own business, you'll have to struggle for a couple of years at least -- particularly if you intend to launch a show.
That message is reinforced by Larkin. "People can make far more money working for a successful company than working for themselves." If you insist on starting your own business, he advises, "Be prepared to lose your entire investment, and to put good money in after bad."
Jim Bannister knows how right these veterans are. In 1978, his fledgling operation, Bannister & Associates, took over the management of a ski show that had barely broken even the preceding year, when it was launched. "I thought it was because of the way the show was managed," he says. "I thought I could do better. But I suffered a tremendous financial setback. " He then started a cosmetology industry show -- and lost $98,000. Today, Bannister's company has 15 association clients and two proprietary trade shows. The National Industrial Fastener Show, now in its eleventh year, is the largest show of its kind in the world, according to Bannister. But he had to take a couple of big hits before savoring that success.
Anyone who expects people to sit up and take notice when they see the title "President" is in for a rude shock, says Weber. In fact, just the opposite is true. "When you go into business for yourself, you'll find that you have fewer friends. You're not important to them because you're a start-up." Some of the suppliers who rejected him in his early days are seeking his business now that he's established, Weber says, but he refuses to deal with them. "I remember them the way they remembered me." Thus, he suggests that if you're planning to go it alone, it's wise to develop close relationships now with a small group of suppliers who will continue to support you later on.
He points to yet another letdown: "If you've been used to perks, you must adjust. Suddenly, no limo is there to greet you. And you switch from the Fairmont to Motel 6."
Put prestige and profit motives on the back burner, then, and ask yourself again -- What's wrong with what I'm doing now? Why do I want to give it up? Why do I want to sacrifice security for uncertainty? What can I offer that someone else might consider buying? What talent do I have? What ability or experience or knowledge am I lacking? Is there a genuine opportunity -- a niche waiting to be filled? Get solid, irrefutable answers to all those questions before you leap.
Bannister spotted a market opportunity while working for a service contractor. "It didn't take long to realize that an organization we were working with was struggling to put on its show. I decided that show management would be another service that our company could offer. We would become even more indispensable, and it would be another fee generator." Bannister started a show management division for the service contractor, and found that show management was more interesting and challenging than decorating. But when it became apparent that his employer didn't care to pursue that aspect of the business, he quit. Because his background was mainly in decorating, however, Bannister spent a year with a show management company to gain experience, and exposure, in that arena.
Corcoran saw a different kind of opportunity. "There's room in the marketplace for a company that believes in personal service -- in customer service for the exhibitor," he says. He also voices the necessary confidence in his own ability: "I have a successful process for getting companies to exhibit."
But what direction will you follow with your ideas? Will you start your own shows, manage shows for others, or both? Will you handle all aspects of show management, or only certain parts such as promotion? Considerations of money, risk, expertise and independence get all tangled up in the answers to these questions.
Operating your own shows gives you greater control over your destiny, says Favata. "If you manage a show for an association, you're working with their board of directors, which keeps changing," he explains. For that reason, he says, "Running your own show is more risky in terms of the money invested, but it's less risky from a business standpoint."
If you do intend to start a show, he continues, be sure a need exists. "Spend some time and money researching the idea, to see if your hunch is right. Define the marketplace. Who is the exhibitor? Who is the attendee? What is the distribution system?" This is exactly where many people get tripped up by their own enthusiasm, says Bannister. "Entrepreneurial types are blind. They feel that if they think something is a good idea, the whole world thinks so too. But there has to be a need for a show; you can't force a need."
Even if there is a need, and the idea is a good one, a newcomer faces an additional obstacle, says Favata. "If you want to rent a hall, you're going to have to put down some hefty dollars. The hall might not be willing to gamble on a novice."
Yet another option, says Cheifetz, "Buy an existing show, if you know the industry and think -- the show is under-marketed." Some shows can be purchased for as little as $25,000, he says; others are priced in the millions. If you buy a show, you immediately have property with an existing cash flow, he points out. But the downside is that you have to write a check.
And Larkin presents an intimidating list of the disciplines that must be understood and mastered if you operate your own shows: "Sales, advertising, public relations, merchandising, technical information, union relations, labor law, litigation, contract law, journalism, graphic arts and printing, banking -- and an understanding of general business practices."
Does that mean, then, that the way to start is by managing shows for associations? Many say it's the wiser choice. According to Corcoran, "In an economy like this -- it's as soft as I've ever seen it -- it's good to manage shows for a fee. I have to be conservative because I'm new and not capitalrich; give me an association that will pay me a fee."
Bannister concurs. "People today should start on a relatively low-risk basis. Start with an association that has an established show or an obvious need for a show."
But there are dissenters -- Cheifetz, for example: "If you go to an association, you may be an independent contractor, but you're still subject to their direction. I wouldn't do it because I don't want to work for anybody."
Working with associations may be low risk, but it's not risk-free. "Be careful not to oversell yourself when you make a proposal," cautions Weber, who runs his own shows and also manages association shows. 'Sell them what you're going to do, not how you're going to do it. Don't teach them everything and then watch them take the show back from you."
And when it's been agreed that you will manage one or more aspects of a show, there must be a written contract -- "No handshakes," says Weber. The contract must safeguard your position. Your responsibilities and the client's must be clearly outlined. Otherwise, "If the association has a liaison person, it could get sticky."
[See "Buying Talent and Experience," in the July/August 1991 issue of EXPO for more details on the structure of the management contract.]
In fact, many of those points should be determined even before a proposal is written, suggests Nancy King, one of two partners in Expositions, Meetings, Conventions, Inc. "We insist on talking with the client to find out exactly what they want, what they can do in-house and what they expect us to do as the management company. The questions we ask are different for every client." As a result, the management agreement is also different for each show, she says: "It's customized to the client."
Bannister likes to include arbitration and cancellation clauses in his contracts. The first states that any disputes will be settled by binding arbitration. The second states that if either party does not abide by the terms of the agreement, the other party can cancel the agreement on 90 days' notice.
Cheifetz recommends yet another safeguard: an "evergreen" contract. Such a contract is in effect for a stated term, but automatically renews itself every day unless one party specifically asks to have it terminated. A two-year evergreen contract, for example, is valid for two years from the day it is signed. On the following day, it is valid for two years from that day. And one, two or six months down the road, it will still be valid for two years from each of those dates. "An evergreen contract protects you from being tossed out, which can be a problem when you don't own the show," he cautions. "If you can't get an evergreen, at least try for a three-year contract. You don't want a short-term contract that doesn't give you an opportunity to develop the business."
The contract will also state your fee, which will depend upon a number of factors. In the best of all possible worlds, of course, you would set an hourly rate based on what you want your salary to be, plus the additional income you will need to cover the costs of running the business. Cheifetz points out that the range is vast: "People charge on the basis of $100,000 a year and $500,000 a year." Determining a fee for a particular show would thus require estimating how much time you will spend -- no easy task -- and multiplying those hours by your rate.
Your contacts in the industry should be able to help you further refine your fee structure. "A lot of people shared information with us," says King. "You don't talk specific fees with people, but they will tell you what to include."
Multiplying the number of hours you expect to work by your hourly rate, and adding in expenses, won't necessarily give you the right number, she says. "Some clients need more hand-holding." If you're asked to take on responsibilities beyond those in the original contract, you can ask for more money. But if something takes longer than you had anticipated, you're probably out of luck.
There are further complications, says Cheifetz. "Fees depend on the size of the show, its profitability and how specific your experience is." Those factors could mean that you will earn less -- probably not more -- than you had anticipated.
If, however, your primary responsibility will be exhibit sales, you can often use a simple formula, says Bannister. Multiply the exhibit rental fee by the number of spaces you expect to be able to sell, and apply a commission to that total. He suggests a 15 percent commission for a newly-independent person.
All this presumes, of course, that you will have some clients to pay your fees. Show managers stress the importance of having clients lined up before you quit your paying job, if you can manage to do so. Tap your network for leads. "Go through your current association, or NAEM, or suppliers -- especially the decorators," says Weber. "I'd never try to steal an account from its current management. But it's not unethical to talk to a group that's unhappy."
Of course, the more industry experience you have, and the higher your profile, the easier it will be for you to secure clients. For example, Corcoran's tenure at NRA made him quite visible, and in his off-hours he also did some consulting, helping local groups organize the food functions at outdoor festivals. Because of his reputation, an association approached him to run its show, and that was the beginning of his company.
Eventually, there will be referrals from satisfied clients. And clients may even materialize from unexpected sources. King says that her company attracted so much business from a simple listing in the Yellow Pages that this year she decided to run a display ad.
Now for the big question: How much will it cost to pursue your personal vision? The consensus is that you'll need a cushion to cover your personal living expenses for 18 months to two years -- the length of time it could reasonably take for you to realize a profit.
In addition, you'll need money to cover the seemingly endless business expenses. First there's office equipment, even if you work out of your home: a computer system, fax machine, filing cabinets, telephone with at least two lines -- "You can't have only one phone line in this business," says Rothstein -- maybe a copy machine and probably a postage meter -- "Licking stamps becomes impossible," says Bannister.
You'll need to handle your own insurance: health, life, dental, liability, disability. If it's your own show, add convention cancellation insurance to that list. Hire your first staff person, and you're responsible for workmen's compensation and social security payments. If you're a sole proprietor (see But Can You Type?), you'll pay both the employer's and the employee's share of social security.
Start your own show, says Dean Rothstein, Vice President of A Gloria Rothstein Show, and you'll need at least a quarter of a million dollars.
If you don't have enough money under your mattress, where can you get more? "Venture capitalists won't touch trade shows because they don't provide an immediate return," says Weber. As for banks, "Don't bother -- if you already have all the money you need, then they'll lend you more. What you need is the backing of a publication, or a group of exhibitors that wants to start a show." Otherwise, he says, "You really have to consider a second mortgage."
Although many of them wouldn't start a show management company today, successful entrepreneurs in this industry understand the allure. It isn't easy, and there will be times when you regret your decision, but it's also exciting, challenging and rewarding. "The best part," says Weber, "is that you're the boss. You can do it your way, right or wrong." And when you succeed, you know it's because you did it the right way.
