Growing Your Company

What You'll Need to Worry about in the Near Future
by David C. Baker of ReCourses, Inc.


What will the next couple of years look like at your firm? Before answering that question, let me list my assumptions: that you are competent, that you are not working in one of the very few areas that is not doing well, and that you have entrepreneur's disease.

If you've had your head down just getting things done, you may not have realized how well advertising, design, public relations, and interactive firms are doing these days. With very few exceptions, principals are finally getting back to the point where they can be pickier about what clients they work for.

Not picky enough, though, as many of you would rather sell your firstborn than say "no" to opportunity. So some things are already happening, as you stand passively by. Even though things haven't been this good since early 2001, let me take just a few minutes of your time and provide some friendly advice about how to manage the next two or three years so that you continue enjoying it. We'll start by talking about three things you'll likely struggle with, followed by some suggestions in three specific areas.

Looking Longer for Good People

It's going to get more and more difficult to find them. Many of those who went out on their own during slimmer days have grown to adapt and enjoy the freedom. They are content charging $80-120/hour as independent professionals, choosing their own hours and type of work.

On top of that, far fewer graduates are entering this industry and demand is exceeding supply. When you do find what seems to be the right fit, wage requirements can be higher than you budgeted given the pressure on housing and healthcare that many prospective employees are feeling.

Becoming Reactively Deadline-Driven

As you get busier, you tend to get more reactive. An environment that should be more "profit-driven" becomes "deadline-driven," meaning that when something is due becomes more important at each handoff than how much time to spend on it. You focus on just getting it done to meet your external obligations, forgetting your internal obligations to consistently turn a profit.

Letting the Culture Slip

As you add bodies to the mix, you make do with less space, creating an emotional crowding that's insidious. Or perhaps worse, you accept less than an ideal facility arrangement that reinforces the separation of duties and drives wedges between, say, the suits and the creatives. If the culture is not collaborative to start with, physical boundaries can exacerbate these issues.

Each new person who joins the team is added because you have capacity issues, so it's almost assumed that they'll get dropped behind enemy lines. Later, you promise, "we'll sit down and do a proper orientation," which may not happen. So expectations aren't delineated and relationship bridges aren't built.

But what if you can't even find that employee? Do you decide to lower your standards a tad to avoid leaving the vacancy perpetually unfilled? You already know where that can lead.

In sum, you want to watch carefully that your management scrutiny and decision making is not compromised by the attendant pressures that come to you personally from increased work volume.

Now for a few suggestions on how to manage this responsibly.

Control Growth

How? By not letting it happen to you. You might even follow a quick checklist, in order, before you add to your employee count. As you face capacity issues, ask:

  1. Is my client base ideal? If it's not, kindly dismiss a client to free up capacity without hiring someone else.
  2. Are we charging enough? If you aren't, charging appropriately higher fees will inevitably free up some capacity as unqualified clients self select out of the mix.
  3. Can I grow with cash on hand? Cash is a wonderful filter for decision making — it slows you down, forcing you to stop and find out why you don't have the cash you should. Regularly not having enough cash is not a sign of cashflow issues, but rather a sign of profit issues.
  4. Am I willing to pull even further away from doing and embrace a tiny bit more managing? Every new employee requires movement in that direction.

Always fix what you have before you add to it.

Maintain Profitability

Don't lose focus on profitability. If you don't regularly have a substantial profit to show for the risk you're taking, all you've got is an underpaid job as a dorm mother in an orphanage. Pay yourself the right amount, maintain enough cash on hand, and still achieve a 15% net profit. And don't forget to implement a good cost-accounting system for internal hours instead of just concentrating on external hard costs.

Shape the Employee Environment

It will be important to create an environment where current and prospective employees want to work, but without mortgaging your firm's future. The most important thing you can do is to communicate regularly with anyone reporting to you. I'd suggest that you each keep a log of the things you want to talk about, then get together for just a 15-minute walk once each month.

Consider giving one-time bonuses instead of raising a base salary. It'll be easier to keep that employee if things take a downturn. In that vein, never start an expensive practice (like lunch every Friday or paid cellphones) without a defined point at which it will stop. You can always extend it.

And resist the urge to overpay people, setting them up to be resented during the next cycle. Do what's right, let your employee base settle out, and then size your client base accordingly. But if you do happen to come across a great employee before you need him/her, consider grabbing them anyway. Great ones are going to be harder to find.


Your job is primarily to serve your employees. If you do that job well, they'll do a fine job of serving your clients. Don't forget that as your workplace turn a little hectic over the next few years.

This article has been provided by ReCourses. For more information, please visit their website at

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