Some people probably think we must be mad. Two weeks ago, I launched a new brand consultancy – Brand Pie – in collaboration with Roger Partington (formerly with Safeway and TXU) and Peter Widdup (previously with Sampson Tyrrell and Enterprise IG). We took over Peter’s existing design consultancy (Watershed) as part of the process, and while it is still very early days, it is very much a case of ‘so far, so good’. We are up and running.
When you tell people you are launching a new business in the middle of the worst economic climate in living memory, you get one of two reactions.
The most common is a facial expression where, if there was a neon sign on their forehead, it would flash the words ‘Are you mad?’, and they then splutter ‘Really? I thought you had a good job at WPP’.
The other reaction, which, understandably, is much rarer, is ‘Great idea. This is the best time to do it’. This sort of response tends to come from experienced business leaders.
I naturally subscribe to the latter school of thought. Recession provides a platform for change. The opportunities it gives should be neither feared nor wasted.
I was one of the founders of Enterprise IG (now The Brand Union) back in 1992. We launched the consultancy off the back of the early 1990s recession. On day one, we were just two businesses with an idea – one in London (Sampson Tyrrell) and one in New York (Anspach Grossman Portugal). By 2000, with the support of WPP, we had turned that idea into reality and built a global network – through acquisition and organic growth – with 23 offices in 21 countries, employing more than 650 people.
Along the way, we won global projects for BP, Castrol, Ford, Deloitte, Lockheed Martin, Standard Chartered and Volkswagen, to name but a few. It was great fun.
Over the past couple of months, we at Brand Pie have been going through everything you need to do to set up and launch a new company – from defining and testing the idea, finding clients and offices, creating a name, identity and website, through to building accounting systems, drawing up articles and shareholder agreements, registering for VAT and much, much more.
So when Design Week asked if I would be willing to provide a basic list of dos and don’ts to anyone else thinking of doing something equally mad, I jumped at the chance.
First, the dos:
• Make sure you have the full support of your friends and family. It will be tough at times, and if you do hit a bumpy period, at least those you love and respect will have known this could happen from the outset, and will help and encourage you.
• Talk the idea through with lots of different people. This will help you get your business model clear.
• Talk to the bank at the earliest opportunity. It won’t give you much credit (none, actually), but it will help you to be realistic about your goals.
• If you are going into partnership with someone else, make sure you share the same vision, and draw up clear articles of association with an agreed structure of ownership. This can avoid painful problems if your partner falls ill, or you fall out with each other. You will need a good solicitor to do this for you. To save on legal costs, write down all the principles you want included and your agreed ownership structure before the first meeting. Agree a fixed budget and keep it as simple as possible in the first instance.
• Have a clear plan to launch the company, get revenue (be realistic) and do the work.
• Get out there and meet people. These businesses are mathematical – the more people you talk to, the more opportunities you will create. The average time between a first conversation and a new client invoice is between nine and 12 months.
• Talk or reply to everyone who calls or e-mails you, as you never know where they will be in five years’ time. Young people, particularly, remember those who listen and help them. I was always surprised (and gratified) by how many prospective clients came in to Enterprise IG simply because I had given the person some time or replied to a letter when they were starting out on their career.
• Get your pricing right. You cannot be too expensive – or too cheap.
• Build up a cash fund to help you through lean periods.
• Deliver fantastic work. Your clients are, by miles, your best source of future revenue and new prospects.
And now, the don’ts:
• Borrow money.
• Spend money before your clients have paid you.
• Think any job is beneath you.
• Believe your own rhetoric.
I hope this simple list of dos and don’ts helps those of you who are thinking of taking the plunge to move one step closer, or to realise starting a business isn’t for you.
If you do decide to take the leap and start your own venture – good luck. I am reasonably confident that those people who think I may be mad today won’t be thinking the same in five years’ time.
I hope the same is true for some of you.
Dave Allen is co-founder of brand consultancy Brand Pie