5 lessons learned from my first year in business
Reflections and learnings from year 1
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Last week I shared the numbers from my first full year in business.
Firstly, thank you to everyone who wrote back or responded on the feedback form. Your comments and support mean a lot to me. Just a reminder that you can always reply to this email and that is generally the best way to start a conversation with me!
After having some time to sit with the numbers and reflect on how the past year has gone, today I’m sharing some lessons I’ve learned (and in some cases, re-learned).
Almost all of these lessons I had read in business books or heard on podcasts before. Some I had even experienced in my previous life as a part owner of a design studio.
But things are different when you’re out on your own.
You can imagine how you’d tackle some of these challenges, but it hits different when it’s your own money and livelihood on the line.
It’s also more rewarding and satisfying when you figure out how to successfully navigate these twists and turns on your own.
Let’s jump in.
It’s going to be a roller coaster
One thing that people always told me about running your own business is that the highs are higher and the lows are lower.
I have found this to be true financially, emotionally, and from a workload standpoint.
One day you think you’ve nailed a pitch and you’re high on adrenaline, sure that you’re going to get the project. The next day you’re getting the email that they really liked you, but they’ve gone with someone else.
One week things are going smoothly and you’re making great progress on your client work. The next week you hit a roadblock and have to pivot quickly.
One month you’re fully booked and exceeding your revenue goals. The next month you’re hunting for another job and trying to reduce your expenses.
This is pretty different from my prior experience of being a part owner of a fairly mature design business. In that business, there were still risks and fluctuations, but things had been systemized to a point where they were somewhat stable and predictable.
As an early-stage entrepreneur, there is no predictability. But this is the nature of the game. The high highs and the low lows are what makes entrepreneurship unique and exhilarating.
Over the last year, I’ve slowly learned to ride the roller coaster of being an entrepreneur. I’ve become a lot more familiar and comfortable with the sometimes wildly fluctuating and unpredictable nature of it.
For anyone looking to start their own design business (or any business), just know that this is coming. Your first year is not going to go how you think it’s going to go, and that’s OK.
I think the key is to have optimism and belief in yourself so you can keep going, and try to maintain a long term view. Though some months were a little nerve wracking, when I looked at my numbers over the last year, I felt pretty good about how it went as a whole.
Even though the highs are higher and the lows are lower, when you zoom out far enough it all starts to even out.
Sometimes you need to trust your gut
As a solo business owner, there are a lot of decisions to be made. Some of which can be life or death (or at least they feel that way).
Should you take on another client? Should you hire someone? Should you contract something out? How should you price this job? How do you handle a difficult conversation?
There are also no right answers.
You don’t have a boss or manager to tell you what to do. You don’t have a playbook to work from.
What I’ve learned over the last year is that when you are faced with a hard decision, no amount of advice, books, or podcasts will lead you to the right answer. Sometimes you just need to go with your gut.
I have mostly learned this the hard way. Meaning that I made some decisions that all the data and advice told me were correct, but my gut told me were wrong. These decisions often ended up coming back to bite me in some way.
That’s not to say you shouldn’t do the research, collect data, and get the best advice you possibly can when faced with a tough choice. But if after all that something still doesn’t feel right to you, take the time to listen to your intuition.
Keep on top of the boring stuff
Running your own business and being your own boss can sound sexy, but there are a lot of un-sexy parts of it. Taxes, accounting, invoicing, legal stuff, paperwork of so many different varieties.
The boring stuff.
Staying on top of this boring stuff, but also not letting it eat up all your time is a delicate balance. You have to remember dealing with paperwork doesn’t add any real value to your business or clients. It simply enables you to do so.
Strangely, paperwork can become a form of procrastination if you’re not careful. Though often confusing and frustrating, the boring stuff usually has a right answer that can be found with enough research. And your brain can find that more appealing than the fuzzy, less defined real work of getting and servicing clients. You have to remember this is housekeeping, and not actual value-generating work.
I’ve learned to make sure this stuff is taken care of right and only have to deal with it once. If you don’t tackle some of these things straight away or keep pushing them along until they’re done, they can really ruin your day or month later.
Quite a few times I have gotten help to deal with this stuff when I can see that it’s clearly beyond my expertise or not worth my time doing.
For example, I am not a trained lawyer. Though I have read and negotiated client contracts before, when faced with a particularly gnarly one, I paid an uncomfortable amount of money to a lawyer to help me sort through it quickly and correctly so I could move onto doing the real work.
I’ve also paid for accounting, bookkeeping, and tax preparation. It’s not that I can’t do these things myself if I really tried. It’s just that it would take me away from generating real value and revenue for so long that it would be a net loss for me. I’ll gladly pay for help with the boring stuff.
Money is a tool
I learned a long time ago that you can’t run a business thinking about money like it’s your own. This was a lot easier to do in my last business because I had partners to share the risk and the business was fairly mature so there weren’t a lot of big money decisions left to be made.
This is something I had to re-learn when working on my own business. When you’re starting out with a small amount of your own capital, everything from equipment to software purchases are a significant money decision.
In a way, it is all my own money (I put it into the business) and it can be hard to see that hard-earned cash leaving the account. Every expense can become a paralyzing choice between spending the money or depositing it into your personal bank account at the end of the month.
But when you run a business, you have to think about money as a tool and not as your own paycheck. At its core, money is simply a store of value. One that you get in exchange for the value you provide to clients, and one that you can use to trade for time, expertise, and efficiency.
With that mindset shift, I can much more easily invest in things that will make me more money. You’ll see from my numbers that I pay pretty handsomely for equipment and software because I know those things will enable me to work better, faster, and deliver more value. By doing that, I can then generate a significant return on investment on those expenses.
For example, I’ve paid almost $4,000 over the last year for a SolidWorks license. As a regular person, $4,000 is a rare massive purchase to me, and I did briefly debate switching to a much cheaper CAD package like Fusion 360. But as a business, considering over the course of the last year I used that SolidWorks license to drive over $75K of revenue, it was well worth it and I continue to pay for it without a second thought.
Relationships are everything
Throughout my career, I’ve tried to do the best design work I could and be a good collaborator with my clients. I developed many great working relationships with engineers, managers, marketers, founders, and more.
I didn’t do this because I expected them to return a favor for me someday. I did it because it was my job and it was the best way to do good design in a fun and fulfilling way.
I never thought of myself as a “networker” or someone with a particularly strong professional network. When I started my own business, I was touched and surprised to find that so many people, some who I hadn’t worked with in years, were willing to help me out by giving me recommendations, referring me to potential clients, or wanting to work with me again.
Without these relationships and the help I got, my last year would not have gone nearly as well as it did.
Businesses of all kinds are built on relationships, but this is especially true of a design services business. People will always be more willing to work with someone they know or someone that comes with a personal referral from someone they trust.
I don’t have a playbook or some kind of schmoozy networking technique for you here. Simply do good work and be a good person, and over time you’ll find that you have a wealth of relationships to help you in anything you choose to do in the future.
To everyone who helped me get my business off the ground, thank you.
You know who you are.
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Just the ID Jobs - 16 x Full-Time, 4x Internship
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