Lessons Learned About Starting a Small Business and the Possibilities and Pitfalls You Must Be Prepared For

With the AIGA Small Talk series quickly approaching, I wanted to take some time to reflect upon my journey of how I have gotten to where I am. In doing that, I wrote the story below in hopes that it serves as a background for those who know me and maybe don't know the story and for those who have yet to hear my story. And maybe for those young students, it'll help you determine your path, like many before me helped determine mine.

The Vision

I remember when I first set out to start a creative firm, I was in college and I thought to myself, "Why not, right?" It'd be better to work for myself than for someone else. I had entrepreneurial spirits in my blood, and I wasn't going to fail. And so, those many years ago, I set out to do just that, to "Change the World" so to speak with design, my art school awesomeness, and something that I thought I could do better than others: design and communication.

So I started to build a base of small clients. We're talking mom-and-pop shops, family member businesses, and so on. I was 22. Fresh off back surgery a year before from a train accident here in Chicago and looking to begin a new phase of life.

The Back Story

But let's step back even further, to what started me on the path that would eventually lead me to be writing today. (Yes, this is going to take me all the way back to high school folks). I was 16, living a normal teenage life, and I had friends who were attending The School of the Art Institute of Chicago. They invited me to come out and visit, so I accepted, and when I arrived, I fell in love with the city right away. It was so different and so stimulating, in comparison to where I grew up. It was, for me, the next thing I needed to do.

So I applied, in my junior year in high school, mostly with an all sculpture portfolio. My drawing skills, to say the least, were not on par with even my architect father's hand and eye coordination. My sculpture teacher at the time told me I wouldn't get in. (Yeah talk about support), and I think it was at that moment, I knew I had something special happening. I had luck on my side, yes luck, and a little creative talent. I was ready.

So the Art Institute reviewed my portfolio and asked me to come out for a pre-acceptance interview. I was nervous, but I had guidance, even then, from my friends who were attending, and with their help and a little help from admissions I got in. At that time, 1 out of every 4 people were accepted, so I felt pretty good. I guess they saw something, that even at that point I had not seen. I didn't chalk it up to talent but more to being in the right place at the right time, as I sure was then.

The School of the Art Institute had a 4 year program, and it was there that I began to understand what it was I wanted to do. My 2nd year, I ended up in Visual Communication, with Intro to VisCom, taught by the late John P. He was a critical reason why I chose to stay in VisCom, and why I excelled from there. For me, SAIC was never about the quality of the facilities, the non-grade system or its academics. It was all about the professors and mentors. I was able to finish the program before my senior year, while studying under great designers and typographers of the likes of Stephen Farrell, Ann Tyler, Jennifer Moody and others. My senior year I took all graduate level independent studies (for those of you undergrads, yes you can do this with the dean's permission), and it was my senior year at SAIC that I got my next moment of major clarity... my first client.

The one thing that school never prepares you for is the real-world. You hear this complaint about so many industries, but it is more true for the creative industry than just about any other. Working with my first real client was an eye opening, life changing event, that would determine the next 8 years of my life.

The Real Deal

Upon graduation, I worked with the base of clients I had garnered while I was still in college. For the first six months I worked alone, in the apartment I lived in during my senior year. The projects were small, and I couldn't pay my bills at first, but I kept working on it. Around that six month mark, just before summer of 2003, I teamed up with my schoolmate Meredith Martin, to start Killswitch. She had been interviewing at the time for creative positions but decided she would come aboard to see how things worked out. After all, we had nothing to lose. It was then that Killswitch was really born.

We got our LLC status in early 2004 and set up a bank account with $8000 we had saved from previous client work and savings. We moved from my apartment into hers and set her entire place as our studio. Desks in the living room, conference room in the kitchen, and we had one employee... a programmer.

At that time, we both focused on creative, while I also took on the business side responsibilities. We knew eventually we would have to divide this up even further, but back then we both had the time to wear many, many hats.

We started acquiring new design work, along with some small flash-based websites. We learned our lesson pretty hard in the beginning, as our first major web client wound up declaring bankruptcy, and we were never able to get paid up for all of the work we did. (We knew something was up after his first couple of checks bounced, and then he attempted to pay us part of our fee in Best Buy gift cards he had received from his uncle for Christmas). That moment was a wake-up call, so we managed to get some rock solid contracts in place from that point on. We started doing a lot of work for smaller local companies and other design studios. This operation was month-to-month for some time, when we decided to take the plunge. We were working 14-16 hour days from early 2004, until the beginning of 2005 to meet deadlines and get enough work done that we could slowly pay bills and make it into a living wage for ourselves.

In 2005, things began to pick up, we took our first "real" paychecks, and it was then that we got our first "real" office in Chicago's West Loop neighborhood: a 2500 sq ft loft space, super cheap rent, and it was just the two of us. We had big dreams and high hopes that we would fill the space. And guess what... we did.

By the end of 2007, we were full with 14-15 people working in that space, no real conference area, bathrooms that you could hear people pee in (I am not kidding, one of our project managers who is still with us can substantiate this claim), and we were running out of space. Plus, we had acquired some big named clients by then, and this space was just not going to cut it any longer.

By the beginning of 2008, we moved, into the space we are currently in: a 4000 sq ft building in Chicago's West Town neighborhood (on the outskirts of Wicker Park), much nicer and more professional. We opened a second office in Austin, TX around the same time, and on payroll we had upwards of 27 people total, all benefits, no contractors. We were doing it the right way, working on some large accounts. We grew, and we grew, and we grew.

And then...everything changed.

Restructuring

In late 2008 into early 2009, the economy, as everyone knows, took a plunge. We never lost our accounts completely, but when Fortune 500 clients decide they are going to spend 10-20% of what they spent a year earlier, you realize that something has changed. And so we finished projects, laid staff off in early 2009, and then were left to clean up the pieces.

Going through the process of suddenly having to shift your company from an expansion growth mode to a contraction survival mode was probably one of the hardest things we've ever done. Just like the big guys, you have to trim budgets, expenses and unfortunately, that means letting go of talent. But as a small business owner it is especially difficult to do this and not to simply give up. There were a lot of other opportunities for me along the way, as there were for others at the firm, and everyone hung in there like dedicated soldiers. This economic downturn was nothing short of a war within the industry, only we were not fighting our competitors, we were fighting the uncertainties of the business climate.

And as we went through this process, I took a look around at many other agencies, those who were 10-30 people deep and who had been around for a lot longer than us, and they were completely out of business. Completely. That is when things got very scary.

It's worth noting that we had everything they tell you to have in business school (even though I never went to one). We had a well diversified portfolio of clients, plenty of money in the bank, we had never had any business debt, we had employees who liked coming to work every day and we had good clients. And even though we had all of these bases covered, had done good work for many years and had a support from our employees, we were not immune to the economic downturn. No one was.

Nothing they teach you in school can prepare a business owner for a downturn like what occurred to us and many others in our industry. And one of the biggest lessons I learned from this first 6 year phase of Killswitch, is that building a successful business is a lot less about what you can control, versus what you cannot. Granted what we and many other agencies have gone through is probably the worst we will ever see, but that doesn't discount the fact that everything you build can come crashing down pretty quickly. You must do the things you can control well, but you also have to have a little luck and timing along the way.

Moving Forward

After the dust settled and the storm cleared, Killswitch was still in motion. We still had a project manager who was with us since our first office, several programmers that had been with us for many years and a few other staff who made it through as contractors. I can say that without the staff we have had over the years I would not have achieved the success I have in such a short time. They have been pivotal with the decisions that were made, and while there were mistakes made as we have gone through the cycles of business, I don't regret anyone's involvement or contribution to where Killswitch stands today. Everyone has had a positive impact, both for those people with us today, and those that are no longer here.

And so with all of this restructuring behind us, we were ready to achieve the impossible. To rebuild, correct the mistakes we had made, and to do this next round of Killswitch smarter, more efficient, and with even better work from before. And so far, we are doing just that.

As an owner of a small business, I now truly understand the responsibilities that come with this job. Whether it be the mouths that it feeds, or the impact it has on clients and their projects. For those more seasoned than I, this probably all comes as no surprise, but for me, there is nothing in this world I would want to do more than build a small business. My creative path has brought me to what I truly love to do and now that I have just turned 30, I intend on doing just that.

Onward and upward.

Footnotes on achieving success for new entrepreneurs and small business owners:

1. If you hire staff, always hire people better than you for the position you are hiring for. Don't worry about them making recommendations or opinions that may differ from the company's vision. While hiring employees that share a common layer of vision is important, finding employees who are independent and who want to add to a company's procedures and vision, are the most important kinds for you to find. Sometimes these employees are the ones that can change the direction of a small business in a very positive and eye opening way.

2. Don't think that owning your own business means that you will be able to easily make your own schedule. Your client base target will have a lot to do with this point, however, most of the time, clients don't really care that you're a business owner. They come to you for a service and expect excellence no matter who they see at the meetings. It is important to understand that as a new business owner starting out, your schedule, as much as it might be hard for you to admit, will most likely be dictated by your clients. At least in the beginning, success is not likely achieved otherwise.

3. Make sure that even when things are busy you take the time to look at as much work going out to clients as possible. When Killswitch started to grow, and we became layers of managers working at two offices, this is the one area I wish I had taken more time to perfect. Even your best employees will make mistakes, just like you have. As the owner of the business, you are responsible for the work going out, its brand messaging, expectation of excellence and achieving the client's expectational perception of the project. If you are in a creative industry, this point is especially important.