What I learned owning an agency

In the Winter of 2003 two friends and I made a very huge business decision. We were going to start our own Interactive and video production agency. The players included myself, a writer by trade. Todd Grabe, a film and digital video editor. And Kris Yahner, a web developer. Our goal was to seemlessly implement these skills into a smoothly oiled, full service interactive shop.

Together we put together a 30 page business plan, complete with creative and financial goals. We decided holistically that we would run the agency lean, meaning that we weren't going to invest a large dollar amount into new equipment and office space. We found a great little office in the Grain Belt building in Northeast Minenapolis. 800 sqare feet for $500 a month. Prices that would be nearly impossible to find now.

Our first client was a realtor in Northern Minnesota. I think we charged $3000 for a website, complete with an MLA (home for sale database). That wasn't nearly enough.

What we didn't know? How to find new business, and how to bill our clients realistically for the work we were doing for them. Through trial and error we inconsistently would aquire new business, but more often than not it was because we were the lowest bidder. We surely hadn't figured out how to bill our individual talents. For instance, Todd's skills as a post-production editor weren't successfully billed until we had a video project for United Children's Hospital, our first big client. Furthermore, we found it more and more difficult to truly create holistic work for our clients. What were the other partners going to do when Kris was creating a back-end shopping cart project? More often than not we searched for new business to mixed and even laughable results.

Little did we know, but we were competing with many local agencies for some of the work we were bidding on. We had the talent and the knack for great ideas, but we lacked the business accumen to win such business. I take a lot of that personally, as I thought at the time that I had the ability to be both a salesman and a creative. I'm a horrible salesman.

I look back at this experience with a lot of "if I had only known then, what I know now". There is a ton of regret with my first attempt at starting a business. I learned a lot the hard way, and that came at the expense of our investor's dollars for the most part.