Letters on the glass entrance to The Creative Spot, a start-up advertising agency, read “Thinking hours: 8 a.m.-8 a.m., Monday-Sunday.”
For the three co-owners of the downtown business, the words hold true but belie the underlying struggles they face.
How do they strike a balance between the structure necessary to run a business and the creativity essential to their expertise? It’s a question whose answer is apt to chart the company’s future success.
When Mitch Greenwald, Mike Flegle and Chris Rankin joined forces in 1997, they made a decision to grow methodically.
“We want to develop ourselves like we do a client,” Greenwald says.
The biggest challenge, however, has been to meet that goal. The three are so busy servicing more than 35 clients and keeping their time flexible to promote creativity that they haven’t developed a growth strategy of their own.
“We still haven’t really focused on the way we wanted The Creative Spot to be perceived,” Greenwald admits.
The time to do that has come.
A firm foundation
The Creative Spot idea began in 1986, when Flegle and Greenwald met in an advertising class at The Ohio State University and talked about how they’d like to own their own agency one day.
Their paths parted until May 1994, when together they launched The Creative Spot, a marketing business, as a C corporation out of Flegle’s home.
Their struggle with structure versus creativity started from the very beginning.
“I had always worn a suit to work,” Greenwald says. “The day before we started, I called Mike and said, ‘What are you wearing tomorrow?’ We both started laughing. We sat in his house and we both had sport coats and ties on and started making phone calls.”
Those calls were intended to add structure. The two methodically sought advice from people they admired in the advertising field and business owners they respected-such as Shelly Berman, founder of SBC Advertising, and Carroll Conklin, executive vice president and director of strategic services at Lord, Sullivan & Yoder Inc.
Then Greenwald and Flegle developed a business plan. They each put in $5,000 for start-up costs and opened “with zero clients,” Flegle recalls. It wasn’t long, however, before those networking calls and meetings spread the word that they were in business, and clients came calling.
Their business continued to grow until, again, structure clashed with creativity.
“Because Mitch and I did the marketing and concepting and writing part of the business, we needed someone on the art side,” Flegle says.
That’s how Rankin got involved. During this time, Rankin had graduated from The Columbus College of Art and Design and launched his own business, Graphic Visions, using a computer his parents bought him, freelance money he had saved during college and $700 that his grandparents had saved for him.
Rankin can trace every one of his clients back to one business card he placed on a bulletin board at Long’s Book Store. That card was picked up by Jenean VanBreene of Fun-n-nuf Inc., a 10-year-old bookmark design and manufacturing firm in Columbus, who was pleased with his work and recommended him to other people. It snowballed from there, but Rankin says his business, a sole proprietorship, was limiting.
“I was doing design work, taking things given to me and making them look good. It wasn’t a marketing campaign,” he says.
When he began working on a promotion for Ebner Properties’ loft/condo complex on East Rich Street, he realized he needed more than his design skills. He needed advertising help.
He consulted his girlfriend (now his wife) who worked at a graphic design firm. Her company had used The Creative Spot, and she suggested he call Greenwald and Flegle for help.
While working on the project, Flegle and Greenwald invited Rankin to partner in their business. Rankin set aside his independent business aspirations to join the partnership. The three decided to keep the name The Creative Spot for the new company, which after input from financial advisers, they re-established as an S corporation.
Building the partnership
Structure reared its head again when the three partners decided to purchase office space in the Rich Street Lofts building a month after founding the new company.
On advice from attorneys and financial advisers, they formed a limited liability company, Hangnail Ventures (the name chosen from a James Taylor song, since all three are fans), to buy the space. They each contributed $8,500 toward the down payment, which they’ve repaid to themselves as The Creative Spot brought in profits. The Creative Spot makes lease payments to Hangnail Ventures for the space.
They purchased not only the 1,300 square feet they use but another 1,600 square feet, which they lease to The Rich Blend coffee shop. The additional space provides an extra source of income while giving them room to expand, or a potentially better asking price if they decide to sell later.
Operating under the same roof increased productivity. They try to limit their office hours to 8 a.m. to 7 p.m. to maintain a life outside the business-all three have married since starting their businesses, and two recently purchased homes.
It’s there that the structure stops.
Rankin, Greenwald and Flegle have no titles-they’re all equal partners in the business. They use no time cards for themselves or their two employees, Jason Schmall, a copywriter hired in January, and Mike Hempfling, senior art director, who joined the company in May.
Their office space is not divided into sections or cubicles. In fact, a Ping-Pong table, which they use as a tool for brainstorming sessions, sits in the middle of the wide-open space.
So far, that lack of structure hasn’t hindered the company.
Last year’s revenues reached $600,000, and the partners have made a profit and taken salaries since the 1997 reincorporation. The company’s only debt is the $102,500 mortgage on the Rich Street space.
Their client base, which includes Doctors Hospital, Sterling Commerce, The Longaberger Co., Banc One Corp., Park Medical Center and Westerville Athletic Club, has come from past contacts of the two previously separate start-up companies.
“Every single client that’s walked in the door has come to us,” Greenwald says. “And that’s all by design. What I mean by that is, we wanted to first develop that good reputation before we go out and announce ourselves to the world.”
All dressed up and don’t know where to go
Rankin, Greenwald and Flegle enthusiastically share their philosophies and history regarding The Creative Spot. In fact, only one question is met with silence: “Where do you go from here?”
Flegle says the biggest challenge they’ve faced in starting the business is growth. They haven’t even had a chance to update the business plan that Greenwald and Flegle first developed.
“We’re so busy doing everybody else’s work,” Flegle says. “It’s mentally draining.”
“We’re slowly but surely defining those areas we want to attack and trying to set aside time when we can slowly develop a plan and attack those areas one by one,” Greenwald says. “We’re trying to decide who we want to be when we grow up.”
One area in need of attack, for example, is developing a system of how jobs flow through the agency.
Again, the balance must be struck: With little structure, the three can be more creative and keep their competitive edge, Greenwald says. But without enough structure, work could fall through the cracks or deadlines could be missed.
Another area needing work: figuring out a way to educate clients about the importance of marketing services.
“We’re in such a subjective business,” Flegle says. “It makes more business sense if a client can understand what the value of marketing and advertising is.”
They also want to take time to better define the value they offer and prices they charge.
Jim Fette, a senior manager for Qwest Communications International (formerly LCI International), which is one of The Creative Spot’s largest clients, says the
partners are price-competitive almost to a fault.
“They’re so much under what other people are charging that they’re almost undershooting based on the value that they’re providing,” he says.
“We really love what we do, and sometimes that hampers your judgment,” says Greenwald, noting that one of his biggest rewards is having a client call after an advertising campaign to say that his or her company had its most successful weekend ever.
Until they determine how they want to grow, the partners are running the business according to their primary goals-to be creative and have a company where employees enjoy working.
“Work’s gotta be fun,” Rankin says.
“We want to have a place where clients look forward to meeting with us or dealing with us and they would tell anybody about us,” Greenwald adds.
So how do The Creative Spot owners answer the question about their future plans?
“That’s the blank canvas,” Greenwald says. “It’s what we are stressed about, but also ultra-excited about-to develop this company that we’re proud of.”
Creativity and fun.
For now, those goals are keeping The Creative Spot successful, but without a plan for the future, the company could hit some rough spots, say outsiders who have watched the company grow.
“They have to deal with these issues. They cannot just sweep them under the carpet, or it would be disastrous,” says Shelly Berman, founder of SBC Advertising and chairman of Xtreem Creative Inc. in German Village. “They have to develop a long-range plan and work as hard at executing their own plans as they do for their clients.”
Two of the Creative Spot partners, Mitch Greenwald and Mike Flegle, contacted Berman for advice when they started the precursor of the company in 1994. Since then, Berman has used them and their new partner, Chris Rankin, for projects of his own.
“I can say that all three were terrifically creative,” Berman says. “They really represent themselves well with creative work that would make you step back and say, ‘Wow.'”
The Creative Spot’s lack of direction doesn’t bother Jim Fette, a senior manager for Qwest Communications International Inc. (formerly LCI International), one of the company’s largest clients.
Fette appreciates the partners’ rapid response rate, which is crucial in his competitive industry, and he likes their writing style.
“I know that with the established relationship we will continue to work with them and use their ideas,” he says, noting that The Creative Spot co-owners have mentioned to him that they don’t have time to plan for the agency’s future. “I think it’s something they need to determine, whether they want to be full-service or continue to do project-type work. They’re good with the creative juices they’ve got flowing.”
“Probably the first impression I got from them, and it’s probably the correct one, is it’s just a fun place, a fun group of guys,” says Jonathan Kelley, president of a Mentor start-up called The Pizza Market. The Creative Spot has developed a logo, an ad campaign and a theme for the company, which makes pizzas with fresh toppings and wraps them so customers can bake them at home.
“What they did for us was take our ideas, our thoughts, our marketing philosophy and put it into an organized, focused program that we could build upon,” says Dave Kelley, Jonathan’s father and vice president of The Pizza Market.
Berman, however, reiterates that in order to continue their success, the three partners need to begin by making time to develop a plan for where they want to be five and 10 years from now. One way to start that process, he suggests, is to contact the American Association of Advertising Agencies, a trade association that helps agencies in The Creative Spot’s position. He also suggests investing in employees to run the business side, such as a CFO, to create an infrastructure for growth.
“Another thing they need to do is create a board of directors, a small group of business people who will monitor the business and make suggestions and demand that the company is accountable,” Berman adds. “When you form a board of directors, that forces you to be responsible to yourself and not just to your clients.