As my first business I don’t confess to be an expert. If you speak with any proclaimed business gurus who don’t tell you about any of their mistakes, they are either hiding them or haven’t actually been in business themselves outside of employment and should be treated with caution. I wanted to write this article about my experiences, as after writing a few “how to” type posts I thought people might want to hear about my experiences, and the advice that I’ve taken on board from either books or other people. Here’s a few things I learnt in my first year which are not unique but worked for my type of business. If your new to my blog, the first thing you should know is the lack of posts are mainly due to taking action instead of self promotion I come from a sales background of working with technology companies and have been in digital marketing for the past 3 years. I run an search marketing company who provide advanced SEO packages to get your website further up Google and Bing. The businesses we deal with really do vary in size, however we do well with companies who have a similar mindset to us in that they sell a product or package which brings me on to my first point.
Sell a product not a solution/consultancy
After reading a book called “built to sell” I learnt this pretty quickly that there is a fine line between pleasing a client and working for the same hourly wage as a cleaner (not that there’s anything wrong with that, I just tried it and wasn’t very good at it!). By selling a product I don’t mean it has to be a physical product such as a car or mp3 player I mean package what you sell so that what you SELL the client is exactly what they get not any extras which should be chargable, if you do still want to offer extras then offer them as bolt ons as this is clearly definable that the client knows x product costs x amount. Do not and I repeat do not work for free to keep/please a client, as if they’re going to leave you after supplying them with a package that suits their requirements they may leave anyway regardless of how much extra effort you put in for free to keep their business. This is more so important that if one client is critical to the businesses success then you may have a business that has too much risk at stake, this is one of the core principles the book communicates.
Specialise! you’re not a one stop shop
When I first started my company one of the first thing I did was get a website up. I based what I could offer loosely on not only what I was good at, but also as I had worked in different areas of online marketing agencies I too wanted to offer everything. What I later realised is its not just what you CAN offer and what there is money in. You might have had conversations with people and they say things like “thats booming at the moment, there’s money in that”. The problem with this approach is you’re never truely going to be able to speak with authority on each of those topics and many clients realise that you will be partnering with other specialist companies. I personally found that when I specialised, I had a more targeted pitch based on knowledge and experience, and our customers would talk to other clients about us they would mention “speak to these guys they’re good at SEO”.
If you’re trying to evaluate what service you should offer and which market segment you should target I would start by asking two questions 1) Is there a big enough market i.e in my case yes the search market is competitive 2) Can I improve or compete with my competitors? Again my answer was yes we could compete by offering a better results and a more organised and responsive service. If like me you do NEED to partner, then partner with a business that you see as not competing and are complementary to your service that can refer you new leads. As an example we currently partner with a web design partner who is a specialist in creating designs for ecommerce websites that convert clicks in to sales and give a good user experience.
80/20 principle for your personal development education time
Lets face it you can’t be an expert in everything, however you can aim to understand it enough to either explain it or be able to help someone out to a certain degree. I spend roughly 10-20% of my time practicing and reading about my industry and what is happening, I also equate some of that time to being around industry people through networking and socializing. I see this as a long term investment of both relationships with new people who could ultimately shape each others future & also knowledge and expertise doesn’t happen overnight. This is purely a choice of where you want to spend your time, however in an industry as fast moving as online marketing it helps to know what changes will affect your business and be able to challenge the people who you’re delegating to take care of this area.
Bill up front
After speaking with two entrepreneurs and good friends of many years, the only client they came across that wanted longer payment terms was the company who didn’t end up paying them.I appreciate that when you take on a bigger client they might have a policy of 90 day payment terms, in which case instead of seeing the £ or $ signs you need to factor whether the extra work load would kill the business if they didn’t pay you which could happen. The way to ask for payment up front is going back to the first point, position your offering as a product and people expect to pay for a sofa, tv etc before they receive it. It can be a tough call between a client starting work and the cheque clearing in your account, but remember you’re not a bank. If their finance department is being slow on the payment then you need to help them chase that up, but be clear about start dates only happening once payment has cleared.
Use the phone to meet people
The phone is your best friend but meeting people is much better for your business (although can be more expensive if you don’t have a budget for traveling). You can contact anyone anywhere in the world from your phone, the only person holiding you back from contacting them is your inner voice. The one thing that is better than the phone is either an introduction, so the person on the other end will listen to what you’ve got to say as oppose to slamming the phone down! I could do a whole blog post alone on this, but having relationships is not only important for your business by getting referred to new customers (see next point) but it also important for your psychological health. There’s research that concludes that people who are more social are happier in their lives, have better relationships with their loved ones and close friends, so next time you get an invite from a new contact and think you’re too busy, think about what that opportunity could lead to. People in more technical and non client facing roles will often make excuses about why they don’t need to speak with new people as they may have a tight existing network. These people especially should be developing new contacts, as even our Head Technical guy has a great network through forums, skype and events he attends.
Partners are your best way of getting ahead
The term partner is pretty wooly these days, it can mean anything from someone you refer work to, to someone who owns half your business. By partners I actually mean the first definition, if you can get to know people that can mutually help each other then this is a great way of growing your business. Think about it I could contact 40 people and maybe two people might be interested or I could contact one person who knows those 40 people and get them to recommend or introduce me. To make this more specific to my business, I have clients in both europe and the U.S, for me to leverage international relationships it makes sense for me to meet with partners in the U.S who can help resell our service known as white label SEO.
Your profit isn’t whats coming in to your account!
Factoring in taxes isn’t the easiest thing in the first year when you’re not sure how much you’ve made and how much after costs you have as profit. I would advise asking around friends for a DECENT accountant. I say decent as there are tons of them out there, some of which charge a fortune and some of which aren’t very good. If you have a relationship with someone through a friend they’re much more likely to do you a good deal too!
Events aren’t always the best place to meet clients (unless you’re exhibiting or speaking)
I quickly learnt that being at an event unless its for your own development and catching up with industry contacts isn’t the best place for business development. If you’re exhibiting or speaking you have a natural kudos that you’re a company thats successful and that you can afford a stand there. As this blog post is primarily aimed at startups I’m assuming you’re on a budget, but I do appreciate that some companies will have VC backing and an instant marketing budget to play with. If you do go to an event try and save money by getting the greyhound where you can catchup on emails or use a similar bus service with wifi, you haven’t made it yet!
Finally what shouldn’t you do
Don’t borrow a ton of money – I know it sounds obvious, but I’ve heard of people who have borrowed thousands on their credit cards to become pay per click affiliates just because its something they enjoy without any reserves. Starting a business, is hard and if you don’t have a way of either living without little money or have 6-8 months reserves outside of the business then this it might not be you.
Think you’re on Dragons Den or the Apprentice - When I first started my business, for whatever reason I did admittedly come up with excuses as to why I should or shouldn’t do certain tasks. Here are a few of them:
• You’re not too good for cold calling, my friend told me once who runs a successful business “if its good enough for Richard Branson its good enough for me”
• Going back to the previous point, you don’t need investment from elsewhere. Living social as an example are recruiting 6 new people a day, they’re not an established business but their rapid growth means they are generating revenue and in my opinion are NOT a startup!
• Don’t hire staff, every time you ask do I need staff, ask yourself have I measured the time I spent effectively and if you haven’t then make amends to do so in the future.
Think I’ll do it one day when I get more experience - In my experience you may get more experience if someone leaves your company, but this is a long process and often the best time to do it is either if you get a break such as redundancy or you’re young and want to give it a shot before you have lots of responsibilities. Self talk around “I don’t know enough” or “i’ll do it one day” are not the kind of people who start businesses, because frankly most people like the idea of it, but then again most people aren’t mad enough to do it as it me Again I must stress that I am not saying you can’t or wont start a business when you’re old as I totally don’t believe that, I am just saying that this article was written about me experiences and not about people who have either lots of experience or reserve money.
I would welcome anyone to comment below on my experiences and I would love to hear what others who have tried the first year have experienced.