Up until about six years ago, I was a typical cubicle worker in the advertising industry in New York. I had the nice title of creative director, a very decent salary and benefits, crazy working hours and little social life. I was far more intimate with my Mac than I was with my boyfriend.
Now it’s 2001 and I am one of two people running a small company in the suburbs of Zürich, Switzerland. We are one of those independent dot-coms that is, knock on wood, doing fairly well despite the current gloomy news and our very small size.
Here is how we got to this point, which may be of interest to anyone who might be considering going independent too.
From whence we came
PRODOK Engineering consists of Max Wyss, my partner and spouse, and myself. Before we dot-commed ourselves, we had both traveled divergent paths. He is a graduate of the Federal Institute of Technology in Zürich, with a Master’s degree (dipl.ETH in Swiss terms) in Materials Engineering. Using his tri-lingual skills and analytical mind, he was making a living as an independent technical writer and translator. (Incidentally, this is where the Engineering part of our company name comes from. It confuses some of our clients, not to mention the weekly phone call we get from civil engineers looking for jobs, but we kept it anyway since we like to think of ourselves as engineers of good solutions.)
I, on the other hand was steeped in graphic design; with a mixed education in fine and liberal arts, I lived in Photoshop, Illustrator and Quark Xpress, and I carried a jeweler’s loupe around with me to scrutinize dot patterns on print proofs. We both had a good knowledge of computers (Mac, PC and Unix), plus a rather long history of hanging out online.
Prior to moving to Switzerland, I did a survey of the job market and went to a few interviews. To my surprise, I found out that I could indeed get hired in my field, despite my nonexistent German skills. I even got a couple of serious job offers. However, something in me was resistant to the idea of jumping right back into the cubicle world. I was tired of the daily grind, tired of office politics, tired of reporting to multiple layers of supervisors. At the same time, Max was starting to feel the constrictions of technical writing as an ongoing profession. So after many long talks, my future spouse and I decided to try to run our own company together.
At this point, I’d love to say we went in with a solid business plan, but it wasn’t quite the case. All we knew was that we wanted to get into the “Internet thing.” However, back in 1995 it wasn’t so easy to find customers who would even consider having a website, at least here in Switzerland. So we did what we could to build up the skills we needed in order to shape our business the way we wanted, from building mock websites to playing around with raw PDF files and more.
In the meantime, we improvised ways to make a living. Max continued to take technical writing and translation jobs, but also started to offer add-on services from creating finished layouts in Framemaker to writing RoboHelp files for software. I, on the other hand, tried to work on my German (this is an ongoing process), did some print design jobs, and took on translation projects as well. In other words, we did whatever we could to survive financially. At one (very low) point I even helped out for a couple of months at my mother’s restaurant in New York. At least I got to shake hands with Steve Jobs one night when he came in.
Marketing at the start
Marketing yourself when you are just starting out can be a terrifying prospect. Neither of us are good at traditional marketing efforts, but we did the best we could. Things we attempted include:
- Sending out paper brochures. When we started to offer our new services, we came up with some marketing copy in English and German and printed brochures on our Apple Laserwriter NT on pre-designed laser brochure paper. We didn’t have the budget to have them professionally printed, but we tried to compensate with our amazing layout skills. We sent them out in batches of 500, gleaning addresses from industry organization directories and the ads in the backs of technical magazines.
- Cold calling. We dreaded this, but we did it. We got tons of hang-ups and no-thank-yous. Gradually it got easier. We also called up existing and former clients, friends, friends of friends, and so on.
- Going to trade shows. We didn’t have the budget to set up a booth of our own, but we did and still do frequent trade shows and conferences that are relative to our field. We go with a bunch of business cards (designed by ourselves, of course), engage people in conversation, and otherwise network as much as possible.
While the success rate of all of the above methods was quite low in terms of percentage of success, they did all lead to actual work, so we consider it time well spent. It becomes easier to do those dreaded cold calls when the mortgage bill is looming and all you can afford for dinner is canned pasta. At least two of the companies we found via our initial brochure mailing are still good clients.
Incidentally, we splurged and got our business cards printed properly, designed by ourselves of course. Perhaps it’s my Japanese heritage, but I firmly believe that a business card is the face of any company. Your office could be in your parents’ basement, but a slick business card makes you look professional. It’s a tangible thing that everyone understands. We still get oohs from people who see our card for the first time.
Once you built some kind of reputation, marketing becomes a lot easier. We no longer do the mail-outs or cold calls, but we still do the trade show circuit. It’s a cliché but word of mouth is the best kind of marketing.
A pretty website is not enough
Where a good company website can help is to show your areas of expertise, and the important facts. Therefore, the copy is just as important as the coolness and the graphics. Many people just come to our site to look up our contact information, which is why the most recent version of our site is quite low-key and fast loading.
Most independent operators initially underestimate their fees. There are some formulas for doing this, but the point is to never, ever undercharge. You do not charge the same hourly rate that you were getting when you were employed. Your fee is double and more. When you are independent, you have to cover your insurance fees, pension, disability, rent, equipment fees and more.
We are both lousy at bookkeeping. We struggled for a time trying to keep our own books, but we always hated it, and the receipts kept piling up. One thing that saved us from going to ruin was that we always had an accountant to check on us and keep us out of trouble. Without him, we would probably be out of business long ago. Some months we could barely pay his fees, but luckily he was understanding enough to not press for immediate payment. Every penny we pay to him is worth it. And, we recently hired a bookkeeper. Whew.
The other big obstacle is collection. We have been lucky enough to have clients who usually pay promptly; however, certain clients are chronically late, and we have on occasion been in some hot water because of this. When you are a small company, it is often difficult to deal with the confused labyrinth that exists in the Accounts Payable departments of many large corporations. One of our clients, even told us just to add the overdue fee for two to three months in the initial invoice!
We don’t have a total solution to this problem ourselves, and we have spent many a sleepless night worrying over invoices that are weeks overdue. One tactic that has worked to some extent for us is to offer a small discount for early payment. Smaller companies in particular tend to take us up on this offer. Another thing that we always do for anything other than quick jobs is to work and bill in stages, starting with a Memorandum of Understanding (MOU): this gives both us and the client a chance to explore the project and each other, with graceful way for one or the other to back out if necessary with no hard feelings. (For more about MOUs, read Wendy Peck’s advice.)
Building on core competencies
As a small company, it is impossible for us to provide “complete services” the way a large company can. So we don’t. Instead, we provide a fairly narrow range of services, but we like to think that we do what we do well.
Having core specialties also means that you have a chance to be known as being experts in that field. This can lead to further business and marketing opportunities: Last year, for example, we conducted three major workshops for PDF and Adobe Acrobat Forms; and we’ve also been invited to speak at various conferences. It’s a great way to expose yourself to potential new clients.
All our other services are tangential to this core. For example, we offer site hosting on our own server, but we don’t market ourselves as hosts; our server side services are offered only to clients for whom we do other jobs. Similarly, our design and graphics services are in most cases offered as part of bigger projects, though we take on small print and online graphics projects to fill the gaps and for special clients.
Having a specialization does not mean that we are ignorant about related technologies. We both take considerable amounts of time to educate ourselves on the areas we need to be familiar with. (Skills improvement takes up a serious chunk of our budget as well as time.) I couldn’t write a decent ASP script to save my life, but I know pretty much what to ask for.
Establishing a virtual working network
When we need to tackle big jobs that are beyond our capacities, we call on some trusted colleagues who also operate small shops, such as Marc Veron, a talented programmer and developer, or DTP Magic AG, who do wonders with database based publishing. It is absolutely essential for small companies who wish to remain that way to establish such networks. Even if you are Super(wo)man, there is no way to be an expert in everything. The added benefit to this approach is that we can also be confident in telling our clients that they will always get the best experts for the particular task. We firmly believe this gives us a true edge over companies who just rely on hired help, and even if we grow bigger one day, we will continue our networking approach.
Our virtual network extends far beyond the Swiss borders. We have trusted colleagues in Germany and the U.S., and we’re constantly looking out for more good people. We find these people mainly via the numerous mailing lists we subscribe to, as well as at trade shows and conferences and via word of mouth.
Mailing lists are an invaluable resource: for learning, making contacts, and just the conversation. When I open up my mailbox to read the many conversations going on, I feel as though I am in a busy office. Loneliness and feeling isolated is something you have to combat when you work for yourself, and mailing lists go a long way towards alleviating these symptoms.
When disaster strikes
Chances are that something catastrophic will happen at some time. For us, this was in the second half of 1999. To make a long story short, one of our clients, a multinational corporation, stopped payment for three months’ worth of almost full-time work, and brandished the threat of their substantial legal department against us. Since we had been turning away other business to concentrate on this very difficult project, we were in deep trouble. Not only were we facing possible bankruptcy, we weren’t sure how to get the money for the upcoming bi-annual mortgage payment, and we were very worried about the damage this could do to our reputation.
We survived this crisis with a lot of help from friends and relatives. First of all, my stepfather generously lent us the money to pay the mortgage, no questions asked. We cut down on expenses. As for our reputation, it turns out that this particular company already had a notorious reputation for doing similar things, especially to small contractors. Since we were confident that we had done our work, our reputation came out intact. This was in large part due to our friends and colleagues, who enthusiastically spread the word about exactly what had happened.
We built back up our financial nest egg over the next few months, and managed to pay my stepfather back last year. We have never collected on the unpaid invoice, and at this point we have determined that further legal efforts will cost more than the actual invoice amount. But it did teach us some valuable lessons, such as: when you’re dealing with a very big client with big legal department, be super-extra-wary and go in with an iron clad contract.
So has it been worth it?
Looking back, it’s been one bumpy ride. We’ve had lots of sleepless nights, lots of arguments, and long stretches where we’ve either had way too much work to do or none at all. Our personal relationship has gone through some difficult times because of the business problems, though we ultimately held it together. But after a good year of steady growth, with this year looking even better, we finally feel confident about the future of our little enterprise. We are even at the point of hiring full time staff, but that’s another story.
Even now though, there is no letting up. Being independent does not mean reduced working hours – it’s the other way around. Sure, we can work whenever we want instead of sticking to a 9-5 schedule, but the hours don’t let up. Rare is the day when we can wrap up work in 8 hours – I’m still rather more intimate with my Mac than I am with my husband. Besides the meat and potatoes of your work, you must spend many hours dealing with non-billable work. Being independent doesn’t mean you get to do what you want to do all the time. You also have to do a lot of things you dread doing, whether it’s marketing or dealing with difficult clients or struggling with the accounts. And there is no safety net.
But still, would we do it again? Absolutely. We might do some things differently and plan a bit better, but the sheer joy and challenge we get every day from knowing that everything we accomplish is up to us, is worth everything. And the view from my current office, out to my garden with the hills beyond, is much better than my old office wall.