Why my business failed: ex-advertising entrepreneur offers a first-person account of the demise of his New York agency - Charles N. Jamison, Jamison and Associates Advertising Inc

Black Enterprise, June, 1994 by Charles Jamison

WHEN CHARLES N. JAMISON Jr. started his own advertising agency with a partner in 1987, it seemed like a sure-fire formula for success. He launched his business in the same industry where he'd planted his roots. An ad man for more than 10 years, first with BBDO (Batten, Barton, Durstine & Osborn Inc.) and then with Ted Bates Advertising Inc., Jamison had been the first African-American vice president at Bates. His partner, Kathryn Leary, was the second black up there.

He capitalized on a solid relationship with his former employer by starting a business that was a natural offshoot of work Bates was already doing, and he and his partner landed Bates as their first big backer.

Jamison and Leary had all the right contacts and built a business with a diverse mix of some of the biggest corporate clients in the country. In its heyday, their agency produced the equivalent of $5 million worth of billings, successfully juggling six or seven clients at a time, and employed 12 full- and part-time people.

Despite all that, by the beginning of l992, the agency had gone belly up. What went wrong? Let Charles Jamison tell you in his own words about the mistakes he made along the way. You may well learn how to prevent the same thing from happening to you.

For nearly five years I ran an advertising agency, Jamison & Associates Advertising Inc. (originally Jamison & Leary Advertising).

Starting out, I believed that I knew a lot about making advertising work. I proved to myself that I was right.

During our glory years, we did work for such large clients as Bacardi, General Foods, PepsiCo., TIAA-CREF, NYNEX, Dow Jones & Co. Inc., and M&M/ MARS, as well as for black clients like Emerge magazine, Yaska Shoes Ltd. and the Alvin Ailey American Dance Theater. We did video, television, radio and print. We sold a lot of goods, services and tickets. We even won a CEBA (Communication Excellence in Black Advertising) our second year out.

The agency is closed now. A victim of the most recent recession. Bankrupt. Chapter 7. History. Past tense.

What I learned, somewhat painfully, was that knowing how to create effective advertising doesn't necessarily mean that you're going to know how to run an advertising business. During a recession, which is what we ran into, it's easy to say that the economic climate is the cause of a business, demise. But there is usually more to the story than the most obvious answer. Along the way, I learned some things that I wish I had known before I got started. If you're thinking about running a business, I've got 10 tips to consider that may prove helpful to you along the way.

1. Be sure to have more than one major backer. When we started the agency, we put all our chips in the same basket. We launched the business as an arm of Bates, our employer at the time. We capitalized on Bates, entry into strategically focused market research. Bates already had a Hispanic ad agency. So, it seemed natural to build a business that offered psychosocial data on African-Americans. This information would give Bates clear-cut ways to predict how cultural differences among blacks affect the buying habits of different segments of the market.

Ironically, just as our agency was about to turn profitable, Bates dissolved the relationship. The reason was no one's fault and had nothing to do with either side's respect for the other. I still do business with Bates (now Backer Spielvogel & Bates). It was simply that Saatchi and Saatchi, which had purchased Bates, had a different set of business priorities.

Despite all this, our agency survived for four more years. But the loss of that early backing definitely affected our ability to weather the financial storms to come.

The motto of all this? Never assume that all the business givens will stay that way, and be sure to line up a diverse set of backers early on in starting your firm.

2. Sell something people want to buy. When I went into business, I believed that my agency would provide a necessary and potentially profitable service in the marketplace.

I spent nearly a decade in large general market advertising agencies learning how to develop award-winning strategic advertising. I also have a Ph.D. in psychology, where my primary research had been on black culture. Furthermore, I had sole access to a large database on black consumer preferences, attitudes and media behavior.

I was convinced that if I had an opportunity to present a story to a client about their product or service, then they would have to give us the business. I had been on enough new-business pitches to know how this works. How could we miss? It didn't work. We made pitch after pitch presenting data to marketing managers about the black consumer presence within their brand products. Instead of giving me the business, they would (a) praise me for giving them better insight into and a more sophisticated understanding of the black consumer market, and (b) tell me that despite this compelling story, they didn't feel the need to target this consumer base.