Trying to build a business from scratch is exceptionally challenging. New business owners often have very limited resources (especially money, labor, and time) and have to juggle a number of responsibilities, often without much training or experience. A company founder may be a great inventor but have little finance, accounting, logistics, or marketing experience.
To understand the surprises and challenges new business owners face, I turned to Dan Smith, who founded Smith Publicity 20 years ago and has transformed the one-client, one-man operation into one of the most prolific book publicity agencies in the industry. Below are three lessons he learned building a business from the ground up.
Kimberly Whitler: What is the biggest surprise you faced as a small business owner?
Dan Smith: Having never planned to be an entrepreneur, other than knowing I had to make money, I really didn't know what to expect. I never studied business or anything related to it, so it was all new.
The biggest surprise I faced early on was the need to constantly be looking ahead. When I started getting clients, I quickly realized that while servicing these clients, I also had to simultaneously always be looking for new ones. In book publicity, you usually don't have long-term clients – you have them for several months in most cases after their book is launched, and then unless they write another book, they’re done and don't need our services anymore. Juggling providing excellent client service while looking for new ones was not easy, especially when it was just me.
As my company grew, the biggest surprise was learning how difficult expansion was. Every time I had to hire a new employee because we got busier, I had to make sure we stayed busier, because my overhead had increased. I now have over 20 employees, and with each new one I hired, I had to balance increased income from growing with increased overhead. Now, since we offer some nice benefits including health insurance, life insurance, etc., overhead has increased even more with every new hire.
Whitler: What lessons have you learned as a small business owner?
Smith: Through trial and error and help from some mentors, I learned:
1. Follow your instincts, and don't over-think. While I have certainly made some decisions that turned out not to be good ones, most of the time, when I followed my very first instinct and gut feeling, I made good decisions. As a small business owner, you have to believe in yourself. If you’ve survived and grown after a few years, you know you’ve done some things right. Trust yourself.
2. Don’t ever take money just to make money. While I, and now my entire staff, always do everything possible to make good things happen for our clients, in the past – especially early on – I took on some clients I shouldn’t have, because I needed the money. I worked incredibly hard for these clients, but because their book either didn't match my skill set or was simply not a quality book, their campaigns weren’t as successful as I hoped. Instead of a happy client who would refer other clients to me, I had a disappointed client who appreciated my hard work, but was not going to be a fan who told others how good I was.
3. Being kind to competitors is smart business. Book publicity is a niche field, and there’s not a great number of people or agencies that specialize in it. Consequently, I know many of our direct competitors after meeting them at tradeshows and other events. My instinct was not to avoid them because they were direct competitors, but to be myself and show goodwill and kindness to them. Now, we have good relationships with some of our competitors, and because each agency does things a bit differently and prefers a certain type of client, we make referrals to one another. From the beginning, I always followed the approach of never, ever bad-mouthing a competitor, whether they are a “friendly” one or not. I think prospective clients appreciate professionalism and respect you if you don’t disparage competitors. In fact, we tell prospective clients to talk to various firms, and go with the one that feels right, whether it’s us or not. It’s just good business.
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