Last week I published an article with an example of a cashflow forecast document appended. One of the problems frequently encountered in practices, whether new or long established, is matching available resources, human and financial, to the needs of the projects going through the studio. No two designers have the same skill set, one being good at , for example, joinery detailing or millwork in the US (wake up at the back there) and another being strong on the conceptual aesthetic side, sometime disparagingly referenced as being a ‘rag picker’. Ensuring members of your team are playing to their strengths is part of your management task.Unfortunately jobs don’t come in at tidy intervals that lend themselves to giving everyone a nice steady work flow. There are a number of ways of dealing with this, and I first want to look at it in relation to last week’s area, cashflow. This is in part because keeping your team happy comes from being able to give them the essential – their pay. Paying them is predicated on your being able to bring in the money in a steady stream.
Remember the Golden Rule – he who has the Gold Rules, so chasing Clients for money is a delicate matter, but you are a talent worthy of hire and therefore worthy of being paid properly. If the Client frigs about on payment, find another client and then dump the poor payer – and don’t do ‘owt for nowt’.
When you start, or after one of frequent recessions (usually, it has to be said, engineered by our political leaders) you may well find work comes in with a rush. The those first in line, the creatives, those making up the ‘mood boards’ or defining concepts are the first to be put under pressure. If more than one job appears, and particularly after recession with a list of established client this can be three or four jobs, then you have the beginnings of bottlenecks in the studio and a sense of panic can creep in. My practise once received eleven jobs in the same envelope! How do you cope in this situation?
The first priority is to keep the Client happy that you are progressing all the work. Then look at the type of project and where and when the stage payments are going to come in. Put the stage payments into your cashflow forecast. What does it do to your income? No don’t think wow new car, think staffing. you want to progress the work you have efficiently and it might be tempting to buy Armani, but first priority is to keep the business on a stable footing not boost your short term income. Use the cashflow forecasting to look at staffing, where does the spend come? Can you spread the work time wise – e.g. speed up job A and slow down job B, without Client pain. This can then spread workload across a longer period enabling it perhaps to be dealt with by existing staff.
Can you bring in a mate to help (known as freelancing) from your old firm? Maybe someone who is employed elsewhere but would be happy to do a couple of evenings or a weekend with you for old times sake and a bit of extra cash. If it is CAD work maybe a freelance CAD worker can do it, with careful checking of course. Finally (and if it’s 11 jobs, probably) do you take on a new employee?
Your cashflow is where you will find the answers, but before catapulting yourself from being you and your spouse running hard to develop the business into becoming an employer, make sure you can afford the process and that there are not alternatives. Remember my words from the first article: ” without good management this first bold step can be over a precipice to disaster”.
The first step to moving from being the designer to running a design business is to learn that you are no longer just an Indian, you are now a Chief, a leader of your own tribe, ‘der management’.
