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As a startup, it is hard to know how to prioritise your limited time and funds. Furthermore, while you know your core business inside-out, you are often tripped up by all the other things that come along with business ownership. Lumec is coming up to 4 years in business so we did some reflecting, and came up with 4 things we wish we had known when we started. We thought we would share them here, so those taking the plunge into small business ownership can make good decisions from the start.

1. Take time to develop your brand

One of the first things every startup needs is a name, which is integral to your brand. We came up with a name after a few days of bouncing ideas around with friends – ‘Resource Research and Strategy Consultants’. It was a mouthful, no one could remember it, there was a competing business in our space that had almost the same name, and the ‘resource’ was confusing us with human resources and environmental resources businesses. Bad, bad, bad.

Our advice: if you don’t come from a marketing background (like us) we strongly recommend budgeting for a professional to assist with brand development. Take time when choosing a company name and ask everyone you see what they think of your potential name. You are going to be saying your company name A LOT – you need to feel confident and proud of it. But developing a brand is much more than just a name and a logo. Our brand consultants took us through the essentials of who we are as a business, what makes us different and what drives us. It was a highly beneficial process. If you want to read more about our brand and journey check out our about section on our website.

Don’t forget to check that your name has an available URL for your website and to reserve the name on the CIPC (Companies and Intellectual Property Commission) website/portal.

2. Outsource support services

Similar to branding, we wish we had outsourced support services sooner, particularly, website development and accounting. We spent a lot of time learning WordPress and doing creative accounting and payroll in Excel in year one. This is a tricky one for a startup because whatever money is in the business is needed to keep the founders housed and fed for as long as possible while work becomes consistent. Furthermore, blindly handing over all bookkeeping in the beginning is not recommended – learning the basics is critical.

However, website development can be outsourced fairly cheaply and even one accounting consult can get you up to speed quickly on what accounting programme is recommended and what the basic legislated requirements are for a registered business (hint: they are significant and can have hefty fines attached). It is also worth meeting with an accountant even before registering the startup to figure out what type of entity to register and what this may mean for taxes down the line. Several accounting and web development firms specialise in small businesses, are understanding and have good rates. SARS also have some good resources that are free. As you grow, you should meet more regularly with the accountant and hand over more responsibilities to avoid stress meltdowns (of which we had many).

Note on points 1 and 2 above: Although registering your business is a hard-to-resist psychological step to small business ownership, it may be worth holding off until you actually have revenue. Part of us rushing the naming exercise was so that we could register the business and part of the accounting headache we experienced was because of registering the business too early. We see many startups falling into this trap. Registering a business does not mean you have a business, paying customers means you have a business. You can develop your brand and website, advertise yourself and get paying customers often all without being registered, especially as a consultant. As soon as you have income you can register and open a bank account within days.

3. Set up sound internal processes from the start

Only 2.5 years into Lumec did we start to collect meaningful data on how we were spending our time. We now use this data, amongst other things, to see exactly:

When we have exceeded our billable hours on a project and why,
If we are working enough billable hours to cover our monthly expenses,
If we are doing enough business development and staff development, and
If we are spending too much time on admin.

We use Clockify to measure our time, but there are other equally useful tools such as Toggl. There are several other monitoring tools that we have put in place from client queries to social media – the point is to determine your key metrics early and start tracking them from the start.

Another useful process was implementing Monday morning meetings where we discuss, divide and prioritise our tasks for the week, as well as provide feedback from the week before. Some businesses use Trello or Asana to manage tasks, but as a small business of just three, we find old fashioned to-do-lists work just fine for us.

4. Be smart about your recruitment

In our first couple of years we required ad hoc work to be done. We reached out to our own networks and to the local university for recommendations and we temporarily employed several people but no one had the particular skills we were after. This cost us time and money. Based on this experience, when we decided to recruit a full time staff member, we knew we needed to conduct a rigorous recruitment process.

Our processes included a job advert on employment sites leading to a google form which was used to shortlist candidates. We then asked for CVs from the shortlist which were used to further refine the list. We did personality tests, interviews and writing tests for the top 10 candidates and our final choice we interviewed a second time. This process took at least 2 months but it is one of the best ways we have spent our time in our four years. We wish we had used a more rigorous process for hiring even temporary staff right from year 1.

This blog is the first of a series of posts we will be sharing to assist the startup business. Look out for future posts on funding, business planning and others here and follow us on Facebook and LinkedIn (@lumecsa) to get other related updates and information.

‘Resource’s Director, Joanne, spoke at the latest Ten Minutes Club on being an economist and startup life. The Ten Minutes Club aims to share insights on different jobs and career paths. This is what Joanne had to say about being a Development Economist and starting Resource Consultants.

Economist??

In preparation for this evening, I asked a few of my friends what they thought economists do. One of my friends said they thought economists were men, in suits, who sit behind desks crunching numbers all day. Another said it sounds like something a rich person does, something to do with money. While I believe there are rich, male economists out there, I am not one. While I do spend a fair amount of my time behind my computer looking at data, I actually studied an arts degree, not a B.com. My majors were philosophy and economics, and my honours degree is in philosophy. This is important because economics is about numbers, money and business, but economics is also about ideas, ideals and the fundamentals of society.

Do you know where most economists in the USA work? In government, not on Wall Street. Economics is about understanding how things are and then planning how things will be and how things should be. It’s about people, it’s about healthcare, it’s about education, it’s about infrastructure planning. This type of economics, that deals with the upliftment of people, especially in developing economies, is called development economics. That is what I am, a development economist.

Being a Development Economist

As a consultant, I answer questions for clients that they either don’t have the data, skills or time to solve. The questions I am currently answering are:

What will the demand for property look like in the future in Durban?
What is the best way to promote innovation in Durban and what is the business plan to achieve this?
Finally, how feasible is it is to set up an institute within UKZN focusing on aviation related skills development?

I have answered a LOT of questions, on a LOT of different topics, for a LOT of different clients over the last 6 years. I love understanding how things work, exploring completely new areas of study, learning, problem solving and growing. In short, I love answering questions. If I had 10 hours I could stand here and tell you each one of those questions over six years, why they were interesting, what the answers showed and the people I worked with along the way. I remember them all. Lucky for you I only have ten minutes so I am going to tell you about just one my company did recently free of charge because we loved the concept. It was for the Durban X Fest.

Durban X Fest

X Fest is a surf, skate and bike festival held on the beachfront in July. It also brings in music and lifestyle elements. I love the alternative culture it represents and I love that it showcases our beachfront in such a positive way. My company volunteered to do an economic impact assessment for the three-day festival. Economic impact assessments are very standard things in my line of work. They weigh up the positive and negative economic impacts of an event or a development that has already occurred or will occur in the future.

To do this, we had to spend three days on the beach with surveys on our phones asking spectators questions like what drew them to the event and how much money they spent. We also did regular counts of how many people were at the festival. We then collated the data from the surveys into spreadsheets, which, when paired with the cost breakdown of the event, started to tell a story. This story sponsors can use to justify spending money on the festival in future years, hopefully ensuring that this event becomes a fixed event on Durban’s calendar. It also tells event organisers what their spectators liked and what they didn’t. It is precious data.

Open Data

Note that I didn’t mention anything that sounded like rocket science there, although I am sure that when I said ‘economic impact assessment’ your mind clouded over. I don’t believe what economists do is hard – I think anyone can do it. And, in fact, many people are starting to do it.

Journalists are starting to use data more and more to add to their stories. An entire movement has started around Open Data where techies are joining forces with creatives and social scientists to create evidence based stories and solutions for their communities. It is wonderful. Even Google Sheets, Google’s online version of Microsoft Excel, now allows you to ask questions in a spreadsheet and it spits out the answers – no economist necessary! I encourage anyone to get involved more with data. The things I know about my city, its people and its plans is one of the best parts of my job and it is so accessible. Check out Open Data Durban for more on this.

Founding Resource Consultants

One of the first things you learn in economics is ‘the invisible hand’. This is the concept that the economy is made up of individuals making decisions, the sum of which is results in an economy that works, as if there is an invisible hand controlling it. This is all good and well until a very visible hand or hands start to tinker and do things like exclude an entire segment of the population from the economy based on the colour of their skin, or invade entire countries based on the resources they have.

In these situations, the traditional approach of development economics, which says grow the economy and quality of life will follow, simply does not work. And I believe it is not working. A new approach is required. One that faces our current challenges head on. One that questions, even the questions that our clients are asking us to answer. This is what led me to found my company Resource Consultants, together with my friend and economist colleague, Paul Jones, earlier this year.

At Resource, we aim to provide analyses that are data driven and realistic and solutions that are both implementable and sustainable. This is our mission, but it isn’t going to be an easy or a smooth transition. There are a whole host of challenges that I won’t get into now with selling our approach to clients. At the moment, we are doing our best to gently tug them with each project in this new direction but it will take time. In the meanwhile, we make sure we are surrounded by people who keep us fixed to our ideals. Luckily, in Durban, we have lots of these good people.

You are as good as the people around you

In her brief Jenna encouraged us to share ‘our message’. Please note: now starts my message. You are as good as the people around you. From the very beginning when I was still flailing in unemployment, I had the guidance of the team from Open Data Durban. Together with Three Consulting and Ulwazi Consulting – we have formed the Durban Knowledge Collective. We do team learning every Friday where we teach each other new skills and bounce ideas off each other. My friend and photographer Derryn Schmidt took my head-shots free of charge. Cait of CopyCait edited all our write ups. You have no idea how far things like that go. I’ve used those pictures and that copy on every tender submitted, even for the event tonight.

Steve Jones built our website and developed our brand. Please visit our website just to see our logo – we love it. My first client was even a friend from school. A youth advocacy group called the Durban Global Shapers have brought me so much support and advice over the year. To this day I check in with the collective or the shapers on issues ranging from work I should or shouldn’t take, to time management, to when to take the next steps in the business. Obviously, there is also Paul, who seems to never worry where our next pay check is coming from and sleeps with spreadsheets under his pillow every night.

Listen closely when I say this, I would have failed in my startup if it weren’t for these people. To close, I would like to share five tips from their collective knowledge.

Five start-up tips

Get a branding person in early. Budget them into whatever your startup costs are going to be. Let them help you with your name, your domain, your logo, your website and your social media presence. FYI, you can do all of this while still in your day job;
Do all of this knowing that it won’t matter one bit – your clients are going to come from networking. Go out to as many events as possible. Our biggest client we met at a free conference the City put together;
Don’t spend money on an office if you don’t need to. Use co-working spaces. My favourites are the Green Door and the Smart Space – they cost R100 per day. And get yourself a portable Neotel landline. Paul and I do drivebys where we throw the phone through the car window at each other;
Don’t be in a rush to register your business and certainly don’t register your business in February (just before the tax year ends). Understand the difference between a company and sole prop. Do a survey of business banking rates before signing up to one. Also, SARS are actually pretty helpful.
Finally, babysit your gorgeous nephew, go to yoga, spend time with your family when they need you and go to Barcelona to be with the love of your life on holiday if you need to. Make time for the things you love because that is the beauty of owning your own time and not working for anyone else.

Startup advice: 4 things we wish we knew 4 years ago

The Ten Minutes Club: An Economist