Small businesses have certainly taken a beating during this economic crisis we are still weathering. We have seen a lot of small consulting, design and production struggle with adapting to the rough financial climate. Some companies that have closed their doors permanently, while others have been forced to scale back. Navigating a small design or consulting company through such an unforgiving economy can force change.
Whether a business decides to scale back or not, we see a downturn economy as an opportunity for change and innovation. It can be a radically transformative growing process for a graphic design outfit, consulting company or a small production business.
There are a number of ways to come out on top. For one, improving your communications and marketing process can be a vital and rewarding effort. We have seen many design companies that fail to practice what they preach--for the reasons of time, being overwhelmed by projects or having too much work to care for marketing (or not enough work too). Someone that we have long taken inspiration from, a Shaolin Monk from the legendary temple in Henan China has repeatedly told his students: "Sharpen your blade!." Well, now is the time. Communications can not only help bring in new work but it can also improve an company's existing relationships. The process of refining internal and external communications can redefine an organization's core propose--reconnecting that organization with the founding goals and principals that once were the seeds of innovation and creative drive.
Another worthwhile pursuit can be to take charge of financial and project intelligence. For one, cleaning up the books of an organization and drafting policies for billing, estimating and invoicing can help an organization move forward faster as the economy improves and more opportunities arise. We do not just mean companies with multi-person leadership, we also are directing this message to small businesses or sole props. Build systems around the financial side of your organization. Templates for emails and research for instance or simply recording business processes may help you take an investigative look at your organization and gain better insight and discover interconnectedness. If you have employees, have them document their most frequent tasks and have a conversation with them to find new ways of becoming more efficient. Often times, after being asked for their advice or insight, employees can be powerful advocates for change and refinement.
Expand financial tracking and strengthen operations
Improved financial tracking can help you weed out unnecessary costs, while investing more money and time in the right areas. Cutting back is not always the best move in a downturn economy. Sometimes you need to find the right places to invest your effort. Try working towards a basic workload and financial prediction method for your company. To do so you will need some basic ingredients:
- Daily or weekly project balances
- Weekly summaries of business activities ( new activities and routine project activities )
- Monthly financial statements
Alternatively, another approach that we have found useful would be to try to build a process to gather these pieces of information:
- A weekly outline of active project balances or totals: try to demarcate a basic visual payment cycle based on an assumption of when a client can and will pay out
- Monthly expense estimates as a total in high level groupings
- Project cost estimates: Are there vendor costs, material expenses, etc.
- Resource utilization: even a small company can put together a less precise (estimate) of time utilization for employees or for your even a one to two person operation. For instance, try to track the time it takes for various projects--keep a log of time and tasks. There are a number of tools to help with this. One tool that we recommend is Liquid Planner, which allows you to record time investments for tasks--you can have multiple time entries per task, which we felt accurately reflected a typical consulting practice. This can be very helpful to understand 1. what projects are a waste of time 2. how many projects can you realistically take on at one time.
- Activity note taking: Note taking can be a seed of innovation. As you take notes you will become more aware of the total investment of time and effort that you apply to a project. You will also begin to identify blockages or trouble areas, while in the process of drafting new ideas for solving operational problems.
Such documents, as the ones listed above, can be the catalyst for building a solid infrastructure to even the smallest consulting companies. Intelligence is not a waste of time or effort--although since it does not immediately pay the bills for a design company (for instance), it can feel like a burden or distraction. Documents such as a basic log of utilization can pave the way for better decision making: such as the decision of taking on "client A's project" or firing "client B."
Now is the time for "sharpening your blade" if you are a small business--whether a design studio, a consultant, or a production house. Put into process simple operational data-gathering documents, and you just might find that these documents help give to clarity to make those "big decisions" easy.
