The sale of a business usually delivers a welcome “capital event” for the founders who have often risked all and had many sleepless nights along the way. But in my experience, it also delivers a crushing blow to the entrepreneurial spirit – something that hasn’t prevented me from launching a second company.
Staring down the barrel of years of endless “me too” marketing is no fun! But unlike the first time we started our previous agency, my business partner and I are much more conscious of using our time wisely. Just over a year after the sale of our business, we resigned from our new, less than rewarding roles and set about launching a second company. Our personal motivation was whether we could “do it again” and make a new business as successful as our old one.
Against a backdrop of popular wisdom that said, “you must be mad to launch a second business”, in August 2013 we formed Once Upon a Time. And yes, popular wisdom is partially right, it’s bloody hard work. But sometimes not for the more obvious reasons.
Starting a new agency is high-risk, scary and there are lots of unknowns. So, it’s crucial to have co-founders, interested backers and advisers help you establish a workable plan. We were fortunate enough to have a ball-breaking corporate financier as our non-executive and an ex-client as a founding director, who were willing to stick with us and invest through the ups and downs.
You absolutely need grown-ups, preferably with some previous battle scars, around to support you. Anyone who jumps on-board a startup because they think it’s the thing to do, but isn’t prepared to stump up cash and take risks, won’t last the course.
The fact is that it’s not as easy launching a second company. Current strong procurement practices mean it’s nearly impossible to begin an agency with a friendly “founding” client. Starter clients willing to give you a go, and take a massive leap of faith on your delivery, are now few and far between.
Moreover, depending on the type of business you are building, it can be easier to launch a division or diversion agency of an established name that can offer some structure in terms of a back office and trading history. These days, banks and landlords won’t take a risk without you stumping up massive personal guarantees or the cash up front.
The alternative to the painfully slow organic build is to look for an acquisition whilst running a small team. We looked hard for months for an agency with strong skills in an area that we could add our skills to. The world is not currently awash with independents and you need an element of scale to do business these days.
The key lesson is that you should sort out your strategy from the get-go. Everyone needs an identity and a brand that the founders have created, and love, provides a unifying purpose from the moment the URLs are registered and your Company Registration Certificate arrives through the door.
With all this planning and strategising, be prepared to feel itinerant. Don’t underestimate the sometimes-depressing feeling of being rootless and lacking a well-formed routine. Coffee bars stand in for a third space – a refuge from home and from your temporary work space.
Lastly, always remember that the new gig is a new gig, and it won’t work for a lot of your old colleagues. For starters, you are starting over and you can’t play the same role that you did before – everyone must muck in. It’s tempting to surround yourself with the devil you know, but it’s key to have a mix of old and new blood.
Diane Charlton is COO and founder of Once Upon A Time