14 Lessons We Learned From Starting an Incorporated Partnership
Eight months in from launching our business, and we’ve picked up a handful of lessons that we're quick to share with anyone thinking of making the move to either partnership, incorporation, or both. Here are 14 of them, in no particular order:
1. Some short term losses are worth the long term gain
We cut our incomes in half for this first year while getting the new business off the ground. Our goal has been to pay ourselves and our contractors consistently. It worked, and we’ve been profitable every month. By next year we’ll be making dividends that bump us up to our old pay—and the year after that, it’s on track to double again.
2. Partners lighten the load (but add to it in other ways)
Starting a business—especially one that’s intentionally culture-driven—is a lot of work up front. It’s amazing to split up roles like overseeing brand formation, accounting, marketing, and business development. But there’s a lot of additional emotional work as you each find your place, settle into roles and learn to share information. Don’t underestimate the time it takes to make joint decisions.
3. Shareholders’ agreements are gold
We joke that we are wives—and it’s true that we're more bound to each other financially than we'll ever be to another human. There’s lots to be said for putting your commitment on paper and making it legal. There will always be issues and it forces you to work through them. It also gives a framework for decisions and long-term perspective. (A few legal fees up front are worth it in the long run.)
4. Define the soft stuff too
Six months before we incorporated, we created a set of seven guiding principles that define how we operate with one another and with our clients. It mattered that we shaped our culture from day one. We use these principles to guide decisions, to assess cultural fit of clients and contractors—every conclusion is black and white when we hold questions up against those principles.
5. Corporate bookkeeping takes more effort
GST remittances, income tax remittances, payroll, tracking expenses for multiple people—finances instantly got more complicated. When we each worked on our own we just tracked our expenses and set aside money for taxes. Now there is more to stay on top of and more to mess up. For us that meant 1/4 of one person’s time devoted to it, paying an expert to get us set up, and eventually hiring an admin to help us stay on top of it. Speaking of which…
6. Paying for expertise is always worthwhile...
Be it graphic design, bookkeeping, or web development, it has consistently been worthwhile to pay for expertise. I know how much my time is worth and it costs far less to pay an expert for an hour than for me to fumble through the same task for three or four hours. A simple cost-benefit analysis makes the decision to call in backup a simple one.
7. …So is paying for office space
Since moving into our own space, we’ve seen that just having a physical address adds trusts and boosts validity in clients’ eyes. Collaboration is smoother and we deal with issues right away. We love hosting weekly happy hours. But on a personal level, there’s a clear separation between work and rest. Home is a sanctuary once again—and our kitchen tables are no longer our desks.
8. Processes and systems take time
Give yourself some grace while you get things set up, and expect to bill fewer hours for a little while as you get your systems in place. It’s okay to pause now to lay a better foundation for future growth.
9. Say yes to everything for a bit, then start saying no, unapologetically
You should always have at least half a dozen things on your to-do list. We give a realistic delivery date, and keep a good roster of trusted subcontractors on-hand. We firmly believe in always feeling 15% overwhelmed—it means our plate will always be full.
But now that we are consistently booked 4–6 weeks out, we raised our rates and it enabled us to be more selective. If a project isn’t a fit, if a client isn’t a fit, or if we know we can’t deliver to a tight deadline, we say no and it feels great.
10. Celebrate often
Create a culture that acknowledges wins: when we land a project over a certain price threshold, when we reach a new profit milestone, when we get great feedback from a famously tough client, we don’t hesitate to pop some bubbly or cut out at 4:30 for celebratory tacos. It means even during tough weeks we have happy moments of connection.
11. Even celebrate your f*ck ups
This is actually a lesson we learned from the fine team at Trout + Taylor. Words of Winedom came directly from their weekly “Wine and Wisdom” tradition of sharing what they’ve learned from their mistakes and failures each week. They keep a list of lessons—mistakes they’re unlikely to make again, and they drink to those learnings.
12. Put someone in charge of the plants
All of our plants died in our first six months. We all sort of assumed someone else was on it. They weren’t. With plants and any number of other small things, assign clear ownership. (Big thanks to our admin Francesca for bringing them back to life.)
13. Make friends everywhere
This is advice for absolutely anyone considering self-employment. Introduce yourself, take time with people, have coffees, have lunches. Make people your number one priority, even when you have deadlines. On a recent Tuesday afternoon Amanda worked from a local cafe and ran into four former colleagues—two of them mentioned potential projects they have coming down the line, another suggested a coffee. Showing your face is always worthwhile.
14. Refill your cup
Read books, look at art, do yoga, go to conferences. Take time to look at what others are doing—for inspiration, but also to see what you should aspire to, or to discover you’re doing just fine. As a team we went to SXSW earlier this year. It was a big discretionary expense, but besides filling our heads with big ideas, we got a glimpse at the type of agency we want to grow into and heard from experts in our area who confirmed we’re right on track.
In six months, we'll look back on this list and have another 50 lessons to add. As your company grows, so will your learnings. Make note of them, celebrate them, and apply them as you move forward. Some of these lessons were hard earned, but they are lessons we wouldn’t trade.