My name is Gary, I’ll turn 40 this year, am a digital marketeer and not so long ago completed my first eighteen months as the business owner of a start-up. Not to put the kiss of death on it but we’ve done well, in fact we’ve done extremely well. With no funding we’ve grown to a team of thirteen, billed in excess of AU$8 million, have a client base that any company would be jealous of, have built a brand, sculpted an awesome culture, created processes and technology, won awards but most importantly are profitable.
According to myth and urban legend I’m out of the darkest period for a new business. The reality is I’m actually heading out of one of the safest (Under 2% of new businesses in Australia fail in their first year – Australian Securities and Investments) and into the most daunting where just under 40% fail. (Austrian Bureau of Statistics)
In my humble opinion my story is nothing special or new and I’ve not decided to document this momentous occasion for any other reason than I felt I had to. “Something to look back on” when I’ve sold the business for a lazy billion or been provided the Order of Australia for my contribution to industry. Basically the same thing I’ve done with our first client contract, business card and bottle of vodka wishing me success – I’m hoarding.
As all new business owners do, I’ve been consuming articles written by my successful predecessors, trying to understand the essence of what produced that success. The majority of times I leave unnourished. I’m bored of being told the importance of looking after your staff and clients! Why do articles have an odd number in the title or words with no soul and little meaning. No one wants to read about the negatives unless a matching solution is being provided. So I’ve tried to buck the trend and give a bit of my soul, focus on what is working and put some flesh on it. Yes I’ve made mistakes but I’ve also made some shrewd moves that I’m proud of.
Timing
I’ve had two prior opportunities to start a business and without a doubt, I would have failed on both occasions. One of them I pulled out of due to a lack of confidence and the other due to a reason I made myself believe at the time. Beshet, sarà quel che sarà, rien n’arrive par hazard, it always happens for a reason or whatever cliché you want to use I’m glad I didn’t pursue them. The timing wasn’t right when this third opportunity presented itself as I was in the process of buying a property and we were expecting our first child. But I was now ready and this was the key. This was my first correct move – I waited till ‘I’ was ready, had the confidence and the motivation required to make it work.
On starting this business I believed that I now had all the right skills and experience. I could obviously market and promote the business, I’d run P&L’s before, managed teams, account managed, been a salesman and had been relatively successful. The reality is that I had always had a massive support network and my skills were shallow.
Raising Capital
I thought I’d never be able to raise capital, especially for a service based business, but was amazed at the response I had. My pitch was strong but most importantly my forecast was air tight and based on real data. Every party that expressed interest I’d been introduced to by a mutual contact, which was critical, and all had complimentary businesses.
However the best thing I did was not take an investor on. In the short term my bank account took a beating but my business has thrived due its direction being so focused and a lack of pressure to drive profit and dividends. If you believe in yourself and can set up using your own capital then do so, in fact make sure you can.
Finance
Very quickly I realised that managing a P&L when you have a finance director, collections team and tax advisor behind you isn’t running a P&L at all. It’s basic forecasting, reporting on revenue and profitability. The minutia of gst, how payroll tax works, cash or accruals, depreciation and cash flow are all words and concepts I now understand but certainly didn’t a year ago.
As much as you can leave this in the hands of your professional advisors I took the mentality that this is the life blood of my business and I needed to understand it. The learnings were steep but I now better understand my business, it’s financial and resourcing constraints and how to increase its profitability. This ability to control and subsequently augment the blood that flows through a business is critical to any start-up and should never be left to someone without the vested interest you have.
Professional Advisors
We often come across potential clients who think they can run a better marketing campaign than we can, even though my team is trained, qualified and highly experienced. I never understood this irrational thought. Digital marketeers are well paid for a reason yet potential clients think an intern can run their digital marketing on a wing and a prayer.
Having understood this it was never a consideration, I was always going to surround myself with the best advisors and pay good money for them. I’ve not been wasteful and these people are not fulltime but I’ve a tax accountant, lawyer, sales strategist and CFO whom I see as an investment. Their time and advice saves me time and money, it doesn’t cost.
Over Servicing
I hope this isn’t putting the kiss of death on it but we’ve managed to pick up at least one new client per month and we’ve not invested a cent in marketing and don’t have a business development team. New clients are being generated by referrals and it’s due to over servicing our client base. Not to the extent that we’re not profitable but to the extent that we’re not greedy. Over service, clients invest more and pass your details onto their peers, it’s a simple formula that we’ll continue to use.
Value Your Services
Just because there’s money on the table it doesn’t mean you need to see the flop. Turn down clients or projects that don’t fit your business as the time invested into them will detract attention from your game plan. A quick buck is exactly that, helping you in the short term but hindering your long term strategy of building a business.
Weak Links
The smaller the team the larger the detrimental effect a poor performing employee will have. Be quick to help them perform but don’t waste time if they don’t step up, move on and find the right person to help you grow your business. Just because you’re small and embryonic doesn’t mean you can’t attract the best, I’d suggest it means the opposite. I’ve learnt that the best people want to work somewhere where they are accountable, can make a difference and control their destiny. Remember that a probation can be extended and if you’re still not sure about that employee, you’ll never be.
Over Resourcing
I don’t suffer fools and many people will lay testament to that. I only want the best to work for me so I can’t be rushed into finding resource. I need to plan and take my time so am recruiting prior to having a requirement. Large businesses have too much bureaucracy to take that approach but the only thing holding me back is my own fear of not succeeding. I’d rather have a less profitable period knowing that my clients are being over serviced and that when I land my next, I’ve the cavalry ready to charge. As a by-product this increases staff morale.
Enjoy Spending
Spend money and enjoy it. Don’t wait for your best employees to be disenfranchised and ask you for a pay rise. Take the initiative, surprise them and have them recommend your business to their peers. Money can help build culture – subsidise / pay for the business to play sport, go out on quarterly events and it’s amazing what buying a round of Gaytimes on a hot summer day can do to build culture. Clients want to work with people they want to socialise with so make sure your social interactions are fun and worth attending. I’d suggest that spending a percentage of the revenue generated from a client into socialising with that client is a sound investment.
As I set out from the beginning I don’t believe my story is any different from 1,000’s of others but as every day passes I’m more confident I’m going to in the 60% of start-up’s that succeed past four years.
I love what I do, digital marketing is an evolving and fascinating industry and as a business owner the stakes are much larger and therefore the enjoyment that much higher.