You Could See it Coming…

Jul 25, 2005

I got a call from a friend and old client of mine recently. He’s down right now— and has been for months. His small design firm just isn’t doing very well, at least not compared to what it used to a few years back in those “heady days” of the late ‘90s and early 2000s. Yeah, back then, after years of working for other people but only shortly after starting his company, he found himself making more money than he thought possible. He bought a new house in an expensive town, a new SUV, a couple of new motorcycles, and started taking expensive vacations to exotic foreign locations. Life was good! Then, a little more than a year ago, things started to slow down. He stopped getting work from some of the clients he was used to serving. Their businesses were changing, and some of his client contacts in those organizations that he had relied on were no longer there. The phone stopped ringing, and he had to start going after work for clients at one time he never would have considered working for. Of course, the fees, too, went down, and with fewer clients, less work, and less money rolling in, he was depressed. The truth is, when you look at this guy’s situation, you could have seen it coming. Over the last three years or so he’s been spending way too much time on his hobbies and not nearly enough on his work. He’s a real outdoorsy guy with a lot of interests. But, in short, he let too much slide and got a little too cocky. He also never had any loyalty to his key employees, always trying to get experienced people to work as independent contractors so he could avoid paying them benefits and not make any real commitment to keep them going. As a result, they are all doing different things now— just not for him. So the bottom line is— you could have seen it coming. I am honestly surprised the good times lasted as long as they did for this fellow. So what to do now? Here’s what I told him: Start marketing. This guy has never done anything beyond making a few phone calls to people he knows. He needs to do a lot more— like send out regular press releases, do some simple direct mail and e-mail marketing, and get a new web site. He’s also got to get more involved in the professional societies and organizations that his clients belong to so he is seen as more of a “fixture” in their industry. Hire the right key person. He really needs someone that he can trust with more than design or production tasks. He needs a key employee who is going to be able to take over for him when he’s out of the office or on one of his personal missions so the business doesn’t fall apart. This will involve paying a salary (a good one), having decent benefits, and being willing to commit to building an organization that will hopefully one day outlive him (no one wants to work for someone who isn’t thinking along those lines— at least no one who is any good!). Get his work and leisure priorities straightened out. He needs to play less and spend less on himself. This may mean fewer new vehicles and expensive meals out, and more money going into his business because it is the machine that feeds him and his family. This is an age-old problem with architects and a lot of other small business owners. They too often get the idea they can immediately ramp up their lifestyles based on short-term results that may not last, and find themselves strapped by excessive overhead when it doesn’t. Of course, he was very defensive after we had our conversation. But he’s also a smart guy who knows there’s some wisdom in my advice. I just hope he follows it! Originally published 7/25/2005

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