10 things I did wrong as a design entrepreneur
I got a lot of mails from many old, new and will-soon-be entrepreneurs asking me to share tips on things that one should not do as an entrepreneur or things that I would have done differently. Now, to think of it, these are two different articles — one, where most entrepreneurs go wrong and two, where I wished I had gone right. So, to keep things simple and as entrepreneurs that’s one of the most important things to do, I’ll make this ‘my wrong doings list’ for now.
Reiterating what I said last time, this list applies itself closely to the advertising, communications and graphic design businesses but barring a few points it is comfortably generic.
1. We ran a business on faith and trust. But contracts do help. Considering that most of the business early on in the entrepreneurship cycle comes from references, it’s very easy to fall into the ‘you-have-my-word’ trap. You’re a young / new entrepreneur, you want an opportunity to prove yourself and you believe that ‘he who got in touch with you is known to him who knows her whom you know for so many years’. So, you’ve done the work and now comes the time for payments and you realise that life is not as good as you expected it to be. Negotiations have started. People are asking for paperwork that you didn’t even know existed, the budgets for your work were not approved internally, or you don’t have a Purchase Order, and worst of all, the person whom you were interacting with has moved on to greener pastures leaving you in the red.
So, the learning is, that always have a contract in place. Even if it’s not on stamp paper, a simple document stating remuneration and scope of work with signatures is a must. And put down a clause that the scope and remuneration will be defined with each project / quarter / year. This may still not ensure that you get your payments but will help make a strong case and get some out. And this brings me to the second point.
2. We didn’t ask for an advance before we advanced. Many new entrepreneurs are in two minds on this. One, they don’t want to lose an opportunity and cheese off the client right in the beginning. Two, they don’t want the client to feel that they’re doing this ‘only for the money’. My experience has been that it all balances out over time. There would be many clients who are not willing to show you the money till you show them some work, and if you refuse, they let you go. And there are many who have no qualms about making advance payments. I’ve seen that over time, if I would have insisted advance payments I would have been richer even if there would have been a huge number of clients whom I would not have worked with.
3. We let clients negotiate for a truck load of potatoes and then buy one kilo at wholesale rates. Yes, there are many! Many who would give you a huge list of things to do over the next six months. You would spend a lot of time working out a bulk rate card for them which is negotiated till every cell in the excel sheet sues you for violence. And finally, when the rate card is ‘approved’, you would get one little leaflet to work on. That’s it! Learn to recognise these kind of clients early on. They are also the ones who tell you that they have crores of business to be picked up and they believe in ‘long term relationships’ but want you to do one small piece for free to prove to them that you are their right choice. Avoid them! Don’t do speculative work.
4. We priced ourselves low. This is a point which if you falter on, its demons will chase you for years. It’s very easy for new entrepreneurs to fall for this. You want a client and the client wants to try you out but only if you give him a better rate than what he is already getting. While your work and service is not a commodity, don’t settle for anything lower than the rest. And even if you do and want to use it as your competitive edge, don’t price yourself so low that it sets a precedent for all future work from the client. Price yourself the same as you would but give the client an ‘introductory discount’. This helps you ensure that you won’t be the lowest priced partner for the client till your centenary celebrations. Realise it for yourself and let them realize it too that you have bills to pay as well.
5. We didn’t take time out! It’s very easy for new entrepreneurs to get stuck in the nine to deadline routine. The expectations of proving to partners, vendors, clients and most importantly to yourself take its toll. Recharge your cells often. Even if just a weekend getaway with the family or a new book every week or just a hobby that you pursue, learn to time out and spend time with yourself.
6. We hired out of desperation. Irrespective of what stage you are in business, it’s very easy to hire people. But it’s very difficult to hire the right people. Sometimes you hire because you need more hands on board but end up compromising on talent. Sometimes you hire ‘talent’ but realise that what you really needed was someone who could get down and dirty and work like a horse. It’s very easy to get affordable help but keep in mind that the people you hire early on will be the foundations of your business. If you don’t hire the right set of people right in the beginning, you are putting more than your sanity at risk.
7. We didn’t get a second-in-command. It’s lonely at the top. And having to take tough stands and make every little decision brings out the ‘man your mother warned you about’ in you. It’s important to have a partner / second-in-command early on. If you can’t find or attract anyone who fits the bill, nurture someone from within the young team. Whoever it is, he / she should not only understand the nuances of work and relationships but should also have a keen mind and good business sense. Someone who can take decisions for you. And more than anything, it helps you shift the blame onto someone.
8. We bit more than we could chew. And that’s bound to happen if you do good work, build relationships and be the go-to-man (or woman) when it comes to getting work done. We did all the above and have been through times when we had more to-do mails in our inboxes than a chronic spammer has in his outbox. And that’s when we hired out of desperation. The best thing to do is to find fellow freelancers or small studios or one-off-job professionals whom you can outsource work to. Build a team of reliable freelancers or independent consultants and get work done. But don’t say NO to any work.
9. We tried too many things. Almost everything. The temptations are endless. If a client is satisfied with what you do, chances are that he may trust you to do more things that are not directly related to your deliverables. And the stakes of such things are high. Not because he doesn’t have anyone else to do it, but because he trusts you immensely. In times like these, it’s easy to believe that you can take on everything and do it yourself or build the expertise to do it in-house. We took what we thought was the road less travelled and that made all the difference. We were lost. At one stage we wanted to become a digital agency, a technology solutions company, an events management company, an artists management cell and lot more. But over time we realised that we can bring the best value to clients and ourselves if we stick to what we are best at. Stick to it. And find partners to do the other things. But don’t try to do everything yourself.
10. We didn’t celebrate our successes. Don’t wait for your first one lakh rupee cheque or your first million dollar project to start celebrating. Every success big or small needs to be celebrated. A happy mail from a client, an advance payment, a new client, losing a client who who was not worth it, even getting a RFQ from a big name… everything is a reason enough to celebrate. Sure, it may not be a champagne every time but ordering in pizza on a buy-one-get-another-at-half-offer works equally fine. It not only gives you a reason to go for bigger challenges but also keeps the small lean and mean team motivated. And above all, it helps you find happiness in small things in life. Which effectively matter the most.