Posted 07.24.2010 by Jack
Presented by Alex Urevick-Ackelsberg, Zivtech (12-person Drupal shop based in Philly)
Starting Out
- look to other existing shops to get insights into the business of selling Drupal
- Define the type of Drupal/web shop you are. Are you just a Drupal firm? Do you provide other services/products? What are you selling?
- Good to write up a mission statement, followed by a business plan - take the time to look at the market, the other players in the market, assess the cost and payout of the business
- Small Business Association - many resources that you can tap into when starting out, even just as a freelancer
- Cash flow is a tricky thing to handle; need to know how much money you need to get started. Do you need investors? Loans? Are you going to bootstrap it?
- Money comes in through accounts receivable; goes out through payroll, accounts payable, and taxes. Need to have it coming in faster than it's going out.
Partners
- Who are you looking to partner with? Why? Do you want to stop doing certain parts of the work? Does your shop need skills that you don't have?
- Define roles for each partner
- Split tasks and responsibilities up
- Keep partners accountable
- Seth - the perfect partner is someone who you don't agree with all the time, to be challenged
Management
- Remote vs office
- Being in the same room can help facilitate quick communication
- Managing teams of developers
- can be like herding cats
- if your shop sells hours
- who ends up being a project manager? is that a separate role or can other people take on that role in addition to development?
- Sometimes developers don't have good project management skills; sometimes it's based on scale and you just get to a size where it won't work
- Fixed bids vs retainers/hourly
- "If you want a good way to bankrupt your company, do a fixed bid."
- Zivtech either sells buckets of time (e.g. 100 hours to be used within a certain amount of time) or estimated costs (here's the top of what we think it's gonna cost, if it gets to where we think it's going to be 10% over that we come back and check in)
- push back from others in the audience (Liza, Seth) about fixed bids working if projects are managed well, clients not being willing to go for non-fixed bids
- Zivtech bills based on who's working on the project; different levels of skill
- Liza - can be important to have a client manager (not necessarily the same as the project manager)
- someone else in the room - gives clients deadlines for giving feedback
- Zivtech uses unfuddle for ticketing, time tracking, etc - has git and svn repositories
- suggestion: multiply the number of hours you think a task will take by three and you're more likely to be on target!
- Juggling more and longer term engagements
- Tricky to figure out how to juggle how many projects you're taking on at once
- A key thing is to overbook yourself
- Balancing contribution and business development with client work
- balance the non-billable hours well
- make sure you're charging enough to withstand the time that folks are doing non-billable work
- Drupal is something of a publish or perish business; you've got to put yourself out there, contribute to the community
- Outsourcing
- a more flexible way to pay people for work than payroll; accounts payable is "pay when you can" whereas payroll happens every two weeks no matter what
Sales and Marketing
- Sales cycles
- understand how long clients will take to make decisions, sign contracts, send initial deposit and later payments
- understand how clients' fiscal years work and how that will affect the work you're getting
- RFP, estimates, and proposals - understand how your internal cycle works
- MeetUps, Camps, Local community sites and conferences - good sources for new clients
- Contribute!!! in open source! Publish or Perish!
- Develop or claim modules in desired verticals (e.g. mapping, media, mobile, etc) - focus your contributions in the area you're trying to work with
Basic Roadblocks to Growth
- Cash flow is king!
- you can demand a certain amount up front from many clients, though some clients will tell you how they're going to pay; they generally ask for 40-50% up front
- Taxes
- Accounts Receivable/Collections
- gently but consistently remind clients to pay you
- make sure you get into your clients payment system ASAP - contact billing right away
- do regular billing, biweekly or monthly
- try to avoid being a hard-ass to collect; you're building relationships, so you want to communicate the need to pay as gently as possible
- Talent
- can be a huge impediment to Drupal shops
- you need to aggressively train smart people, not just expect to find all the highly-developed talent you need
Get Help!
- SCORE (Service Corp of Retired Executives), SBA, Business Schools
- some business schools have programs where they place interns with you for a period of time to assist you in the startup stage
- Collaborate with other shops
- Consultants email list
Questions
- is client acquisition a "hard marketing" expense? As in, something that can be written off?