Breaking out from being a 'one-man-band'...
Discussion
Having one of those 'bottle of Rioja meets long term planning' evenings, and have managed to worry myself into a crisis of confidence.
I've been in business for nearly 5 years now. Business is profitable but insecure as no matter how much time, effor and commitment I put in, I seem to end up with all my eggs in one basket.
This year I have put in a huge effort to spread the income between a number of clients rather than relying on one big client and enough other bits and pieces to satisfy the tax man. However, having achieved this by the end of the summer, I have since ended up back in the familiar scenario again. I'd like to expand and take on staff to enable me to hunt for more clients, but because of the uncertain nature of my business I have to rely on freelancers to do short contracts, which means I make relatively little money on those jobs.
So, what I'm asking really is can anybody advise how I can break out of this catch 22 situation? Have any of you done it and what risks/challenges did you face.
And ofcourse, if any of you are looking for a complete CAD/Project Management support team on a five year contract - email me!!!
I've been in business for nearly 5 years now. Business is profitable but insecure as no matter how much time, effor and commitment I put in, I seem to end up with all my eggs in one basket.
This year I have put in a huge effort to spread the income between a number of clients rather than relying on one big client and enough other bits and pieces to satisfy the tax man. However, having achieved this by the end of the summer, I have since ended up back in the familiar scenario again. I'd like to expand and take on staff to enable me to hunt for more clients, but because of the uncertain nature of my business I have to rely on freelancers to do short contracts, which means I make relatively little money on those jobs.
So, what I'm asking really is can anybody advise how I can break out of this catch 22 situation? Have any of you done it and what risks/challenges did you face.
And ofcourse, if any of you are looking for a complete CAD/Project Management support team on a five year contract - email me!!!
Partners.
When I founded my business I took the view that it was better to go in with a number of partners.
This has upsides and downsides. Up - partners all work on risk too - no salaries to pay. Downside - come Dividend time you're not the only one.
But it can be a LOT more comfortable working in an environment where if one of you is sick, on vacation etc you have someone as dedicated as you to rely on.
And you can even afford to specialise - I, for example, am focussed on delivering software solutions. Another partner is technological innovation and another is commercial.
When I founded my business I took the view that it was better to go in with a number of partners.
This has upsides and downsides. Up - partners all work on risk too - no salaries to pay. Downside - come Dividend time you're not the only one.
But it can be a LOT more comfortable working in an environment where if one of you is sick, on vacation etc you have someone as dedicated as you to rely on.
And you can even afford to specialise - I, for example, am focussed on delivering software solutions. Another partner is technological innovation and another is commercial.
If going down the "partner" route, be very careful. Business partners should have compatible personalities and share a similar vision for the business.
Proper legal arrangements should also be set up between the partners - a partnership agreement if a straightforward "Partnership" or a "Shareholder'/Directors' Agreement" if the business vehicle is a limited company.
Proper legal arrangements should also be set up between the partners - a partnership agreement if a straightforward "Partnership" or a "Shareholder'/Directors' Agreement" if the business vehicle is a limited company.
Thanks for the replies guys.
It's a limited company. I originally set it up with a flatmate from uni, although the business relationship grew sour due to a number of factors. I ended up buying him out about two years ago. We did manage to stay friends, so not all was lost.
The trouble is, I never intended being a one-man-band outfit in the first place. I'm a bit reluctant to involve a business partner again, although if it was split three ways rather than just two, at least decisions could be made democratically rather than who wins an argument.
I think I'm just lacking the energy to keep working so hard yet still failing to get any stability. Really need to make some positive steps forward next year.
So we have the suggestion of involving a partner or two. Any other suggestions?
Come on the PH collective, this business is my one-shot to make enough money for a decent lifestyle involving fast cars - I know you can all relate to that!
It's a limited company. I originally set it up with a flatmate from uni, although the business relationship grew sour due to a number of factors. I ended up buying him out about two years ago. We did manage to stay friends, so not all was lost.
The trouble is, I never intended being a one-man-band outfit in the first place. I'm a bit reluctant to involve a business partner again, although if it was split three ways rather than just two, at least decisions could be made democratically rather than who wins an argument.
I think I'm just lacking the energy to keep working so hard yet still failing to get any stability. Really need to make some positive steps forward next year.
So we have the suggestion of involving a partner or two. Any other suggestions?
Come on the PH collective, this business is my one-shot to make enough money for a decent lifestyle involving fast cars - I know you can all relate to that!
I suggest you try and go out and get as much business as you can. If possible, employ someone young (who you can also train) to do "office things" (helps give a professional image). At least something can be done while you are out of the office. Don't worry about the lack of profit using freelancers, once you get enough business built up you can employ your first full time, and kick on from there.
Speculate to accumulate is the name of the game.
Speculate to accumulate is the name of the game.
Hi Iain,
Im probably missing the point here but....
To summarise : you dont have time to do both the actual work and manage and develop business relationships. As a result you have a very limited client base and you're constantly concerned about future stability, let alone growth.
If so, er, employ someone! What are your core skills? be totally honest with yourself (rather than deciding what sort of person you wish you were!) If you're great at meeting people, geting them interested, pitching, closing deals etc.. then you should hire someone to do the actual work you're curently doing.. In this instnce you'd need designers/3d graphics experts im assuming, so wouldnt even need to employ them as proper 'salaried employees'. There are tons of superb designers out there, many fresh from uni, who you could use as a freelance development pool, and who cost reltively little. One of the design companies i work with frequently (www.delta32.com) works this way extensively. It gives them all the benefits of being a very small outfit, but the resources of a far larger firm.
On the other hand, if you're really design king man and not the best networker ever (this is where the honesty is important!) then you should recruit a business development manager. Clearly you dont want to spend money on an x-years experience corporate bod, but there are again a lot of people out there who are great at this and can be hired in a variety of ways....some straight from Uni no doubt
i may, as i said, be missing the point (in which case that was a lot of wasted typing!)
but this is a very low risk way of stabaising and extending your business.....
cheers
Night
Im probably missing the point here but....
To summarise : you dont have time to do both the actual work and manage and develop business relationships. As a result you have a very limited client base and you're constantly concerned about future stability, let alone growth.
If so, er, employ someone! What are your core skills? be totally honest with yourself (rather than deciding what sort of person you wish you were!) If you're great at meeting people, geting them interested, pitching, closing deals etc.. then you should hire someone to do the actual work you're curently doing.. In this instnce you'd need designers/3d graphics experts im assuming, so wouldnt even need to employ them as proper 'salaried employees'. There are tons of superb designers out there, many fresh from uni, who you could use as a freelance development pool, and who cost reltively little. One of the design companies i work with frequently (www.delta32.com) works this way extensively. It gives them all the benefits of being a very small outfit, but the resources of a far larger firm.
On the other hand, if you're really design king man and not the best networker ever (this is where the honesty is important!) then you should recruit a business development manager. Clearly you dont want to spend money on an x-years experience corporate bod, but there are again a lot of people out there who are great at this and can be hired in a variety of ways....some straight from Uni no doubt
i may, as i said, be missing the point (in which case that was a lot of wasted typing!)
but this is a very low risk way of stabaising and extending your business.....
cheers
Night
groomi said:
Come on the PH collective, this business is my one-shot to make enough money for a decent lifestyle involving fast cars - I know you can all relate to that!
Well, since you have such a great taste in cars...
Is the nature of you business such that you could employ a trainee?.
Many firm's will deal with the admin side of running a payroll scheme for you.
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