Mod Note (Andy) - as the year comes to an end we're reposting the top discussions from 2015, this one ranks #40 and was originally posted 7/31/2015.
Thought some of you may enjoy reading this. For the last 1-2 years, I've been running an editing service as a side gig. I probably won't operate it for too much longer because my regular job takes too much time, but I thought there were some good takeaways from running it that I will definitely consider for any future business I start. After all, that is my end goal. I'd be happy to answer any questions!
For the past 1.5 years, I’ve run an editing service with a friend from Germany. Having studied abroad twice, I’ve had several international friends (non-native English) ask me to look over their papers for grammar mistakes, and they would usually compensate me with dinner or alcohol. Alcohol was the preferred payment, as Systembolaget (Sweden’s government-run liquor chain) was beyond expensive. When I returned home after the second stint abroad, I reconnected with a friend I had met abroad, and we decided that there might be a market for offering affordable editing services, as editing services are typically not within a student’s budget. At the time, most base prices started at $0.02/word, so you can do the math for a thesis/dissertation that is over 20,000 words. No student wants to spend their paycheck from their part-time job on this kind of service. We figured if we kept expenses low, we could charge low and become the “student-friendly editing service.” Here are the top seven things I learned about running a business:
#1. A lot of competition is never good.
This seems to be too obvious, but you don’t realize how true it is until you experience it first-hand. My partner and I figured there would be a market for us because we were charging less than half of what the competition charges (a typical price gouge). There are hundreds of thousands, if not millions, of students who could use a service like ours, and if we provide quality at an affordable price, we should easily gain market share, right? No. It’s not that easy. The robber barons of the 19th century had the right idea by avoiding competition like it’s the plague. Once we get customers, we have a decently high lead-to-sale ratio, but the problem for us was obtaining those leads. It’s not easy with thousands of contractors and businesses offering editing services. Google AdWords, once our primary advertising method, could cost as much as $20 per click. Yes, you read that correct. Now you know why Google is taking over the world. Your margins for a customer may be nice, but you have to spend a lot to bring them in. Changing our advertising methods and encouraging our customers to spread word by offering incentives proved more fruitful. More importantly, for any future businesses I consider starting, competition may be the foremost thought.
#2. No one cares about your business as much as you do.
You can offer all the opportunities, pay increases, and benefits you want to your employees, but they still won’t care about your business as much as you do. I always recall my dad scrutinizing his employees when they were not looking for something else to do (he owned a gas station, and he’d watch the employees sitting behind the counter with a magazine when they could be cleaning). I think I understand his frustration now. As a founder/owner, your business can never be perfect enough. For us, even though we only hire editors with master’s degrees in English, and I am in no position to judge their work based on that merit, I will sometimes find mistakes in their work. In reality, I shouldn’t expect their work to be perfect because we are all human, but there will always be that itch to be perfect. It bothers me. It’s unhealthy.
#3. Running a business will force you to develop traits and skills you never imagined you would have.
Being an entrepreneur is a crazy-good quality to have. An entrepreneur is willing to take risks to progress. When talking with my partner before starting, we always asked ourselves what would happen if we were sued for more than we are worth, what would happen if we go bankrupt, or what if there are some other claims against us. For us, the opportunities of starting a business always outweighed the risks; it is great experience, creates extra income (hopefully), and could create more future opportunities. Experience is a key trait in an entrepreneur. Before starting the business, I can say that I had worked in finance, but all my early career positions were oriented towards customer service. Operating for more than a year and a half now, I can say that in addition to the extra finance/accounting tasks the business created, I’ve also dealt a lot with marketing and management, but I’ve also picked up specific skills in e-commerce/SEO, learning international tax rules and marketing regulations, filing the necessary forms to start a business and prepare taxes, and so on. You put on a lot of different hats as an entrepreneur.
#4. Controversy is good marketing sometimes.
If you have never seen Nathan Fielder’s Nathan for You, I strongly suggest watching it. His marketing tactics are clearly intended to be absurd and comical, but I really think the guy knows his stuff. Two of his marketing schemes made national news, one of which was when he created a replica of Starbucks, called Dumb Starbucks (legal through a loophole in trademark law that allows for parody names). We experienced something similar by mistake. We posted a limited-time discount code in a university’s Facebook group, but we addressed the university with the wrong acronym – a simple mistake – but the students rallied and posted comments making fun of our error. It was somewhat a beautiful disaster, as that university’s students have placed more orders than any other university body. Obviously, not all controversy is good. I suppose luck is key sometimes.
#5. Customer service is king.
Before work each morning, I pass the Starbucks right by my office to go an extra 2-3 miles to another coffee shop. I have nothing against Starbucks; I think their coffee is good, but I don’t care for the customer service at that particular location. Customer service is the face of your business. It represents your business. My partner and I are the only ones to answer customer e-mails because we want to understand our customers’ needs. We are recommended more often for our customer service than for the affordable prices. Great customer service can also be helpful when you think things may go bad. For example, though we have never returned a customer’s order past their deadline (and pride ourselves for that), it has come close a few times. Simply reaching out to the customer and letting them know that our teams are taking a little extra time to ensure quality will go a long way.
#6. Plan.
Seasonality hurts. Going into this business, we knew it would be very seasonal around the end of semesters. However, neither of us could predict that sales would figuratively fall off a cliff at the end of August. There is a behavioral aspect to seeing sales continue to grow nicely, but you know sales should taper off eventually because of seasonality. Your head also tells you that things are going so well, so you keep marketing and other advertising expenses at a high budget. Then it happens, but you are late to adjust your budgets, and you incur a lot more costs because you failed to plan. Let’s just say that we will plan ahead this time and not let emotion overcome us.
#7. Not all competitors are enemies.
I had an unhealthy obsession with Google Analytics when we first started. Seeing competitors on your visitor list will sometimes strike a nerve - why are they visiting, what do they want, are they going to steal an idea, etc. We had an entrepreneur who ran her own editing service in Canada reach out to us because she had too many clients and too little capacity. We offered a finder’s fee, and we began doing business together. Things aren’t always as you suspect.
If you’ve ever run a business, I’d love to hear your takeaways from doing so. Every company and/or industry is a little different.
