[tobinharris]

I run a small-ish dev shop ($1.5m revenue) and there are a lot of things I wish I knew back in 2012 when I started.

1. Finding clients is hard. Think hard about what an awesome customer looks like and then figure out how to reach them. This is the most important thing IMO. I'm reading Standout of Die, it has good advice on this.

2. First attempt, I started with about $40,000 and blew it all quickly as I didn't have enough sales. Better to get the sales first then grow the rest. You can be transparent about this with potential clients.

3. If your costs are $400,000 a year, and you'll sell 44 weeks of the year allowing for holidays, sickness and wiggle room, then you need to sell $9,000 a week to stay in business. If you want to make 25% profit then you'll need to sell closer to $500,000 a year and $11.3k a week.

4. I'm in the UK, we pay someone to politely chase clients for payment. This was a game changer. Most agreed to pay monthly but never do without a good bit of nudging.

5. As for tips... There are so many good books and courses on building and running a service business, I wish they'd been there when I started. To name a few.

- Jonathan Stark.com - Hourly Billing is Nuts

- Gareth Healey - Standout or Die

- Jason Swenk - Agency Playbook

- Blair Enns - The Win Without Pitching Manifesto

- Blair Enns - Pricing Creativity

- Traction - Gino Wickman

Running a dev shop can be incredibly rewarding and fun, especially if you love the work you're doing. Building a business will be like learning a whole new career, so don't underestimate the learning curve the number of mistakes you can make (if you're like me haha). It's great that you're asking for advice, it will save you some headaches :)

[greatpostman]

Mind if I ask how much profit you make from that revenue? What’s the margins like when running a small dev team?

[tobinharris]

Not at all, we just finished our financial year and it was 14% operating profit.

The previous year was 29%, but last year was lower as I made some expensive decisions during the COVID period. Basically, I grabbed all the revenue opportunities I could without too much concern for profit

[anyfactor]

Would love to know that as well. I have worked with few agencies as a contractor. From what I heard it is very hard to have a decent margin doing software dev work unless you have offshore subcontractor connections or an offshore office. When you have a downturn it could be brutal with an onshore team.

[Ant_on_]

tobinharris thank you so much for your great comment and advice! I imagine it is very hard managing such a large agency. I'll take your advice into account when starting.