This article is written by Dimitris Kalogeropoulos, jetdrops’ founder.
Running your own business has numerous benefits: You handpick your projects and your clients, you are free to say “No!”, you make a lot more money than being an employee, you have unlimited vacation days.
Or, at least, that’s what I thought in 2014 when I made the huge leap of faith by founding jetdrops. Now, 3 years later, I am writing this post with the 12 findings of my entrepreneurial journey so far.
1. Focus on growth
For the past 3 years, I haven’t cared a bit about jetdrops’ profitability and my personal income. Don’t get me wrong, jetdrops is profitable and I pay my living expenses but I haven’t put my focus on that.
We hired people before we really needed them. We invested on our equipment. We trained our people. We got fancy offices. We worked on many side projects without an actual revenue. We did pro-bono.
All these, helped us to get better and grow our revenue 4x versus the first fiscal year. Now, our projects are getting bigger and bigger but we are well prepared to handle them.
Our fees have increased and our profit margin is much greater than year one. I am confident that upcoming years will make up for the limited profit of the first 3 years.
2. It’s not about profit, it’s about cashflow
However, to keep growing, you have to make sure that your cashflow is rock solid.
At the beginning, you will have to finance one project for your clients but as the time goes by and you grow, you will have to finance two, three or four projects at the same time.
Having a strong cashflow will help you get discounted prices at a lot of third party services. Usually, we get a 10–20% discount just for paying upon delivery and not 2–3–4 months later.
Paying on time (and earlier than that) will keep your employees and vendors extremely happy and motivated with great impact in your projects’ quality.
3. Market your company, not yourself
Your company is connected to you, right? Well, no.
You are running the business daily, you are putting in all the extra hours you can and you will make enormous sacrifices to keep it afloat.
However, if you want to make your business grow and, actually, scale, market your company and not yourself. You, as a resource, are limited. You can work 10–12–16 hours per day but, even that, is finite. Your company can work for 100–200–1000 hours per day.
Promote your people. Celebrate their successes. Showcase the company’s latest projects. Move the spotlight far from you. It’s the wise thing to do.
4. Fire fast but be prepared
Sooner or later, you will have to fire someone and, trust me, it’s going to be ok. Not all people fit all companies.
Probably, after working with a person for 2 or 3 months, you will know if they are a good fit for your company. It is better to fire them fast than wait for them to quit. Waiting will have an impact on your company’s quality of work and, since legacy is your strongest asset, you don’t want to jeopardise it.
Prior to firing someone, make sure that you have already prepared the next state. This can either be by hiring another person or by outsourcing a task or two. Firing someone without having the resources to replace this person, is even worse for your work’s quality.
5. Hire before you have to
Great employees are rare to find. Great employees is impossible to be found under time pressure.
Probably, you don’t currently have the capacity to work with 3–4–5 new clients. Nonetheless, you are already discussing with them. According to Murphy’s Law, they will decide simultaneously to work with you so you have to be prepared. Moreover, you never know when one of your current employees will leave your company.
So, once you find a great fit for your company, hire them with eyes shut.
6. Pay fair
You know beforehand how much money you can make from a specific person with a specific skillset. Based on that, set their salary.
Keep in mind that you don’t want an employee leaving you because they got a slightly better offer. Your indirect, long term cost is much greater than that.
However, having said that: don’t get dragged into bidding wars, especially with more resourceful companies; it will not end well (for you).
7. Don’t trust clients who don’t pay on time
Prior to working with a new client, you will agree on the payment terms.
Having followed this rule from day one, I have noticed that clients who don’t pay as per our agreement, usually are the ones willing to lie about anything: the scope of the project, the final deliverables, their expectations and, of course, your payment terms.
Save yourself from the drama and drop the client once they start falling behind with your payments.
8. Good clients don’t ask for discounts
Discounts are altogether different from negotiations.
Negotiations are challenging, fun and, from time to time, a good puzzle to solve. However, once the negotiation has been completed, both parties know where they stand.
If a client keeps asking for discounts on your agreed fees, they cannot understand the quality of your work and the effort you put in it. They will also ask you to do something for free.
You wouldn’t do discount on your work’s quality, right?
9. Clients go
It doesn’t matter how great your team and your work are. There is always another vendor who is better or cheaper.
Embrace the fact that you will lose some clients. Roger Sterling of Mad Men fame got it:
The day you sign a client is the day you start losing them.
You will always have to be on the look-out for new ideas, new projects and, consequently, new clients. Even if a client doesn’t sign with you immediately, will keep your name on the back of their head and, sooner or later, will come back to you.
10. January and July drive the year
New year’s resolutions are your best friends when it comes to new projects. People on January are more willing to try new things. Definitely, the new, unspoiled budget will be a great ally toο.
Moreover, people are more willing to go shopping on July, just before they leave for their summer vacation. They want to make sure that they will be prepared for the upcoming September and they will try to finalise a thing or two, beforehand.
September, on the other hand, is a very weird month. Everyone will come to you asking for proposals and ideas. If you are lucky, these projects will be on air by December but, most probably, they will start on January 1st. So, be prepared for a huge workload without any, immediate, revenue spike.
11. Be true to your promises
Why did you decide to start your company? What was your driving force? What’s your vision?
The answers to these questions are your company’s DNA. Your DNA shall never be altered, especially for a short-term benefit. Your ethos will be your partner for the years to come and, ultimately, will be your company’s culture.
You don’t want to run a company that changes it’s values based on short-term outcomes. This is a two headed snake that eventually will bite you -and your company- back.
12. Admit your mistakes
I have made plenty of mistakes over the last 3 years. Thanks to them, I am a better professional and employer compared to who I was in 2014.
In order to get better though, you will have to admit you were wrong, understand why you were wrong and what you should have done. It’s not easy and it took me a lot of time to master this skill.
And let’s be honest. I haven’t mastered it yet. I am not even close.
After all, entrepreneurship is a long game where you get better and better as days go by. Enjoy it.
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We are jetdrops, a digital agency specializing in Social Media Analytics. We are only 3 years old but we really love what we do! Reach out to us at info@jetdrops.com.
