Three years, three business lessons

1st November 2016 | Posted in Careers Advice, Resources

In October 2013 I made a fairly bold move. Despite having only just turned 21, I quit my part time job in a retail store and decided to take my video production business full time. I’d been freelancing regularly since I left university that May and decided it was time to give it my all — with my income (and thus the rented roof over my head) on the line if it didn’t pan out. I didn’t have any savings, a nest egg from a wealthy family member or a fallback should it go wrong – well, no fallback other than to put my tail between my legs and try to get my old job back. It was a big risk but thankfully it paid off. I’m very lucky – it doesn’t go so well for a lot of startup businesses.

Over the course of the past three years I’ve had some amazing experiences. My business has regularly taken me up and down the country, and in some cases around the world too, and -most importantly- I’ve had the pleasure of working with so many great people at their fantastic companies respectively. Many of these experiences have been simply unforgettable and I’m proud to have been a part of those stories, no matter how small my contributions may be in the scheme of things.

However, despite my business’ successes, the wins haven’t come easily. Since starting my business I’ve learnt so much – I really can’t emphasise just how much. Sometimes I find myself learning new things the easy way, but often times I’ve found myself learning the hard way, as is usually the case when you make a mistake. Fortunately, none of the mistakes I’ve made have killed my business (yet!), but I’m certain a few of them must have come close. This is the problem with entrepreneurship; you’re in a constant state of flux, unsure of what the next threat or problem will be. At times it can be an incredibly draining challenge, but equally the ride can be so thrilling that you just can’t keep still in your chair. (Or get to sleep at night, as is more often the case!)

So, with that said, here are three of the key lessons I’ve learnt over the past three years of running my own business with just my gut and no real business experience behind me.

Get everything in writing

I can’t stress this point enough. Get as much as you can down in writing – if there’s ever a dispute you’ll be thankful you did. On a small scale, for me, this is as simple as making sure that any quotes for jobs are sent out via email as a follow up to anything that’s been discussed in person or over the phone. If a client decides they don’t want to pay you, or if they’re asking for just a bit too much, having an email somewhere in your archive that clearly outlines what you agreed is a lifesaver. I still have situations to this day where I wish I’d followed my own advice here, but equally I’ve been in situations where having a written record has been the difference between getting paid at the end of a job or not. Sadly, there are people out there who will take advantage if they can…

On a larger scale – the more serious side of things – such as going into business with someone else, you should always, always, always have some kind of agreement in writing. I won’t go into specific details, but three years ago I made a deal that involved ownership of my business. At the time it seemed like a no-brainer to me. Although I hadn’t known him for very long, I felt like I got on well with the person I was making the deal with and it seemed like he was pretty amiable and understanding about what we were getting ourselves into.

Later down the line it turned out that we didn’t see eye to eye at all. Looking back on it, the red flags were very clear from the start, but I was so blinded by the carrot being dangled in front of me that I didn’t ask enough of the right questions. A year into the agreement it became time to start actioning the terms and, oh boy, did it become clear what the other guy wanted. (Money, and lots of it.) In hindsight I felt like I’d been preyed on from the start and taken for a fool.

Without a written agreement at all I would still be tied up in this mess. Although the contract wasn’t very well written, thanks to a termination clause of sorts in the contract it’s pretty much history now. Although I don’t regret the deal I made, it was definitely a very lucky escape and could have gone much, much worse had we not written an agreement of some kind to rely on when things started to go wrong. (Bonus tip: always assume it will go wrong.) The lesson here for me was fortunately “be smarter next time and have your contract written by a professional”. I’ve heard similar stories where there was no agreement at all and the consequences were not so good.

Hire from within your network

Not even a year into running my business I got to the stage where I felt like I needed some help with my workload. Instead of looking for help from the people closest to me, such as my friends who had recently finished studying with me at university, I decided to post a public job listing and explicitly told my friends not to apply. “It will be weird being your boss”, I said at the time. Instead, I hired someone I had no previous relationship with at all. We did interviews, trial days, the lot. It was very formal.

At first it seemed exciting to have an employee and to be a ‘proper’ business at last, but as time passed it became increasingly unpleasant for us both. I had no real experience managing people at the time and the burden of managing a stranger soon took its toll. I didn’t know how to cope and often found myself working from home to avoid going into the office because I didn’t want the responsibility of being this person’s boss. I was trying so hard to put on a front and be Super Boss – fearless, brave, authoritative – that I closed the real me off from them completely. As we were the only two people in the company at the time this was the worst thing I could have done. I felt like I couldn’t be myself with them and as a result there was no communication between us at all. It also didn’t help that I had severely underestimated how much additional work there was to do, so when I was in the office I only really had enough work available to keep myself occupied. I was busy, they were not, and we had no communication. As a result the company culture became stifling. I had to let them go.

Since then I’ve realised that this was a terrible approach. Not only because of the way I handled things once I brought this person into my business, but mostly due to the way I went about finding help in the first place. Until your business is more established it’s hard to really know what the company culture will be. What type of leader are you? You won’t know the answer until you’ve tried to lead somebody.

My first mistake was eschewing the help of the people closest to me. Had I employed my close friend who was not only a great camera operator but also looking for work at the time, maybe things would have gone differently. He would certainly have been more understanding with me as I took my weak-legged baby steps toward growing a team. Our existing relationship would have carried us through the difficult patches and the uncomfortable moments of uncertainty, as I saw firsthand after hiring my longtime business mentor, Paul, into Southpoint Films almost two years ago. Unfortunately you don’t get that luxury with somebody you don’t already know – not unless you make the effort to get to know them, which takes time and care.

Don’t compare your business to other businesses

I meet many small business owners who place too much weight on what other businesses are doing. They look at a business completely unlike their own and compare notes. “How soon did they reach a certain turnover? When did the founder go full time? How many employees do they have?” If you’re one of these people, you should stop worrying about other businesses’ milestones. They are often completely meaningless to everybody outside of those businesses.

Turnover is a figure I regularly see thrown around like it means something. I get that it’s an accomplishment – it felt great when Southpoint Films passed £100,000 this year – but it means nothing. It’s a vanity metric. A Ferrari dealership turns over more money by selling one car than we make by doing a buttload of work over a 12 month period, but I’m guessing their overheads are probably a bit higher than ours. If your business is turning over £50,000 a year with no outgoings at all, you’re doing much better than my business which did double that this year and has lots of overheads and costs as a result. Equally, reaching £35,000 and £70,000 turnover during our first two years respectively felt no easier than what we’re doing now. It’s all relative.

Employee count is often used as a measurement of success in the same way and is part of the reason I found myself in the situation I described earlier on this post – I thought I needed help but deep down I wanted that feeling of accomplishment that comes with having employees and a ‘bigger’ business. The trouble is, nobody on the outside saw that I sacrificed my own pay cheque to have that person on the team with me, even though having an employee looked good to those who saw I was hiring somebody else. (This is why many businesses, including many of our competitors, will list every single freelancer they’ve ever worked with on their ‘About us’ page. It looks somewhat impressive to have a big team, but it’s smoke and mirrors that will be easily seen through when somebody on the outside looks a bit closer. Honesty is the best policy.)

Whether your business is one year old or one hundred years old, it doesn’t matter. It doesn’t matter if you’ve turned over £50,000 or 50p. And it certainly doesn’t matter how old you were when you reached that milestone. Are you satisfied with what you’re doing? If the answer is yes then you deserve to be happy. If the answer is no then you need to look at why and work to address those issues – but comparing yourself to others and setting unachievable goals as a result isn’t going to help. Enjoy the ride and everything that comes with it.

Southpoint Films is now three years old* and today marks the anniversary of the day I formally went for it as my full time job. I’ve learnt so much about business; so much so that I can’t even begin to summarise it all. Fortunately we’re now at a stage where we can really start harnessing what we’ve been learning to focus on steadily growing our offerings to better serve our customers all over the country (and the world.) I have a feeling that the next three years are going to be awesome. We’re always looking for new business and love meeting prospective clients to discuss how we can use video to their benefit. Please don’t hesitate to get in touch if you think we could help you!

*By contrast, my new business Vimsy (equally, it doesn’t matter how many businesses you run – another vanity metric in the entrepreneurial world) turns one this year. It turned over approximlatey £0 and has no employees. It has some interesting times ahead too…

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