inQbation, formerly known as Artists Café, was founded on November 17th, 2007 by Blake Newman and Luis Cuellar. We started this business with a mission … to provide world-class web designs that were search engine optimized out of the box, at prices that small-business professionals and other budding entrepreneurs could well afford. We changed our company name from Artists Café to inQbation to reflect our focus and kindred spirit towards other entrepreneurs and startups.
Blake Newman, a veteran of multiple startups, brought experience, education, and 10 years of lessons learned from making multiple mistakes in team building and business development. “We learn the most from our mistakes,” says Blake, who is not ashamed to admit that he has made plenty of them.
Luis Cuellar, an outstanding project manager with a thick skin for Blake’s rampant tirades on efficiency, productivity, and customer service; wears many hats including chief of staff, project manager, backup developer, backup designer, and morale support.
As we approach both our first year anniversary as well as a global economic recession, we would like to share our philosophy and guidance towards surviving your first year in business.
Surviving the first year in business: Top 10 factors to survival
- Cash is king. Cash flow is crucial. Keep an eye on your checking account balances and work hard to keep a healthy cushion in that account. You will need it. Pay only the minimum payment credit card payment plus maybe an extra $25 so that the credit company reports you as paying “more than the minimum”.
- Credit is queen. In many cases, you can bootstrap a business on less than $100,000, which could be accomplished with four credit cards with $25,000 limits. This is a good use of credit. A poor use of credit is to buy a 50 inch plasma TV, especially if you do not need it for business.
- Keep overhead to a minimum. Don’t blow a lot of money on fancy chairs, desks, decorations and sound systems. Instead of buying a new desk from Ikea for $500, go to Home Depot and buy a cheap door for $35, flip it on its side and place it over two two-drawer steel file cabinets. You’ll need the file cabinets anyway.
- Hire selectively. You need great employees and it’s a lot easier to hire than to fire, so be very selective and careful about whom you hire. It’s also a good idea to test the employees before you hire. Perhaps, hire them as a temporary sub-contractor for a week or a month before you make a permanent hiring decision.
- Communicate with your customers. Communication is crucial especially in the project management or development business. Often, we will get so focused and into our zone that we fail to inform the client of our progress. We may be doing stuff but if the client doesn’t know it then things relations will crash, especially if and when things start to bog down. It is very important to keep your clients updated and informed of progress and issues.
- Inspire your employees. Make no mistake, starting a business is tough. Indeed, 95% of all small businesses fail during their first year, mostly due to a failure of cash flow and credit. But, you cannot let your worries foster and fester in the minds of your employees. You need to be transparent with your employees but more importantly, you need to inspire and encourage them. You need to step up and be a leader and a cheerleader. I refer to my employees as Spartans, like those from the movie, “300”.
- Prepare for success. One of the worst things you can do is to be so busy with business that you allow customer service to erode. You need to design and engineer your business so that it is scalable. You need to be prepared for an industrial surge of success. This could mean developing relationships with sub-contractors, potential competitors, third party fulfillment sources, etc. If demand suddenly increases, you need to be able to handle it.
- Prepare for battle. Of course, most people go into a business with inflated expectations of success. Few can foresee all of the obstacles and roadblocks to their success. Whatever your sales projections are and financial forecasts, you need to reduce them by about 80%. If you think you’ll sell $500,000 in the first year then expect $100,000. If you think it will take a week to produce something, adjust your expectations and plan on it taking 5 weeks instead.
- Measure everything. You cannot manage what you do not measure. Especially in the beginning, you need to measure how long it takes to produce something. How much it costs to do something. How many visitors to your website? How much are you spending on office supplies? The sheer act of measuring raises your conscious level. This data will be very important in the future, when you look back to measure progress and efficiency.
- Be organized. This applies to time, people, and paperwork. With regard to time, it’s important to avoid distractions; lump like activities together like paying all bills at the same time or answering all e-mails at the same time instead of whenever they come in. Focus people on the activities that are most important. Think to yourself, what is the most valuable or profitable thing that I or my people can be doing at any given time … and ensure they stick to these tasks or activities. Keep your important papers in one place. Have a place for everything and put everything in its place.
At inQbation, we wish you the best in your business. Here is another statistic for you, 95% of those who manage to survive the first year will go out of business over the next 4 years. The odds are certainly against us. So, we need to work that much harder on those 20% of things that will achieve 80% of our results.
One final thought … patience and conviction. If we have any chance of surviving, we need both patience and conviction. We need to believe in ourselves, in our cause, in our product, in our people, and in our company. But, we need to know that rarely do things happen as quickly as we would like. We need to continue to persevere but know in the back of our minds that some things simply take time. I am an impatient man, I want it now and my mantra to my employees is, “just do what I tell you do,” expletives intentionally deleted. But, I need to temper my drive and anxiousness with reality. Patience and conviction, patience and conviction.