Most businesses fail not because their owners aren’t good at what they do.
A design studio doesn’t generally fail because they create poor designs.
A dentist doesn’t generally fail because he cannot fix your teeth.
Most businesses fail because their owners don’t understand how to run a business.
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As a design entrepreneur, this is the single most important fact you need to understand. If you as a designer can learn how to run a business well, your business has a much greater chance for success.
As a Millo reader, you are already well on your way to becoming a better entrepreneur! Follow the tips below to avoid several less talked about mistakes that business owners make.
(A note from Preston: the following information from April is priceless! If you enjoy it as much as I did, I invite you do dig even deeper. The theory she discusses here is explored in more detail in one of my favorite business books The E Myth by Michael Gerber. A definite must-read for any entrepreneur. I’ve read it and highly recommend it! Now, back to April…)
Set Aside Time for Marketing
“If you don’t set aside time for marketing your business, you’ll soon find that you have too much time for marketing your business.” – business adage
Simply put, if you’re too busy with client work to market your design business, when you finish you’ll have no work at all. Especially in the design world where clients aren’t required to need design work (unlike a CPA firm – everyone has to file a tax return), you should spend at least 30% of your time marketing your business. In a 40-hour week, that means 12 hours, or 1.5 working days, devoted to marketing. It seems like a lot, doesn’t it?
My Approach to Finding New Business
- I read LinkedIn, craigslist, and receive weekly emails from Monster and Career-Builder about freelance/contract design jobs. My goal is an average of one response per day – yes, that’s 365 (or 366 in 2012) responses to calls for work per year!
- I spend a good amount of my time networking (via LinkedIn as well as locally) with some of my best potential clients – other designers. As Preston notes in this post, repeat business often comes from in-house teams that need an extra hand or design firms who need to subcontract. (PS – I also count writing for Millo as networking.)
- I’m preparing a brochure/book to send to potential clients after reading this post by Preston.
- I’m also working through the exercise in Preston’s From Passion to Profit on creative ways to find new clients. (I’m planning to share my experience with the Millo community very soon!)
- Periodically, I check in with old clients and ask them how my solution is working for them and to keep me in mind for future needs. I also send them a Christmas card.
- Long-term, I’m developing the Greer Genius brand.
- Last year, I bought Preston’s From Passion to Profit.
- Last week I unveiled my new business name, Greer Genius, on Millo. (A huge thank you to YOU, the Millo community, for your amazing comments and enthusiasm!)
- The next two weeks will be devoted to developing the Greer Genius logo. Stay tuned!
- Following that, the Greer Genius website will be in development! (Domain name purchased this morning!)
Understand the Consequences of Working for Free
When client work gets thin and money gets tight, our panicked bank account sometimes deludes us into thinking that if we can just get our foot in the door with a free project, the client will be a great paying customer for years to come.
I have never heard of or personally experienced this to be true. EVER. If you don’t believe me, read the many discussions on LinkedIn.
What Really Happened to Me
As one of my first projects, I took a job redesigning a website for peanuts with this philosophy, especially since I saw how poor quality their marketing materials were. I got the sob story about how they didn’t have enough money for a marketing budget and would I be willing to trade services. I said yes, naively, and (not wanting to burn bridges) I’ve been distancing myself as gracefully as possible since 2005.
- First it was the website, which I made less than $10/hr redesigning.
- Then they wanted me to join their club so that I could create a club logo pro bono – it’s for the club, not the business, right? And then a “simple website” for the club.
- Then they had a friend with a small business who also doesn’t have money for marketing but could really use my “help.”
- And on and on if I had let it…
Now, I’m not saying pro bono work is a bad thing.
Non-profits or causes you champion make great pro bono or low-rate work. Right now I’m working on a logo for a month-long animal welfare campaign for my local humane society, and I couldn’t be happier that they asked for my services (I also volunteer there on a personal basis).
I hope to get some positive community exposure and it makes me, an animal-lover, feel good.
Learn about Operating a Business
I’ve long since thought that a liberal arts degree ought to require at least a basic business class for non-majors, and that liberal arts colleges should offer an entrepreneurial class/es as well.
Unfortunately, most business classes are for business majors (or are offered only in the graduate program). At any rate, now most of us are out of school. What options do we have?
- Take a continuing education business class. This is especially true if you lack confidence in your accounting/bookkeeping skills.
- Learn from others’ mistakes and advice.
- The Millo archive has tons of great posts on understanding business, and new posts are regularly posted.
- Join groups on LinkedIn devoted to small business development and design businesses.
- Find a mentor with a successful business (they don’t have to be a designer).
- Ask them who they would recommend for advice if they weren’t available any longer.
- Hire a business consultant who is also an accountant, or vice versa.
- Now you have one person familiar with your situation who can offer sound financial & business advice and prepare your taxes.
Luckily for me, my dad was a financial consultant and CPA who owned his own very successful firm, so I have received excellent free personal and business financial advice throughout my life (whether I wanted it or not).
However, my dad passed away unexpectedly in October 2011, so I hired one of his best friends and most trusted business partners as my CPA and adviser.
It’s your turn, Millo readers
Do you have any words of wisdom that have increased your business knowledge? Sources of advice and tips that you look to for guidance? Leave a comment on this post and add to the conversation!
*Author’s Note: I’d like to express my very heartfelt gratitude to Malcolm Smith, owner of Fidelity Business Consulting Services, Inc. and my business consultant/accountant, for his sage advice.
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