As consultants launch and grow their firms, they often seek out advice from their personal network. That advice is usually inadequate – not because the provider is insincere, but because they typically have limited insight into the advice seeker’s specific business challenges. A veteran mail consultant might not be the best person to ask about launching an app-based startup, and your uncle almost certainly doesn’t know how many people you need to hire in your second year of consulting.
Whether you’re at the startup stage or you’re growing a mature firm, there are a few key ways to confront the hidden pitfalls in the campaign industry. This is my best advice, as a business consultant who focuses on the political industry.
During the startup phase, try your hardest to kill your idea.
Often, when people are considering starting a new venture, they’re secretive about their plans: they keep their cards close to the vest, thinking that if they talk too much, someone might steal their idea. This is a mistake. Great business ideas are a dime a dozen. The value of your business lies in the execution. To wit, ever notice how some of the richest people made their money doing the most boring things?
To save time and money, the first thing any prospective business owner should do is to tell as many people as possible about their idea and solicit honest feedback. With the help of other people’s perspectives, try your hardest to kill your idea or poke as many holes in it as possible. Try to come up with everything that could possibly go wrong post-launch (your family and friends will tend to be unrealistically supportive, so be clear about what you’re asking from them). If, after going through this process, you realize that maybe your idea wasn’t so great after all, you’ve just saved yourself a lot of time, money, and heartache.
If you’ve still got a strong basic premise, with a few challenges you hadn’t previously anticipated, congratulations. You’re going to be starting much more efficiently than if you had waited until those problems naturally occurred, and you’ll have answers at the ready when potential investors posit anticipated pitfalls. Either way, it’s a win.
You need to do REAL financial forecasting.
I see a lot of business owners who are trying to keep their numbers in their head, and even more who rely on retroactive reporting (think pulling the P&L from Quickbooks). Unless you’re a solo practitioner with a very simple business model, the former is a recipe for financial disaster and the latter can only tell you what’s happened in the past. Not a great way to manage a business in any industry, but a terrible way to do so in the political industry, where revenues are cyclical.
Instead, you need to model out your future financial forecast so that you have a good sense of when money is flowing in and out of your business. You can’t make good business decisions (for example, when to hire) without having a strong sense of how each decision impacts both your short-term cash flow and your long-term profitability. If you’re seeking any kind of outside investment, this data is the most essential part of your pitch.
Do you strategic marketing work before you launch.
Marketing is more than just calling up your designer friend to whip up a logo. You need to think strategically about your market position before you launch and revisit this process as you grow. What do you do, how do you do it, and who do you do it for? How big is the market you’re trying to serve? Who else is doing what you’re doing, how are they positioning themselves, and how are you positioning yourself differently? Once you have solid answers to these questions, executing your day-to-day tactical marketing (website, collateral materials, social media, and so on) becomes much easier.
Fire some clients.
In our industry, there’s an endemic fear of burning bridges, and when you’re starting out it can feel like you need to take whatever you can get. But holding on to bad clients out of fear is the fastest way to put yourself out of business. If you’re good at what you do and you’re diligent about your marketing, the good clients will come.
Once you’ve got your business going, continually monitor the quality of your clients. Measure them based on how well they fit into your market positioning, the ratio of energy they take to money they pay, and just how much you generally enjoy working for them. The client who constantly calls you at 3 a.m. and is abusive to your staff is almost always going to cost you more than they make you (how productive are you when you haven’t had enough sleep, and how much does it cost to replace that employee?).
Fire them! Then think about your best clients: the ones you have fun working for, the ones who pay on time, the ones who refer you to their friends – and do everything you can to keep them on board and find more people like them.
Be creative with staffing.
It’s temping when you’re starting out to hire first at the junior level, because it seems like that’s all you can afford. But entry-level staffers require a real commitment – you’ll need to make sure you have the financial, emotional, and time bandwidth to take someone on, manage them actively, and pay them to learn the job. Entry-level staffers are also the hardest to hire correctly.
People trying to break in to the industry feel pressured to say whatever it takes in an interview to get hired, which makes it difficult to get a sense for their true strengths and weaknesses. And hiring correctly is crucial: if you don’t put someone in a job that plays to their strengths, they’ll be back out the door within a year, leaving you to start from scratch with someone new – not exactly a recipe for runaway success.
Before you hire, consider if investing a bit more to bring on an experienced hire would be more efficient for your business in the long run, or if you want to put in the effort required to find and groom an entry-level person with the hope that they’ll stay with you for a long time. Be honest with yourself and your prospective employees regarding your actual needs: if you’re looking for temporary help, be transparent and hire a contractor. There are a ton of extremely capable freelancers in our industry who would love to shoulder your extra burden for a few months.
For the love of God, always get a signed contract.
I don’t care if it’s your oldest friend or you own mother, money will come between even the strongest relationships. Never do business on a handshake.
Michelle Coyle is president of BGSD Strategies