I’ve recently stepped down from my role running a UX consultancy for 12 years. I started the business with a co-founder where we sold all our assets, including our cars, cleared our debts and started from our bedrooms. We grew our company into a highly credible consultancy working in long-term partnerships with top-tier clients, including Financial Times, Siemens, Open University, and Burberry.
As I ponder what my next chapter looks like I’ve been reflecting on the last 12 years and the lessons I’ve learned. I share these with you in the hope that you will take them on and avoid some of the mistakes I made.
1. It isn’t easy, prepare yourself
If you’re just starting, please don’t let this put you off, but running a business is hard. Forget all the overnight successes you see (very very few are like that).
Sure you have to work hard and sometimes lengthy hours, but that’s not always necessary. What you may find hard is never being able to switch off from it. The constant pressure to sell more, learn more, do more, be better, pay wages, keep clients happy, keep staff happy, hire the right team. There’s an endless stream of pressure that can be hard on your mental health.
Unless you’ve been there and done it, other people have no idea what it’s like. Running a business can be a lonely place, especially if you’re doing it on your own.
2. Get a reality check on how you will get customers
A widespread mistake I see people making, and one we made in the early days too, was overconfidence in getting our service to market. You have to be super clear on how you are going to get leads and then how you will convert them in your pipeline. Plan for a small conversion % and then work from there as your projections.
3 critical questions you need to be honest with yourself about are:
- What do my target customers already do to solve the problem that I solve?
- Why would they switch to my solution?
- How will they know about my solution?
If you don’t know the answer or find yourself making some assumptions, I urge you to get out there and find out. Do your research, ask around. Read about Jobs to be Done and get your head around what business you are really in, and what job you are doing in the minds of your customers.
3. Profit is everything
It took me too long to learn how important it was to keep an eye on the money. When you start doing well, and things settle down after those rocky first few years, it’s too easy to get comfortable and take your eye off the money trail. You start saying yes to more costs, and you can go months and months leaking money out of the business. Then one day it can hit you like a slap around the face. “Look at all the money we’re paying out each month. Our overheads are massive, and now we need X to survive each month.”
Take a careful look at the money at least once a week. Get familiar with the ongoing costs creeping out the door each month. Keep asking if you need to pay for something.
I’m not saying you need to be tight and say no to a new coffee machine, or to tell your team there’s no Christmas party this year (I have done that once when I really couldn’t spend any more money). I was a pretty generous boss, and I wouldn’t want to change that because positive staff sentiment is critical.
There are always those costs that you agree to, but in the back of your mind, you know you don’t need. It’s those you need to look out for and check in with your gut before committing.
4. You’ll need mentors and advisors, but go careful
Over 12 years, I’ve spent way more than I should have on external advisors, coaches, and consultants. They were excellent and no doubt they helped us through some tricky times and gave us a valuable perspective. But, you can become dependent on them and they can become stale. Don’t get tied into long term engagements; keep things fresh with new advisors from time to time.
When you do engage with an advisor, don’t just take their word as gospel. Listen, consider, let it sink in, but then question what you feel is right. I’ve had some fantastic advice in the past, but I haven’t always followed it. Sometimes it didn’t feel right for us in terms of our values, and sometimes I could see the logic in the approach, but it just didn’t feel right for the business.
Ultimately you know your business, and you know what you believe is right. You should never do something that doesn’t sit right with you, even if it risks ending your relationship with that advisor.
5. Think about an exit plan and set up a shareholders agreement ASAP
If you are starting a business with co-founders, be clear at the outset how you might go your separate ways. You might all be best buds right now, and you might never see yourself leaving the business, but trust me when I say that you can never say never. If you’re in it for the long haul, running a business will fundamentally change you as a person. Who you are now, and who your co-founders are will change.
As the business changes and grows, so will your relationship with it. Where you see it going now might not be where it ends up, and the team you hire, or your role can change to a point where you just don’t love it as much as you did. Once you lose your passion, it can eat away at you and end up making you feel trapped.
Agree on something now, get legal advice, and draw up an agreement that you all feel happy with. Then file it away and know that if it ever turns to shit, you have a plan of action and a way to exit, or to buy someone else out.
6. A change of office can be massive for your mindset
In 12 years of running my business, we changed office four times. Each time we moved, we had a massive change in mindset. Could be a coincidence, but my gut says that there’s more to it than that.
A new office is a fresh new start and an injection of energy and pride. It also represents a commitment to a new future, a financial commitment, but also a psychological commitment to a new phase for the business.
So my advice is only to move when it’s a step forward, a definite improvement. I’ve never gone back or had to downsize, but I imagine that the opposite will happen. The negative mindset will kick in.
Don’t underestimate the absolute ball-ache it is to move either. My advice, get yourself a project manager or some other super organised person who’s done it before and hire them to organise everything for you. Everything from looking for a new space to kitting it out and arranging utilities can take such a lot of precious time away from your day job. Don’t be tempted to scrimp, and don’t underestimate the amount of time commitment it needs.
7. Bigger isn’t better. Be careful what you wish for
The bigger your business is in terms of staff and turnover does wonders for your ego. But most of the time, it will destroy your profit margin and can bring so much headache in terms of staff management.
In our early years, I longed for a bigger team and a bigger office. I wanted to run a ‘proper’ business. When I finally got that, I’m not sure I wanted it anymore. Our profits were lower than ever, and managing a team took me away from the work I enjoyed. Added to that, maintaining our overhead every month gave me sleepless nights.
In hindsight, a small profitable team of around six people are the ideal. You control the culture, you maintain a family feel, and you can be profitable and afford to pay everyone what they are worth.
8. Your reputation is everything. Stay humble and don’t be a dick
When you’re the boss, you pay the wages, and you hire and fire people. It’s easy for that power to go to your head and the next thing people know you’re strutting about acting like Billy Big Balls. The thing is, people do business with people they like, and your team put in a lot more effort when they feel their boss listens and respects them.
Stay humble and remember that you’re only as good as your team. You’re not doing it all on your own, and there are no superstar bosses out there.
The other thing I notice is many people use the excuse ‘it’s just business’ to act like a heartless prick with no morals. Don’t be that person. Treat people with respect, don’t break someone’s trust, and be someone people can rely on and respect. You never know when you or your business might just need a bit of goodwill.
I know this first hand. I never thought I’d be stepping down from my role running the business. But here I am, at the mercy of my network. Thankfully I have only very few people who are not happy with me (I think!). And when I’m starting afresh, people want me to be successful in what I do next. It would be easy for that to be the opposite and no-one return my calls.
9. Comparison is the thief of Joy
It’s so easy to look at another business and see the success they are having as a personal slight. There are many ‘successful’ business around. But the more you compare your business to theirs, the more unhappy you will feel. The fact is, every business is different. You have no idea what investment was provided, what kind of network the owners have, what support and backing they have, or anything about them. All you see is the stuff above the surface.
Sometimes it’s the businesses that seem to be doing so well, who are the ones fighting for their lives every day. It’s impossible to know what their overheads, profits, or circumstances are.
My advice would be to define what success means to you and focus on that. That way, you can celebrate other people’s achievements instead of feeling hurt by them.
10. Learn to model yourself and your process
Many people have difficulty delegating and letting go off tasks. It can be time-consuming, and it can be challenging to let go of what you think is the right way of doing something. But if you don’t learn to delegate successfully, you’ll forever be working IN your business, and never working ON your business.
Learn to model your thoughts and actions when you do a task. Ask yourself these questions next time you work on a critical task that you would like to delegate in the future:
- What did you do in preparation?
- What are the critical steps in the process?
- What decisions are you making?
- What do you do that ensures a quality end product?
- What mistakes do others make that you avoid?
Taking some time to set up processes for others to follow is invaluable. Not only does it allow you to delegate and refine the process, but also you are creating incredible value in your business. If you ever come to sell, your proven methods will be desirable to a potential buyer.
11. Set up a way for potential customers to ‘dip their toe’
If you are selling products or services that are not considered low cost and low risk in the customer’s mind, you will need to allow people to try before they buy. If you’ve got a potential customer who likes what you offer but doesn’t feel comfortable committing, you’ll need to offer them a way to move to the next level of engagement, without big investment.
If you think of a 5 step process with step one is a free and easy commitment, step two requires slightly more investment, all the way up to step five, which is full commitment. How can you arrange your products and services accordingly? Sketch something out and give it a try. It’s amazingly effective.
12. Consider alternatives to the traditional employee model
One thing you will quickly learn is that recruiting talent is incredibly difficult, especially when you are a micro business. Attracting and retaining a team of committed and capable people is tough. Even when you have the right person with the right skills, you have to make sure they have the right attitude and cultural fit. Don’t be tempted to take the wrong person just because you need help. It can be hugely costly in time and morale to bring the wrong type of person into your team.
Assume you’ll have problems recruiting and see how you might be able to re-organise your planned structure around remote workers. There are some fantastic people in this country and abroad who simply can’t be in your office every day. If you can find a way to embrace remote workers, you can build a highly experienced, highly motivated team.
If I start another business, I plan to use a remote working model.
If any of these points resonate with you and you’d like someone to chat to, let me know, I’d be happy to meet for a coffee and expand more on some of my key learning points.