The Mistakes I Have Made Running a Design Agency
And how you can avoid them too
This is the tale of a designer. A tale that has been told a thousand times. The tale of a young designer armed with energy, enthusiasm and a healthy dose of naïvety.
Our hero woke one day, uncharacteristically early, at 4am. Lying on his back, starring out into the dawn sky through a Velux window he wondered, ‘is this is it? I have hit the proverbial glass ceiling and there is nowhere for me to go. It is time for me to strike out my own and forge my own destiny.’
Armed with a three word business plan—‘let’s do this!’—our designer did indeed strike out on his own. After telling everyone he was doing this for himself, soon enough, our designer landed his first fee paying job. The fee barely covered the mortgage, let alone the bills, but that first cheque felt so, so, so good. ‘I did that, and I did it all by myself!’
At first, it was intoxicating. Our designer felt a rush of adrenaline, for he was independent, in control and the master of his own destiny.
Projects of all shapes and sizes came through the door. Soon enough our designer had enough money to rent commercial desk space when the kitchen table just got too small.
Fast forward several years, our designer is now an agency co-founder and co-owner, employs a team, finds himself in a joint leadership role, and has some serious overheads.
That three word business plan, however, just doesn’t cut it any more.
This is where I step in. That, dear designer, was me. I recall staring out that Velux window to this day. That was the moment the proverbial switch flicked in my head.
Mistakes, though; I have made them all. But this dear designer is where I want to prepare you, so you can navigate your way from designer to business owner without the anguish so many of us have gone through before.
Maybe you will make the same mistakes. Maybe you have made them already. Seek solace in this though; we all, by and large, make the same mistakes. We all have similar stories to tell.
This won’t be an exhaustive list, nor the answers to all your problems. What it will be is my list of mistakes. If I can ward you off from just one of my mistakes, that’s a big enough dent in the universe for me (no matter how unambitious that may sound).
Also, know this; overcome one hurdle, and sure enough, others will follow. I certainly don’t have all the answers, but I do know this though. Have a growth mindset, take hold of the reins, feel the fear and do it anyway, and the journey will be just as rewarding as the destination. (Wow! Cliché overload right there!)
In the process of writing this, I have also recalled some of the sources of inspiration that helped guide me. At the very least, you will have a reading list by the end of this article.
So, onwards dear designer; the mistakes to be wary of.
Working in the business, not on the business
I may as well start with the one you have all heard before, but we may as well start strong. This is a mindset shift, and mindset shifts are the hardest to overcome. Mindset shifts may take months, possibly even years, to occur.
Working in the business means you are focused on the day-to-day, delivering projects and managing the workload. Working on the business means you are focused on widening your network, meeting prospects, writing proposals and winning work. See the difference?
If you are mired in the minutiae you will most likely have a very lumpy pipeline of work. We’ve all done it. Lord knows, I have. You win a piece of work, pay all your attention to that piece of work, deliver it and wonder where the next piece of work is coming from when you come out the other side. Sound familiar? (Yup, got those stripes too.)
This is why you hire. Until you let go of the day-to-day, you will not have the time or head space to build your business.
I know you love design (I love it too), but fear not, you don’t have to let it go. You won’t ever stop designing. It will begin to mean different things to you, and how you define design will continue to evolve. This mindset shift is about refocussing your priorities. If you need help, I recommend reading Build your business in 90 minutes a day by Nigel Botteril. (It worked for me!)
In essence, until you work on your business, not in your business, you are victim to what falls through the door. Which brings us neatly to learning how to say ‘no’.
Learning to say ‘no’
The roots of saying ‘yes’ to everything that comes through the door goes back to the day you decided to strike out on your own. You had a scarcity mindset, and you worried about paying the rent. So you always said ‘yes’, no matter how much it bent you out of shape.
Your client didn’t mind though. You were low risk. Your rates were so laughably low, and you were so committed to delivering that you never dared to hold out your hand for more money.
It’s fine to be out of your comfort zone (that is the journey after all), but put your team out of their comfort zone and you will be in a continuous state of learning.
Wait, isn’t that a contradiction? Yes, it is a contradiction, and… err… also no. Let me explain by rewinding a little, back to the basics.
This took me a while to appreciate, but your business has a cost base. (Red flag if you don’t know what this is. Find out.) In order for you to make a margin you will need to perfect and hone your processes. Because once your team are a well oiled machine, they will make that margin. Keep throwing new challenges and new processes at them without budgeting for research and development, and you will lose money every time.
Perhaps, more importantly, saying ‘no’ allows you to say ‘yes’ to the opportunities that are a good fit. In essence, play to your strengths – your expertise.
I could write an entire book on why positioning and expertise is important, but there are far more qualified people out there, such as David C. Baker and Blair Enns, that have done a better job than ever I could.
However, that said, it all starts with saying ‘no’ and understanding the reasons why you should.
Ignore that advice and you will end up with a portfolio that is everything to everyone and really hard to sell. (Yup. Tick, tick and tick!)
Expecting different results by doing the same thing, over and over
Spot the contradiction? This article seems to be full of them, doesn’t it?
This pitfall was exposed to me by the mantra, if you can’t measure it you can’t manage it. And that dear designer, is at the heart of Eli Altman’s book Run Studio Run. (Read it, and thank me later.)
By scrutinising each step of the design process, you can begin to see what activity is profitable and, more importantly, what isn’t. The mistake is to expect different outcomes when one is continuously losing you money.
Have the conversation with your team and remove it. It is madness to think there will be a different outcome by doing the same thing over and over.
Before you think, dear designer, that this writer is just obsessed with money; think again. Be real. You need to keep the lights on and provide the means to put a roof over the heads of your staff, and of course, you and your family. (This is even worse if you are British. Heaven forfend you are in it for the money!)
Being confident around the subject of money
And, while we are on the subject of money, being confident around the subject of it will help you lay the foundations for a successful project. Money sets one of the key constraints of a project; the budget.
Find out what the budget is straight away. Bake it into your first contact question set. Believe me, it will save you wasting countless hours on a prospect that simply cannot afford you. (Been there, done that.)
Don’t worry. You won’t look mercenary. Anyone who runs a business gets it. You have overheads too. If they aren’t willing to invest in design and don’t take it seriously, walk away, or talk to someone further up the chain of command.
If you need further substance, read Mike Monteiro’s Design Is A Job.
Anyway, back to money. Knowing your cost base, and therefore margin, arms you with the information to enter into negotiations. All conversations around money are a negotiation and you need to know the point at which the project is no good for you.
The even bigger game changer is when you price the client, not the job. That’s not a mistake though—that’s an opportunity—so let’s not get sidetracked.
This all seems so obvious, and your friends who work in financial services will laugh, but we went to university to learn about design. Who knew we would be running a business one day?
Learning how to lead
Leading is another outcome or by-product of a growing design business. Again, it seems so obvious, but this is a role that you suddenly find yourself in. You are the North Star of your business and people will look to you for guidance and answers. For some, you may be seen as a safety net, for others you will be their mentor, but for others (hard truth) you are simply the boss and a pain in the ass. In fact, you are all of those, simultaneously.
Here is another hard truth. You cannot, and will not, be best friends with your employees. You will look after them like they are family, and you have a collective responsibility to look out for each other, but like it or not, until your employees leave there is a line that isn’t crossed. You may be best friends with your employees, but I bet you find it hard to have difficult conversations when someone isn’t performing well.
The truth is, not all of us are natural born leaders and sometimes the pressure to make decisions and lead is immense. Being a leader will put you out of your comfort zone. It did for me.
The best advice I can give you, is to learn to be a leader. How, is up to you. Read a book. Go on a course. You know what works best for you. Just don’t ignore it.
Not everyone thinks like you
As your role as a business owner and designer evolves, so too will the tools needed to navigate the path to growth.
If you asked me, right now, what the key to my personal and professional development is, I would say ‘being a better human being.’ As trite as that sounds, once you work on the business, not in the business, your day will be spent building relationships both inside and outside the business. What you and I might otherwise call ‘managing people.’
As a business owner you will need to learn many new ‘soft’ skills. How to give and receive feedback. How to have difficult conversations. How to coach your staff. And, some times, how to motivate your staff or mediate conflicts within your team.
The biggest mistake I made was that I assumed that everyone thought like me, and, next big mistake, was as invested in the business as me. (Pity the fool that I was.) People are, of course, different and shouldn’t be as invested in the business as you. Why should they be?
For me, the key to understanding others is understanding yourself first. There are two books that helped me on that journey: The Four Tendencies by Gretchen Rubin and Quiet by Susan Cain. Those two books helped me understand why I behave in a certain way.
For the record, I am an ‘upholder’ and an ‘introvert’. Any business coach would take one look at that profile and laugh. ‘What you; a leader‽’
Now I have a better understanding of myself, I am at peace with my strengths, and weaknesses, and actually believe some of them are superpowers. Introverts don’t talk, they listen, intently. (Yup, superpower right there.)
I am no psychologist — I’m a designer, remember? — but self-awareness is the key to understanding others. It will help you frame conversations in a certain way to help gain mutual understanding much quicker.
Putting yourself in the shoes of others is a designer’s trait through and through, so I know you can ace this.
Don’t be afraid to ask for help
Who’d have thought that being a designer and, more importantly, a business owner had so many hurdles to overcome? Be reassured, you won’t have all the answers. Sometimes, you won’t know what to do next. It may all feel like a puzzle. Admit it yourself, and then admit it to others, but don’t be afraid to ask for help.
Seeking counsel in others is one of the most clarifying and game changing pieces of advice I can give you. Some of you will hire non-executive directors, others will have mentors in their life, or some of you will simply land on the right book at the right time.
Me? I had a Bear (more on that later), a mid-life crisis, a compulsive reading habit and a thirst to learn.
For a long time I blamed everyone else but myself. It’s a hard pill to swallow, but if your business, or life, isn’t going the way you want it to, you are in part, or wholly, to blame. (Oofff!)
Yes, there are always external factors, but if you aren’t doing the work you want to do, or aren’t being remunerated enough for the exceptional work you do, then, I am sorry, you are to blame. You have to roll up your sleeves, accept culpability, stop making mistakes and change. (Remember when I wrote about having a growth mindset? This helps. A lot.)
Like me, you are probably a designer, you never ran a business before, and frankly, you probably think all that business stuff is just boring. Yes, running a business is a lonely place, and yes, some of it is boring. But, here’s the thing: as there is no one else to turn to, this is why seeking counsel from others is so crucial.
Back to Bear.
Bear is a man, not a wood dwelling animal (although he can be found in the woods now and again if the conditions are right—namely sunny and with a picnic). Bear is also a friend and confidante.
To put it bluntly, Bear saved me. Through conversations, often over a glass of wine, I learned that he too once ran a business. A software business, in fact. Like my design business, his software business had a consultation ‘room’ and a production ‘room’. Sound familiar?
In essence, he ran a service based business, much like yours and mine. As service based businesses we don’t sell ‘things’. We sell ‘outcomes, change or transformation’. (Yeah, hard selling that, isn’t it?)
We would sit and talk for hours. He would talk about his experiences and the processes he baked into his business, and ask me questions about mine (or more often than not, expose my lack of processes). Every time we spoke, a light bulb would go off in my head.
You could call Bear a mentor, and if you don’t have a Bear in your life, find a Bear. This person needs to be someone who has been there and done that. He or she will understand the common pain points of growing a small business. They won’t do the work for you. You have to do that yourself. Be a good pupil, listen to what they say, do your homework and chances are the lightbulbs will be popping off left, right and centre.
This process of gaining clarity helped me gain confidence. Now, if I don’t know how to do something, rather than see it as a dead end, or ‘not for me’, I now see it as an opportunity to grow and find out more. If I can’t get help from books or podcasts, then I know to reach out to others for help, paid or otherwise.
That, dear designer, has been my greatest aid, and it may well be yours.
I now know that the three word business plan just doesn’t cut it any more and that all businesses can move on to a path of predictable and sustainable growth. Who knows, maybe in another ten years, I will be writing about the sale of my business. But, rather than just wondering how and when it’s going to happen I know it has to be planned and executed. I know the journey ahead will have its ups and downs, and there will be days when I wonder if it is all worth it (I am human after all).
However, this time round, I see the road ahead, as an opportunity to learn. And for me, that is exciting.
This tweet from Blair Enns, perfectly sums up this transition for me.
“In the first decade or so of your career as an independent creative you will be fascinated and fulfilled by the many and varied challenges of your clients’ businesses. Success will arrive however when you begin to find greater fascination in the challenges of your own business.”
And that dear designer, is the story of the mistakes I have made and where I am on this journey. There will be countless others, I am sure, but if I can ward you off just one of my mistakes, my work here is done.