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Getting the Numbers Right

What You Really Need to Run Your Business During Tough Economic Times

FunctionFox executives Corina Ludwig and Matt Humphries meet with expert FunctionFox customers from varying disciplines of creative service, to uncover the themes common to success during tough economic times.

If today's tough economy presents challenges for small design firms, it also presents opportunities to grow businesses, say owners of some of the leading shops in North America. Beyond profitability all agree that staying one step ahead of the competition during a down economy requires fortitude, confidence, a laser-like focus on the bottom line and a drive to innovate.

Running a successful small design business in 2009 is a challenge, and owners are scrutinizing their internal business processes, their staff, company culture, and client relationships to figure out what is necessary and what needs to be cut.

Tough times mean making some tough staffing decisions. Now more than ever, owners of small design firms are acutely aware of staffing mistakes they've make in the past. Staying lean when budgets are shrinking is top priority, so they're holding off on new hires. They are looking closely at their existing talent pools and the resources at hand, such as software systems, as a solution. As a result, the current staff is being asked to do more with less.

"In the last few months, when the shop gets busy and we consider hiring, we stop and think: can we do this without hiring someone new? Could we pull this off by working a little harder?" said Sean Adams, Partner, AdamsMorioka in Beverly Hills, CA.

"With shrinking client budgets and the economy in free fall, we're running lean and mean, which means that everyone's doing a bit extra to get things done," said Mark Busse at Industrial Brand in Vancouver, BC.

Shifting more work to current staff doesn't necessarily mean that everyone at the company give up their personal lives. What is required is a change in approach to the work itself. For example, says Adams, train teams to stay more focused. He says that a lot of time is wasted - and efficiency lost - when projects meander. "The biggest issue I see with designers is that they won't make decisions," he said. "The solution is to work harder, not by doing more, but by being deliberate and more focused. Maybe we don't need to do three versions of this, let's solve the problem the right way rather than doing it over and over," he says.

Important to this process is taking a micro-view. "The majority of people can get the big things right, it's getting the little things right - process, accuracy, and a real understanding of the client's objectives that make all the difference," says Christine Hollinden, CEO at Hollinden Professional Services Marketing in Houston, TX.

Owners say their business benefits when every member of the team understands what he or she is accountable for. That means getting down to brass tacks - the numbers.

"Having the staff understand what it takes for a project to be profitable, and understanding that this is a for profit business that is the goal," says Hollinden. Some employees may be resistant to dealing with numbers because they may not feel that they are wired that way. "They say, I'm a creative person - I can't understand numbers! Hogwash. Figure it out!" says Adams.

"We maximize accountability throughout the studio by focusing it on one position or one department. That has allowed us cost savings and a level of accountability and involvement," says Kevin Kelsick and Mauricio Giammattei at Cre8tiv Juice Group in Miami, FL.

Fostering a collaborative company culture cannot be undervalued when budgets are tight. One way not to do it is to gussy up offices with fancy furniture, game rooms and the like. "I can live without t-shirts, super expensive furniture, 30-inch monitors for everyone - all eye candy toys. Heck, I don't even think we need pants, though they're nice," said Busse.

Amenities rarely deliver a return on investment; instead, focus on the human. Amp up internal marketing. With everyone working so hard, so fast and so furiously, it's hard to stop and smell the proverbial roses. Yet, firms should take the time to congratulate themselves - and their clients - for successes. Key in staff and clients to successes, such as mentions in magazines and books; this can help to boost morale and loyalty and validate a job well done.

Of course, critical to staying ahead of the pack during tough times means making client relationships the top priority. Continuing to educate the client, bringing them into the creative process and coaching them along the way was cited by numerous owners as one of the most important factors for success, particularly at a time where making errors or striking the wrong note can be fatal to a business relationship.

Kelsick at Cre8tiv Juice Group advises firms to become black belts in setting expectations. "As creatives, we tend to underestimate the amount of time it takes - not only to manage people within the creative process, but to manage how a client interprets our creative process - and it works to our detriment at times."

Finally, a chorus running through conversations with firm owners is that, in this environment, confidence counts. That means, pushing the envelope, being innovative and using non-traditional approaches.

"In the current economy and with all the issues that we're facing, the consumer and end users are looking for difference and change. They want to be reassured that people are looking at them differently than they have in the past," said Mauricio Giammattei, of Crea8tiv Juice Group.

More and more, for clients to survive, they have to be willing to go along for the ride.

"Clients are willing to take revolutionary steps in how they think about what they do because the media landscape has changed so much. There is a significant amount of reinvention that needs to happen," says Steven Morris, President and Executive Creative Director at Morris! Communications in San Diego, CA.

In this tough economic climate, small design firms are uniquely positioned to innovate. And it's an exciting place to be, owners agree. When staffs are lean, budgets are tight and clients want more - or at the very least, different - innovation is practically an imperative in order to stay on top and profitable.

Corina Ludwig is Vice President, Operations, and Matt Humphries is Director of Sales and Marketing for FunctionFox Systems, Inc., the leading provider of time and project tracking software for small creative companies.

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