Kate Finley and I were having a conversation the other day about owning a business. She asked me if I have any regrets.
I thought for a minute and then told her my biggest regret is not getting more experience before going out on my own…not understanding the business side of the PR business before I ventured out.
Of course, if we know what we’re about to get into when we start businesses, most of us wouldn’t do it. In this case, ignorance is bliss.
I had only eight years of experience when I started Arment Dietrich. I thought I was pretty hot stuff. The two agencies I worked for didn’t lead me to believe anything differently.
But I really had no idea what I was doing. I was very good at my tactical job, but I didn’t yet understand strategy and I certainly had no idea about the business side of things.
The most I’d ever done is budget and forecast for clients. I’d never done it for a business…not even for a profit center.
I’d led teams, but I wasn’t in charge of their destiny.
I did invoicing, but I wasn’t the final say in what time we wrote off and what time we billed. In fact, when I joined my second agency, writing off time was so ingrained in my character from the previous agency, I’m pretty sure I nearly sent the CEO to an early grave when I liberally didn’t charge clients for time worked on their businesses.
Some of those things I would have learned with more experience in an established company that had the resources to allow me to grow. But there are other things you can’t learn until you have some years under your belt. I wish I’d known that when I was the ripe old age of 30.
Regrets of Lack of Experience
If you’re thinking about starting your own business before you have nearly 20 years of experience, following are some things to consider.
- People. It’s highly likely you’ll manage people before you have even five years of experience. That’s not the issue. What you want to gain experience in is not just managing people and providing their annual reviews, but in becoming a coach and a mentor. I think about people management like I do a football coach. Your job is to not only hire the right people, but to make sure you’re using their strengths in the right positions. Being able to do this only comes with experience. If you can get it on the job, do it.
- Finances. Many of you, particularly on the agency side, have to forecast and budget for your clients and turn those into your profit center leaders. Find ways to get yourself ingrained in the finances of the agency or the corporation for which you work. Sometimes it’s buddying up to the CFO and asking lots of questions. Other times it’s telling the partner you’d love the opportunity to watch them work, particularly during annual budgeting time (which is right now!).
- Business development. If you’re on the agency side, many of you will have already participated in new business meetings. On the corporate side, you probably sit in sales meetings. This is a great first step. But, until you bring in a piece of business all on your own, you don’t understand how to sell. If you own a business, you have to know how to sell or you don’t survive. Network, speak at conferences, go to industry events, find ways to meet new people. And don’t be shy about learning about their organizations so you can find a fit. It’s not always fun, but it’s a necessary evil.
- Resources. When I worked for the ad agency in Chicago, we built a PR department of 20 people and $6 million in billings in two years. It was easy to do because we had the resources we needed to get it done. When you start your own business, you have no money, no software, no expense accounts, no corporate credit cards, no creative department to make your materials gorgeous. You have just you and a small team (or sometimes not even the team) and you have to figure out how to compete with the organizations that have the resources you do not.
- Cash flow. You will hear over and over again that cash is king. I cannot stress this enough. If you don’t have cash in your business to cover at least three months’ worth of expenses (including payroll), you are doomed. Ideally you’d have six months’ worth. Make that a goal.
- Strategic relationships. When you run a business, your job becomes more about the strategic relationships and the people you hire than anything else. You no longer do what you set out to do (in my case, communications). You have to find the right accountant, the right attorney, the right banker, the right insurance broker. Those relationships must be nurtured, carefully cultivated, and grown each year. It takes a long time to find the right partners. Take the time to do it right.
- Benefits. When I started my business, I thought I had to offer the same benefits I had at the large agencies. WRONG! Offering that level of benefits to employees was great for them, but terrible for the business. Learn what you have to have, what is nice to have, and what you can grow in to. There is almost nothing worse than taking away benefits you’ve already offered to stay in business.
My only regret is not getting eight more years of experience before starting my own business. If I had waited to start until now, the things I could have learned on the job would be insurmountable in our success.
Sure, we’ve done it, but I’ve learned on the job, which has sometimes been painful for me, for my team, and for our clients.
There is nothing that replaces experience. Not a degree. Not reading books. Not an advisory board. Nothing.