Five Lessons for Your Second Year in Business
Year one is often a complete blur for agencies – you spend so long creating a strategy and making sure you ‘survive’ that you don’t have time to make sure you’re sticking to the plan or consider what comes next.
This month, we at social media agency Hydrogen celebrate turning two, and in the past year we’ve tripled turnover, increased staff numbers from three to nine, and won clients such as Subway and Crimestoppers. I’ve taken a look back at the past 12 months and what lessons can be learned from our success.
Think big, but plan for the worst
I’ve always been cautious with the future forecast. It’s never loaded with new biz and there’s no magical amount that is required at the tail end of the year.
That said, I’ve probably been a little too cautious. I sat down with Daniel (Hydrogen’s co-owner and strategy director) and we put down a stretch target for the year. The trick for me is to do eventuality planning should things come in, consider that there’s new biz that you are likely to win that you know nothing about at this stage and then budget for a scenario where none of that comes in. That way you hopefully never find yourself in a position where you’ve overstepped your finances.
The team are everything
I can’t overstate this. If it was down to me alone I would have put myself into a mental institute by now. I rely on them heavily to deliver every day for our clients and I think that we reward them for doing so.
I believe that pay aside, it’s the environment that keeps people coming back day-in-day-out. The key for me here is to reward where you can, allow them the freedom to deliver their work without your ever-watching eye and give them a sociable environment to come to every day.
Take calculated risks
Whether it’s making that hire or moving office, somethings can’t wait until the money has landed before they are actioned. I heard the phrase recently that ‘you should always run the business a man light’ as that will keep the staff on their toes and keep your margins good. Total bullshit if you ask me, why would I want an overstretched team and a business that might snap when we land that next lucrative contract…
If you have money in the bank, and it’s not going to put you under to do so, I’d recommend that you take calculated risks from time to time. I’ve been in previous organisations where the project has landed before the recruitment drive begins, the result is the current team are overstretched and end up working late, the work doesn’t get off the right foot and it’s a really unproductive situation for everybody. We’ve taken this step a couple of times in the past year and it’s worked for us each time.
Never let your heart get in the way
I’m still learning this one, the issue is that it’s cost us dearly a couple of times. When client ‘personal’ issues start to come into the conversation that affect the ability for invoices to be paid, be cautious.
On two separate occasions in our first two years this has happened to us and it’s cost us in the region of £30k. I’d urge anybody caught in these situations to move the liability from you to them, get them to seek other funding routes that move the risk, don’t act as their short-term bank. If they can’t move that liability, withdraw your services immediately.
Take some time out
The crazy thing about running your own business is that fact that you never stop. I’m not talking 14 hour days in the office (I normally leave on time to spend some time with my boy before he goes to bed) but rather the mental side of it. You think about business in the shower, in the car on the way to work, while you’re eating dinner, even at gigs. It never stops…
For your own sanity then, I would say that you need to take time out of the office. It doesn’t need to be two weeks in the Bahamas (although that would be nice), even a long weekend can help restart your brain.
Good luck and enjoy your second year!
Mike Scott is MD of social media agency Hydrogen