March 29, 2018, by The Ingenuity Lab
Lessons I’ve learnt in 5 years of running a business
Aaron Dicks is Managing Director at Impression, a high-growth digital marketing agency with offices in Nottingham and London. He is currently an Entrepreneur in Residence at the University of Nottingham Business School and is alumni of the University of Leeds Business School. Read more: https://www.impression.co.uk
However prepared you think you are to start a business, there’s always more to learn. I started Impression with my co-founder, Tom, back in 2012. I wasn’t long out of university, and though I’d studied management as part of my degree, I still hadn’t experienced anything like excitement and stress of actually running my own business.
Impression was just me and Tom for a couple of years, but in 2014 we hired our first full-time employee and things really took off. Now, in 2018, we have over 30 full-time staff and are taking in more and more interns on top of that number. Throughout these 5 years of building Impression from the ground up, I’ve learnt a lot. Tom and I have done a lot of things well, but there are also many lessons that, if we’d just learned them earlier, would have made our lives easier. The rest of this article contains a few of those lessons that I consider to be the most impactful.
For smaller SMEs starting out, and for students at University I hope some of the following advice will save some time, energy or money in those important early days.
Planning your spending – CapEx vs OpEx
Managing cash flow is one of the most important things to get a handle on in the early stages of running your own business. Deciding how to spend your money is crucial, but it all depends on your business model and where that money is coming from.
CapEx (capital expenses) and OpEx (operating expenses) describe the two main types business expenses. CapEx refers to large up-front costs towards the purchase of assets like property and hardware. OpEx, on the other hand, refers to ongoing costs that could fall into a variety of categories.
We made the decision early on to focus our major expenses into OpEx than CapEx. This suited our monthly retainer business model and meant that we didn’t need to spend large sums of money in one go. Software as a service (SaaS) helps us to achieve this; we pay monthly for most of our software that’s now a core part of our daily processes (i.e. Google suite and our marketing data suppliers).
If you’re starting a business with little or no capital, you’ll likely find it easier to spend money on operational expenses, as you’ll be paying out as money comes in. On the other hand, if you’re starting your business with a lot of cash from investment or loans, you may be in a position to spend money on capital expenses up front and make a comparative saving. There’s no single right way to operate, so making the right call for your business as early as possible is crucial.
Bolster your skills with a good business education
It’s also essential to identify and work on your weaknesses early on. I’ve taken part in a couple of business education programs in recent years, but have only recently started to recognise what an important role they can play in the development of new leaders and entrepreneurs.
Not long after starting Impression, I took part in a Growth 100 course in Nottingham. More recently, I also completed an intensive course run by Goldman Sachs: 10,000 Small Businesses (10KSB). One of the key takeaways from the courses were the emphasis on good financial management, which at the time encouraged me to implement better financial forecasting and tighter accounting processes. This also ties into the cash flow management I mentioned previously.
I took different lessons from the 10KSB course than I took from Growth 100. I’d already been running Impression for a number of years when the course began, so the benefits for me lay in learning how to step back and let other team members take greater responsibility for important business decisions.
However much experience you currently have, you should take the opportunity to participate in business education. There are all kinds of courses out there, and the chance to meet and learn from other people in the same boat as you is too valuable to pass up.
Use partnerships to punch above your weight
As a young business, it’s tricky to attract the kinds of clients, customers and exposure that larger businesses enjoy. We discovered early on that strategic partnerships were the way to give ourselves a leg up. For us, it made sense to partner with some design agencies that we were aware of. These agencies were more established, offered services that complemented Impression’s, and worked with the kinds of businesses that we wanted to work with. We were able to make use of the client relationships they already had to work with businesses that wouldn’t have considered us otherwise.
If you can punch above your weight like this, it allows you to build your portfolio and bring in great case studies before you could attract that sort of work through conventional means. As we found, the more you become known for working with bigger clients, the more other companies of that size will consider your services.
If you’re not running a B2B model, this strategy might not work for you. However, it’s worth keeping your eyes and ears open at networking events and when on business courses in case something crops up that you can take advantage of. If you do operate in the B2B space, it’s very likely that some kind of partnership or service swap arrangement could be beneficial to you, and I would strongly recommend exploring this space further.
Recruit well for the future
Hiring decisions are some of the hardest choices that you’ll have to make as a business owner. You’ll invariably make mistakes along the way, but there are a few things that I’ve found make it easier to ensure that those crucial first hires are right.
It’s essential that you get your business’ name out there and known in the run up to recruitment. We quickly realised that there were plenty of ways to meet other people who were active in Nottingham’s tech scene through regular meetups, and also used tools like Twitter and LinkedIn to connect with a wider network.
We also learned early on to look at students and graduates as well as people with industry experience. One of our first employees was Liam Wade, who was a music student at the University of Nottingham at the time. Now we’re a few years down the line and he’s heading up our PPC team and speaking at international conferences!
We avoided working with recruiters early on, as we were coming across enough potential employees ourselves and didn’t want to spend the extra money, but we’ve learned not to ignore good working relationships as they crop up. There are some great recruiters out there, and we now share an office with one: Distinct Recruitment!
Invest early in inbound marketing
As the director of a marketing agency, I can’t help but mention marketing at least once! Investing time into good inbound marketing is crucial as you look to get your businesses name out there and start attracting clients and customers.
I’m talking specifically about inbound, which is marketing aimed at people who find your services themselves (as opposed to adverts which they might see at any time). The heart of a good inbound strategy is content that adds value to the people who read it. Show off your expertise and give away knowledge for free to convince people that you are trustworthy and professional. Social media can help you to spread your message, but be aware that it’s very difficult to reach large numbers of people with organic (unpaid) social media posting. Inbound marketing also helps with recruitment, as it’s a chance to show potential employees who you are and what your business values are.