How Do Price Changes Affect Consumer Perceptions?
By Kara FinnertyJun 1
As a digital marketeer my days used to be mainly concerned with social networks, digital innovations and whether a piece of video content might go viral.
Now, as a joint business owner, alongside three other partners at Inkling, my concerns are a lot broader and I have learned four secrets crucial to anyone having to make those big business decisions …
1/ The Future Is Now
Businesses that don’t grow are as dangerous as those making a loss, so while you are thinking of the work this year, you are also thinking: “Are we making the right decisions to do better next year?”
A bit like the manager of a football team, but also being the Chairman of the Club, Chief Scout and Board rolled into one.
People’s opinions change. So what might be an agreed vision for the future a month ago might take an about-turn later.
Surprisingly, human issues may have amazingly big repercussions for the business vision. For example, if a partner in the business has a major illness, then your plans to grow their area of business fastest in the year ahead would likely be ditched, in favour of consolidation.
It is exciting not just living in the six-month-to-a-year future like you are often required to as an employee, as long as you can swap around the “future-gazing hat” between all the stakeholders in the business, as it is probably harmful for one person to spend too much time in the future, as Marty McFly knew.
2/ Money Matters
Suddenly instead of highly creative people spending 99% of their time talking about creative things, a good 15% is spent talking about money, one way or another.
All of a sudden George Osbourne’s announcements really matter and liberal arts bias political stances may begin slipping, as you want what is best for your business.
There will be a sliding scale in business philosophies in any partnership. For example, between one who thinks paying staff a good salary and treating them well is financial incentive enough for them; and one who thinks you must spend as much as you can afford to make staff more rewarded at your agency than anywhere else.
This is human differences but in running a business, money and staff matter to keep the business alive and healthy, so constantly negotiating this sliding scale of attitudinal difference matters a lot.
It often comes down to small subtleties of motivation. Every partner in a business wants it to be strong and profitable; the discussions come over exactly how much profit, against how much reinvestment, against how much outgoing or salary levels.
You’d think that deciding how much to pay yourself would not be a really important business decision, but it is. Pay yourself too low, and you get an unrealistic sense of business profitability, too high too early and you destroy your own business.
A good financial director is worth their weight in gold – sometimes literally, but young businesses can’t always afford them in their early days.
If you can’t afford one, then teaching yourself to remember five numbers each week is key: Income, Expenditure, Net Profit, Forecast Income for the quarter ahead, Target Income for year, and Target Net Profit For Year. Seriously, off by heart.
3/ Vision Is Not Static
When you start a partnership you all agree on your shared creative and business vision.
And in marketing agencies it is likely to be something to do with coming up with amazing ideas, doing game-changing work and creating a business of value with a proven profit record and an impressive retained client list. Big generalisation, I know.
However, maintaining a vision in a partnership is like keeping romance alive in a marriage; it needs constant attention, demonstration and revisiting.
So what do you do if the vision begins changing over time between partners or if you are all agreed it has changed? Thrash it out and adapt, or die.
And this is the point: when you run a business, you will fight to the death to maintain the clarity of your vision to the outside world, but in a partnership you must be just as passionate for the sake of the business internally; but it is a marriage, not a battle.
So, joint business owners require a willingness to start and keep going with arguments (in a constructive way), setting aside any discomfort about conflict for the sake of the business. Businesses based on an apathetic, outdated or overlooked visions go into malaise.
Maintaining a meaning, purpose and financial vision for the business in a partnership requires a sense of obsession with, and self-questioning about, the vision by all of them … almost all of the time.
4/ Every Person’s Value Counts
One of the things I hated most working for some CEOs was the sense that they were looking at you as purely a money-making commodity for them – just one aspect of the whole. CEOs who see you holistically, such as one of my former bosses, Mike Mathieson, are rare.
Employees bring all sort of values to a company: energy, intelligence, contacts, experience, and can leave a positive legacy … that all adds to the bottom line, outside of directly generating new business or growing existing business.
In a young or lean business every employee must be kick-ass to justify their presence. So when you run such a business, an employee that isn’t kick-ass becomes an affront that you must either develop super-fast or cut your loses on super-fast.
So difficult conversations become crucial and, unfortunately, so too is being more ruthless than you might ever have needed to be as an employee.
As a head of department, you have the say on hiring or firing employees in your department, but you are not ultimately paying their salary. Running a company, you are.
The money you are paying them is vital for keeping the business alive, a small but substantial difference – it is your money, not just your budget.
Your employees are no longer for better or worse a reflection on the good or bad taste of someone in your agency, they are a reflection on YOU and the quality of YOUR business, at least while your are choosing to pay their salary.
Running a successful business is one of the most fulfilling experiences you may ever have. Running it with partners you believe in, admire and trust is a wonderful thing.
If you are thinking of taking a gamble and starting your own business, let me tell you: it is liberating. And if you secretly enjoy obsessing over the future, money, vision and people … it might just be for you.
My final piece of advice is “ask advice”. If you haven’t started a business before, there is no way you or indeed your business partners can have all the answers. So seek out the minds and opinions of those sages who have been there and done it, possibly numerous times.
I have found it an honour to run a business in partnership at Inkling so far, and am full of admiration for those who maintain exciting and growing businesses over many years.