At the tender age of 20 I started my digital agency Optix Solutions. 18 years on we are still going and employ almost 20 staff. Here are 5 useful tips if you're thinking of starting your own business.
At 38 and as a relative old timer of the industry, I thought it would be useful to tell my story. Hopefully I can inspire the next generation because although the internet might have changed dramatically in the time I've been going, good old common sense business fundamentals haven't.
When I started my agency back in 1999 Google and Ebay were both in a garage somewhere. Many companies didn't have websites so my job was to persuade them this Internet thing was worth investing in! 18 years on and its a little different! In that time we went through the dot com bubble bursting, the birth of ecommerce, web 2.0 and of course social media changing the face of our industry.
Our own startup story
I've sat down this morning and thought carefully about the key reasons we were able to grow and succeed whilst many didn't. We weathered one of the worst recessions the country has ever seen, we've had clients go bust on us and we've suffered at the hands of poor decisions and issues beyond our control. We kept going though and I'm keen to share a few reasons with you today.
To give you a little context, Optix was started by three friends who met at University back in 1997. In our second year of Uni we created the Limited business and thought it would be a good idea to run it alongside our studies. We spent the first year getting by, doing sites for friends and family for a few hundred pounds. When we graduated, we had the decision of whether to go and get jobs, or just go for it. Many told us we were mad and should go down the conventional route of getting jobs, but we had other plans. We were very lucky that a few kind family members lent us £8000 and about enough to keep going without any sales for 6 months (the three of us were practically living on bread and water!). Fast forward 18 years and we're a team of almost 20 with clients all over the world. We've grown into one of the most successful agencies in the Southwest and have just started a new base in Bristol alongside our hometown HQ in Exeter.
So what are my tips to budding entrepreneurs looking to start their own thing? Here are the five that I'd stand by and would give back to the 20 year old me.
5 useful tips about running and growing an agency
1. Being obsessed by cashflow
My father drummed this into me from day one. Profit is all well and good but there are many profitable businesses that have gone under due to poor cash management. From the early days I lived my online existence in two places, a spreadsheet which we used for cashflow forecasting (you can download my template for personal use) and our bank account (I'm afraid I can't give you access to that). I became obsessed with money and to be quite honest I've stayed that way since the beginning. One important tip is to squirrel money away whenever you can so that you have a rainy day fund. I'd suggest at least two months of all costs but more is probably favourable. One tip I stuck solidly to in the early days was that every time I got a cheque in (yes it happened back then) I put the VAT into a separate account so it didn't come as a nasty surprise each quarter when the HMRC came knocking.
2. Aim for recurring revenue
Our real breakthrough was the introduction of recurring services. For us this included hosting charges in the early days and moved on to digital marketing services. This makes up over half our business now. It does two things for you. When its built up enough it allows you to pay for the overheads of the business before you start making money on new projects and possibly more importantly its means you're not having to constantly find new business (or at less of a rate anyway). Knowing that each month on the first day that a certain amount of money would roll in was a constant relief to us and allowed us to grow the business over time.
3. Never be too big to take advice
It amazes me how many people think they know it all in business. Its usually those who come unstuck. Over the years my business partner James and I have had many advisors. We've invested large sums of money in these external parties, knowing that they often bring a different point of view or skill set to our business. As I write this today we have three external advisors and I don't see that changing as the years roll on. Try to find a mentor that fits with you and your business. Ensure they are strong enough to stand up to you and challenge your ideas while having enough empathy for your position that they understand they are only there to guide you. Advisors are also often a good source of leads too (see my next point).
4. Sales is where it starts
Now don't get me wrong, having an amazing product is just as if not more important if you're to keep going but you can't argue with the fact that if you don't make sales you've got no work. Thats just a fact unless you're giving it away for free and that probably won't last you long. Now this is a subject I could go on and on about but here are a few key takeaways for you. Positioning yourself as an expert is the best long term way to build sales. By getting to be known as the person to turn to, inbound leads will flood in. This takes years though so you better get going now. Short term, doing smaller pieces of work to prove yourself is key. Try to understand the challenges of others rather than selling your wares. Don't be one of those people who just talks about themselves all night at the local networking event. Invest your time in asking about other peoples business challenges and it will pay off, I promise. With the social media tools you have available to you now there is very little need to cold call or knock on doors. The likes of LinkedIn and other networks make it very easy to get through the door, around the gatekeeper and sitting in front of the CEO having a coffee before you know it. Remember that someone famous I can't remember the name of said, 'your network is your net worth'. Don't sell yourself short. Price too cheap and its a race to the bottom and you don't want to be in that game. It only ends badly. Read How to Win Friends and Influence people and check out any books by Jeffrey Gitomer and you can't go wrong.
5. Employing people is going to be the hardest thing you'll ever do.
After all, when you created your business I doubt you did it to put food on other peoples tables right? You did it because you're passionate about something, because you're good at it. Quickly you find yourself unable to do some of the things you set out doing because you're managing other people. This is why finding the right people for your business is so critical. One bad egg and I cannot tell you the affect it can have on a whole business. Believe me I've been there a few times. My advice? Take your time recruiting, don't rush to replace people when they leave. If people really want a role, they often show you just how much and are willing to work for it. They are the guys you want. If you want to build your agency then you're going to have to employ people. Just ensure you're spending the right time and paying the right amount to get the best candidates.
I hope you've found those tips useful. They come from 18 years on the front line so even if I can reach out to one person thinking about starting their own thing and make a difference to their journey I'll be happy. If you'd like to chat more about this topic then please reach out to me on social media. You'll find me most places 🙂