By Julie Mitchell, an EO Toronto member
Whether it’s a legitimate tipping point or just a milestone that prompts us to reflect, the five-year business mark seems to be a critical juncture for most entrepreneurs. Perhaps it’s because five years is the point where we’ve officially grown out of startup mode, have typically gone through at least one economic cycle and have a pretty clear gauge of whether we are growing or in need of retooling.
In my design company, we have enjoyed the happy problems that come along with growth management since our launch in 2002. A design studio that specializes in brand, graphic, and communication design, we were named one of PROFIT Magazine’s “50 Fastest Growing Companies in 2006,” and by the five-year mark, we had a 5,500 square-foot facility, a committed team of eight and US$1.4 million in revenue.
Then we hit our five-year mark— that business lull that affects so many of my peers. While things were going well, our eyes began to open. We seemed to be working hard, but getting to that next level was becoming significantly more difficult. Couple that with a shift in the economic climate, and we recognized that our current business model needed to evolve in order for us to grow.
Like many service-oriented firms in startup mode, we received new clients simply by answering the phone in the early days. We had no filters for client recruitment, and in many cases, we were taking on clients that weren’t aligned with our brand values. As such, they weren’t going to be loyal in the long run. Many companies end up getting stuck at this phase; worst of all, their existing clients wind up dictating the future of their business. Knowing this could happen to us, we decided to take control … and it has put us back in the driver’s seat. How did we secure our future?
First, we looked at our business and re-engaged with “why” we do what we do, which is to craft great brand experiences. Second, we asked which of our clients worked with us for this same reason. Those in the “yes” category were the clients we enjoyed working with most and wanted to replicate. Those in the “no” category were the clients who we didn’t enjoy working with, yet ended up taking a lot of our time. These were the clients who looked at design as a commodity, versus looking at design as a valuable tool for enhancing the brand experience.
Although we didn’t go so far as to “fire” the clients who weren’t right for us, we did make a clear and conscious effort to focus more of our attention on the ones that were; and we explored their key characteristics to help us identify new prospects. What we learned was that our ideal clients were design-savvy, marketing-savvy and they had passion. They truly loved what they did and were excited about the projects they submitted.
Using these filters, we started to strategically recruit the clients we wanted to work with, as opposed to simply working with clients because we felt we had to. Now we can better target our marketing efforts, which means we’re engaging with the right clients more quickly. It’s not only making our marketing and new business development more productive, it’s making the next five years look a lot more exciting.