The first months of our new web business are crucial and in the end the hardest ones. We have all the paperwork prepared, we have the right to sign the papers, we are now our own boss and the world is our oyster. The moment we have the small web firm up we feel the need to conquer the world. Yes, been there, done that (not conquering the world though, we have some more work to do)
You found out you have your own firm now, try to get from the hangover (I assume you celebrated) and prepare yourself for the life you’ll have as an entrepreneur. Your next steps are important: the way you know how to handle the budget will also result in your early bankruptcy or maybe having a profit from the first day.
Maybe my example won’t be the best one, but I hope some of the things I can present here might help you too. No, I am not rich from my web business, but I was on the “positives” from month 1. Here is how I did it all:
1. Don’t start spending like crazy just to show off.
I know that being your own firm’s owner is a great feeling. God, I have it each day when I know I am my own boss and all I do and own is MINE. It’s awesome! Still, try to not show off by spending money on all kinds of stupid things. Most of the time you don’t have that money (I saved some money to be able to start my firm, there were some taxes involved). The good thing is that I didn’t have to loan money for this, I just saved some for 3-4 months and was able to cover the expenses. And then, with the small money left, I was very “cheap”.
The only thing I did to celebrate my new status was getting my best friends to a drink and the lawyer who made it all possible. We drank a cappuccino and they wished me the best. That was all. No expensive restaurants, no huge dinner parties, no showing off.
2. Have small advertising expenses.
No, you are not Coca Cola to spend millions of dollars in advertising. You have a small firm and maybe 2-3 clients. It’s OK, since you can’t handle way too many, so you don’t need to spend too much on advertising. The first thing I did was create my unique logo and prepare some business cards.
This is my logo .. the kanji (Japanese writing) mean do-jo and the firm’s name is Dojo Design. My slogan is “dare to be different” (since you know I have a thing about being original and unique .. or at least trying to do so).
I spent some good hours to make the logo vectorial (so that I can use it on anything, not just the web) and preparing my business card. My first expense was to have the cards printed. I made 50 copies, not too many since I wasn’t that sure if I do “spend” them all on clients or prospective clients.
Even if the business cards didn’t cost too much, I didn’t want to spend too much on the quantity. I did use a good printing firm so that they do look professional.
And that’s it. No newspaper ads, no radio campaigns, no adwords advertising to show the world I am here. I already had some prospective clients and my portfolio was looking good enough to draw attention. This is why one should start a web business when one has something to show already, not just promises.
3. I don’t need a fancy office, I don’t need 20 employees.
Most small business owners I know want to be God in the first weeks. This means spending on a new car, on a fancy office and hiring people so that they have who to play God with. No, most of the time, a small web design firm DOES NOT NEED all these expenses.
I recall my folks laughing themselves senseless when I started my firm, saying that “OK, she’s got a firm in her room”. Yes, it’s true. My firm means: me and my laptop plus an internet connection. I can do business from my room, I can do business staying in the park (as long as I have a wireless internet connection, but I am limited by the laptop’s battery), I can do business from Cannes or London if I will. This is the great thing about working on the internet.
And as you can guess, I still don’t have that fancy office. Because I don’t need it. Most of the time my work is from my home or from my BF’s home when I am at his. I meet with my clients for a drink in the city and then I can get my laptop whenever we want to meet again. Most of the time we don’t even need to meet again, we can work online. I have clients from the USA or other cities in my country too, as long as paypal or my bank account are working nicely and they can see the results online, why spend hundreds of euros on an office if I don’t need it.
The firm I once worked at still has an office. Even if they don’t secure that much work the expenses are still 2000 euros/month. And this each month, even if they don’t even make 100 a month. My expenses: 100 USD/hosting, 20-30 for domain renewals and I think this kinda covers it. I am the one to work, so this also means less expenses.
Hiring staff is a good idea once you don’t cope with the workload anymore. Just having people in the firm to make you feel good, is a huge mistake. I never understood people who start a business in a niche they know nothing about. I have a design firm because I am a designer. I can do my own work and in the future, when I do hire, I’ll be able to know what this job is like and what to expect from my employee.
Until you know you can secure some constant flow of projects, don’t hire. I have 1 year as a firm owner and I still work on my own. There are already many clients and I am thinking about hiring, but I still need few more months to see if this is a long term situation or just a “spike”.
Fancy cars? Yes, I might think about this after 1 year of running my firm. Not from day one though since most of the time we don’t need a firm car that bad. Most people (unlike me) have a car already. It’s perfect for your start. You don’t have to go out of a Mercedes just to have your clients fall on their backs in awe. Just use a decent car or take a cab for the “trips” you have to make in the city.
And don’t spend like crazy the money you have to make.
3. Try to see each month how your expenses might be kept under a good control.
The day you start the firm, you also need to spend money: taxes, small advertising, maybe employees and an office when you just cannot run it without it. We all have our accountants to care for these calculations, but it’s also a good idea to kwno on your own how well your business is growing.
As I mentioned before, since I have very small expenses and tried to keep myself from over spending, I was able to be on a small profit from the first month. This profit is increasing month by month and I am able now to think about more expenses. Just try to keep in mind that some of the things we might think we need are not necessary in the end. It’s not that I advise anyone to walk in rugs and be cheap, it’s just that each expense needs to be needed, not made just so that we can feel “cool”.
Running your own web business is a hard work and it takes time and some money too. The good thing about it though it’s the fact you can start VERY SMALL and grow at your own pace. You don’t have to look rich, you don’t have to spend a lot of money, you can do great with very small expenses and a lot of work. In the end my web design clients come for my skills and you, my dear readers come from my content. The QUALITY of my work is what gets me clients, not my fancy car or Armani suit.
So, what have we learnt today?
- a web business doesn’t need all the expenses of a “normal” business. We don’t have stocks, we don’t need a huge office. We can work from any place, as long as we have a good computer (in my case a laptop, helps with the mobility), an internet connection and our mind ready. In the end “Dojo Design IS ME”, just change “dojo design” with your firm’s name.
- advertising costs need to be small, at least at the beginning. Don’t overspend, try to secure some clients, not show off.
- you don’t need many of the things you think you need. Doesn’t matter your neighbor’s firm has 20 employess, try to see WHAT YOU NEED
- keep track of your profit and the expenses and spend as much as YOU NEED
- don’t be a cheap unkempt person, but don’t spend like a millionaire, we know you are not
- the quality of your work is what matters, not your new Jeep.
- enjoy even these low earning first months, seeing your small firm grow is an awesome feeling.