Finding a competitive edge (incorporation, credit, sales, CPA)

[ellie]

I'm preparing myself to get laid off from my current place of employment, which I like a lot. We're a mid-sized engineering based firm that has been affected by the downturn in the construction industry. I'm not an engineer but work in an allied field, landscape architecture.

I've noticed that as a fairly large company we carry an tremendous amount of overhead. We also charge out the wazoo for the services we provide. I'm frequently aghast, but that's my old-school bohemian nature.

So I'm considering the pros and cons of starting a smaller, bare-bones firm that can provide the same services my division currently provides, but providing them at a lower cost (since we'll have less overhead, in theory). We'd also be able to market ourselves to all of the local engineering firms who may or may not be willing to carry a team of landscape architects. (my guess is that my whole team will be cut from our office)

I have a likely business partner who has more years of experience in the field than I do. We both can afford to contribute financially to the start up, though not tons of money. I even have a PE in mind to team with in the event we can pick up work from architects. We may only take on small, easily managed projects. I believe there are still small pieces of work to do that larger firms cannot afford to do.

There are probably glaring gaps in my business concept. So I'd like to hear your input, if you have any advice. Once I get a real business plan together, I'll go for free business training with SBA or SCORE. But now, this idea is in the formative stage.

[cpg35223]

Originally Posted by ellie

I'm preparing myself to get laid off from my current place of employment, which I like a lot. We're a mid-sized engineering based firm that has been affected by the downturn in the construction industry. I'm not an engineer but work in an allied field, landscape architecture.

I've noticed that as a fairly large company we carry an tremendous amount of overhead. We also charge out the wazoo for the services we provide. I'm frequently aghast, but that's my old-school bohemian nature.

So I'm considering the pros and cons of starting a smaller, bare-bones firm that can provide the same services my division currently provides, but providing them at a lower cost (since we'll have less overhead, in theory). We'd also be able to market ourselves to all of the local engineering firms who may or may not be willing to carry a team of landscape architects. (my guess is that my whole team will be cut from our office)

I have a likely business partner who has more years of experience in the field than I do. We both can afford to contribute financially to the start up, though not tons of money. I even have a PE in mind to team with in the event we can pick up work from architects. We may only take on small, easily managed projects. I believe there are still small pieces of work to do that larger firms cannot afford to do.

There are probably glaring gaps in my business concept. So I'd like to hear your input, if you have any advice. Once I get a real business plan together, I'll go for free business training with SBA or SCORE. But now, this idea is in the formative stage.

Hi, Ellie. I'm a marketing guy, so here's what I would offer when it comes to branding yourself.

First, while you certainly want to avoid being the high-dollar provider, being the low-price provider is not the way to go either. The perverse nature of clients is that the low-price vender is typically suspect in their eyes. And the client who hires you based on price will make every meeting, every project a miserable slog where you have to justify every penny.

Instead, rather than go after a price positioning, you really need to define yourself by a value positioning. That's the difference between saying, "Hey, look how little we cost," and saying, "Look at what you get for your money." Yes, it may sound like nuance, but it matters a lot.

Second, you really need to think in terms of what your clients dislike, aside from costs, about firms like yours. Is it the slow response time? Is it poor client management skills? See what's typical in your business and set out to be different.

That's because the last thing you want to do is be just another provider in an already crowded market. So if everybody else tacks their names up on the door, then choose a more conceptual name. If everybody else takes a month to get a proposal to the client, stake your claim on faster, more substantive response. In short, give a reason for customers to break out of the typical buying pattern by offering substantive benefits. Talk about them, not about you.

Third, given the prolonged sales cycle in businesses such as yours, you really need to be testing the waters now. That means you need to have your organization, your web site, your stationery, and your call list together NOW. Do you have a non-compete, or non-circumvention agreement in place with your current employer? I certainly do not recommend poaching your current employers client list, but several may be looking elsewhere anyway. If they choose to sever relationships with your current employer after you leave, then they're fair game in my eyes.

Good luck. And get cracking. There's a lot more to starting a business than you realize. And, if you were indeed laid off on a Friday, you want to hit the ground running as a viable business on Monday, rather than squander 2-3 weeks just trying to get yourself established.

[suuzum]

are you in savannah? if so you are right - most arch/eng. firms contract out landscape design. off the top of my head... i can not think of any landscape arch firms in savannah. i guess most architects work with civil engineers. you are so lucky to have a partner and the capital to get started. that is great...! do you have your LEED cert yet? savannah designers are big on sustainability... i think it would give you the edge to have this certification. esp for companies who are active members of the USGBC...

sorry to hear about your firms layoffs. best of luck.

[ellie]

There's a lot to answer here. I suspect that I may have as long as a month before they'll cut me.

There's not much to poach from my current employer's client list that we'd want to take. No non-compete contract to worry about. I'm getting more involved with my professional organization, ASLA, so I'm making friends and finding mentors. I'm not a cut-throat kind of gal, so I'd like to find the right niche where we can fit without too much overlap.

Lists. That's an excellent idea.

I've been learning a lot about marketing. Our current marketing director has been training me well. All I've done for months is write proposals. Also have been trying to grow my personal networking skills and learning how to meet with potential clients and build relationships. It takes big cohones. LOL

You're absolutely right about trying to figure out the likes and dislikes of potential and former clients. I'll put that on my list. And it is all about them. That's often hard to remember...

I had a garden maintenance business for many years. Got burned out and went back to school. Still have a reasonable number of good people who would like to have me back if I wanted to do that again, which I don't. At least not in the same way. My old gig was very low tech and cobbled together. It's amazing that I did it for so long.

Worst case scenario, I don't mind doing something completely unrelated to make ends meet while I build a new business. I also don't want to get started too soon and lead my potential partner along the merry path while I wait to get laid off. We've discussed this idea for over a year in an informal way.

So now's the time, I guess. Branding, stationary, cards, and a list of must haves that will not make us top heavy before we get a cash flow. Biggest mistake I see new businesses make, is spending too much up front.

And the nuance of quality and added value by not underpricing ourselves. Excellent points. Thank you.

[ellie]

Originally Posted by suuzum

are you in savannah? if so you are right - most arch/eng. firms contract out landscape design. off the top of my head... i can not think of any landscape arch firms in savannah. i guess most architects work with civil engineers. you are so lucky to have a partner and the capital to get started. that is great...! do you have your LEED cert yet? savannah designers are big on sustainability... i think it would give you the edge to have this certification. esp for companies who are active members of the USGBC...

sorry to hear about your firms layoffs. best of luck.

There are a few good firms, but not many. And yes, I am LEED accredited. I'm also a regular at USGBC meetings.

I'm hoping that my fear of getting laid off is just paranoia; but I'm not taking any chances. I like the place I work and don't particularly want to be on my own right now.

In a small town like ours, you don't want to burn bridges or make enemies. A number of new LA's have moved to town in the past few months. I'm hoping that the fact that they are not really locals will play in my favor.

It's the nuts and bolts business organization that will be a challenge. I'm also going to bite the bullet and start learning business accounting as soon as possible.

[cpg35223]

Originally Posted by ellie

There's a lot to answer here. I suspect that I may have as long as a month before they'll cut me.

There's not much to poach from my current employer's client list that we'd want to take. No non-compete contract to worry about. I'm getting more involved with my professional organization, ASLA, so I'm making friends and finding mentors. I'm not a cut-throat kind of gal, so I'd like to find the right niche where we can fit without too much overlap.

Lists. That's an excellent idea.

I've been learning a lot about marketing. Our current marketing director has been training me well. All I've done for months is write proposals. Also have been trying to grow my personal networking skills and learning how to meet with potential clients and build relationships. It takes big cohones. LOL

You're absolutely right about trying to figure out the likes and dislikes of potential and former clients. I'll put that on my list. And it is all about them. That's often hard to remember...

I had a garden maintenance business for many years. Got burned out and went back to school. Still have a reasonable number of good people who would like to have me back if I wanted to do that again, which I don't. At least not in the same way. My old gig was very low tech and cobbled together. It's amazing that I did it for so long.

Worst case scenario, I don't mind doing something completely unrelated to make ends meet while I build a new business. I also don't want to get started too soon and lead my potential partner along the merry path while I wait to get laid off. We've discussed this idea for over a year in an informal way.

So now's the time, I guess. Branding, stationary, cards, and a list of must haves that will not make us top heavy before we get a cash flow. Biggest mistake I see new businesses make, is spending too much up front.

And the nuance of quality and added value by not underpricing ourselves. Excellent points. Thank you.

Here's one other thing I would offer up...go ahead and find a proposal format you like so you're not reinventing the wheel. Heck, throw a bunch of stuff you like on a CD on Monday and take it home with you. Go to the office library and pull down any binders on the business of your business and photocopy as much as you can. Have your logo and stationery ready, along with biz cards. Put up a rudimentary web site. A lot of these turnkey sites do an okay job.

As far as your old client list is concerned, that's low-hanging fruit. Anything you can grab immediately after leaving your current situation will help your cash flow (The economy is tough after all, and money is money). In fact, I would probably go ahead and call them now just to re-establish contact. Don't tip your hand on what's going on. Just get them thinking about you again. And network like a crazy person.

[harry chickpea]

"It's the nuts and bolts business organization that will be a challenge. I'm also going to bite the bullet and start learning business accounting as soon as possible."

Do yourself a HUGE favor and hire a competent CPA to help you get started. You'll find the benefits of incorporation may be better than you imagine. Also, use a standardized integrated accounting software package like Quicken or Peachtree. It'll save a lot of headaches. Good luck.