Before you quit your steady job to work for yourself, try freelancing in your spare time, get a business plan together and be prepared to do some not so fun work like taxes and accounting, that was some of the advice given out by four small WNY business owners at the “Big Advice from Small Business Owners” February AdLab Event.
A four-person panel discussed the pros and cons of small business ownership and shared their secrets for success on Tuesday, February 28 at Templeton Landing, part of the monthly AdLab talks held on the last Tuesday of each month.
The panel included Brian Grunert of White Bicycle, Matt and Laura Duquette of 12 Grain Studio, Marilyn Roach of Block Club Creative and John Howell of nxtARROW Business Development. All business, with the exception of nxtARROW, are all in the creative/design field. NxtARROW describes itself as “a private, self-sustaining economic development company” geared towards bring companies to the Buffalo area and helping new business set up shop.
When you decide to go into business for yourself, it’s important to know what your goal is said Marilyn Roach of Block Club Creative.
“Without a real solid plan, you can end up in trouble, “said Roach. “Planning is really, really important. ”
“One of things you have to think about is your form of business– are you going to be a sole proprietor or are you going to bring a partner in? Are you going to be an LLC? Are you going to be a corporation? There are benefits to all of that, but there are costs related to that (as well). “
“You also need to define your service; you need to know what you want to be and what you’re willing to be. What would you like to progress into and what will you not be? You need to evaluate your market. Do an evaluation of the competition and do an evaluation of the customers in your market.”
“You want to think about pricing, how are you going to scale yourself are you going to bill by the hour, bill by the project. The financial projection is really critical. You should know your cash flow; you should know your direct costs, your indirect costs and you should have an idea of how many clients do I need to have per month to cover my bills?”
Brian Grunert of White Bicycle said the size of the Buffalo market sometimes dictates the type of work he and other design firms are willing to do.
“There’s not the luxury in Buffalo to be a specialist – we’re just a TV/commercial shop, or we’re just an identity shop; even an advertising agency in Buffalo pretty much does everything,” said Grunert. “So I don’t think a small business is really exempt from that.”
Grunert said he had to learn about running a business in addition to keeping pace with his work, especially after he started working with another person. Grunert hired an accountant and had to decide if he wanted his partner to be an employee or not.
“A bad reason to start a creative business is to get out of the oppressive way of doing time sheets and minding the cash flow of the agency you work for. I realized that I was really just putting all of that (work) on myself. “
John Howell of nxtARROW Business Development said that doing it all yourself, especially work that you may not be good at, can sometimes backfire and detract from the long-term success of your business. Instead he advises that business owners figure out what they can delegate and outsource to other people or businesses, for example, outsource employee payroll and accounting to a payroll business.
“Don’t do what you really don’t want to do; you need to do what you really like to do–what you do best,“ said Howell. “You need to spend all your time doing that. Your business can’t really afford for you not to spend all your time being doing that. You can always hire people to do the things you don’t want to do and in the long run it costs you less than if you try to do it yourself.”
However the catch-22 is that most people have no money when they start their own business so they end up doing everything themselves leading to burn out. Having a business place helps to remind you of your goals and keep you organized.
“It really helps (you) to step back, put processes in place, delegate where you can, put things off if you have to and get back to working on the business and not just working in the business, “ said Roach.
As for social media, Matt Duquette of 12 Grain Studio and Grunert said social media plays no role in their business, but for Howell, he says the role it plays in his is huge.
“For me personally, I think it’s all just a complete waste of time, “said Duquette. “You’re spending an hour – three hours a week writing a story that maybe 10 people may read. We follow people (on twitter) and they’re spending 10 minutes of every hour (tweeting) that’s 10 minutes of every hour they’re wasting.”
Matt Duquette said he is not against social media, but added that he has never gotten a job through twitter or any other form of social media. Laura Duquette said her company has gotten better results by reaching out directly to potential clients through a personalized e-mail and added that one problem with social media is that its format is “too brief.”
“Large companies use it because they can reach huge audiences, but for small businesses, I feel that it is a waste of time, “said Matt Duquette.
However Howell said that if you are trying to get business outside of Buffalo, then you definitely need social media which can bring you in direct contact with celebrities with a large number of followers and high-powered CEOs.
“If you are trying to meet people that you do not already know, then social media provides a tremendous opportunity,” said Howell.