A few weeks ago I contacted my few remaining clients telling them that I was closing my freelance business, Kelvin Quad: devised and set up over 2 years ago, it hasn’t worked, so it’s time to throw in the towel and think again.
The source of the Kelvin.
When I left my longtime job at the Cancer Research UK Formulation Unit in 2015, I had a number of encouraging conversations about going freelance. I’d never thought about becoming a start up businessman, but the idea grew on me. Friends and colleagues agreed that my ideas had merit, so after a few weeks of getting used to running the house and home, I registered as a ‘sole trader’, set up an account with the tax-man and bought the domain name. I was in business!
I had four great themes which I was hoping to develop:
1) Science: this would include activities like document and report writing, literature review, quality assurance and perhaps lab work. The idea here was pick up occasional work for organisations that needed someone to cover sick or maternity leave, or for a academic which had the tail-end of a grant they needed using up.
2) Scientists: this would include things like student and PhD mentoring, networking, manuscript review and teaching research skills. This would be similar to idea 1, but focused on the people rather than the process.
3) Engagement: science tours, street science and science demos in community centres or schools.
4) Community: this would be activities like networking, supporting non-UK students and multi-cultural teams. It was based on some of the work I was doing when I was in the University.
I like the name Kelvin Quad too…there was nothing close to it registered at companies house, the website was up for grabs. I live near (and often run along the banks of) the river Kelvin. It was from the river Kelvin that William Thomson, took his enoblement name, Lord Kelvin, hence these waters gave their name to the temperature scale and many other physical phenomena.
The course of the Kelvin
So, how did it go? In my first year of business I did just under 160 hours of work (that included setup, promotion etc) and got paid just under £7 per hour although over half of that was paid late so by the end of 2016 my earnings looked like £3/hr!. 2017 was lower on hours (45 hours), but initially looked better on rate (at £15 gross per hour): however by the time I’d paid tax (because I was now back in paid employment) and the NI bill from the previous year it was back to £3/hr again.
The Kelvin flows into the sea
Many of the initial ideas I had never really got going. They were good ideas, but I’m not sure whether they were good business ideas. In my old job I was paid to have novel, creative ideas; I wasn’t paid to make money from them. Looking back, I did the same when I started in business: I had great ideas – and I didn’t make money from them!
As I close the lid on the past two years I thought this might be a good time to reflect and learn some lessons from the failure of my wee business. In one of the classes I now co-ordinate in SIPBS, my colleagues teach different business tools. The two I want to use are the Business Model Canvas (BMC) and the (almost ubiquitous) SWOT analysis.
Business Model Canvas
The BMC has been around for 10 years and is a tool to help new startup businesses: can I use the BMC to understand what I should have known in 2016?
Key partners: I was a solo business, so my key partners were the individuals, or organisations, through which I could access clients or groups who were willing to pay for my services. On reflection I only had 1 or 2, and they would only occasionally find themselves speaking to someone who needed the sorts of services I could provide. With such sporadic access to paid work I really needed a bigger web of key partners.
Key activities: I thought I had those defined quite well as the four themes, but I didn’t have a true grasp on what I was actually going to do (and get paid for) within those broad categories. I hadn’t seen any other business with the same model I was proposing (either locally or anywhere else), so I had no template to work with, and no indication that anyone else, anywhere had made this kind of business a success. It was, for me, pioneering, and in that light failure doesn’t seem so bad! I’m honest with myself, I didn’t really understand what my customers needed, so I didn’t really start the business knowing how I could provide it! In the beginning I would often turn up at a meeting and have to think on my feet fast about what service I could actually offer. It took (unpaid) time to develop and define my remit.
Key resources: The key resource was really me and me alone, and that was one of the weaknesses and threats to my business model. I’ll consider this a bit more in the Weaknesses section of the SWOT analysis below.
Value propositions: Looking back I’m not sure I really understood what my customers were really looking for, in fact before I’d started I’d never really talked to a customer. I knew that my colleagues agreed there was a viable business in this area, and that that there was a ‘gap’, I’m just not sure now that it was a ‘gap in the (paying) market’, nor that the gap was big enough at a local level.
Customer relationship: How was I going to maintain a relationship with my customers? This was a tough one, because my channels were poor (see below) and often work was ‘one-off’ jobs rather than ongoing partnerships. I needed new customers all the time and didn’t have enough clients coming through my key partners to make it sustainable.
Customer segments: Who was my business model targeted at? Because I had a wide range of potential products, I had quite a wide range of potential customer types: from individuals (for tutoring and advising), up to schools, universities and even companies. However, that gave me a problem of ‘channels’.
Channels. I really didn’t know how to reach my new customer base. I thought I could use my old contacts (from my University job), but once I dropped off the grid for a while, those connections withered. I didn’t really think through how to make new connections to customer: just handing out business cards wasn’t going to get me very far. (There a post here that suggests business card hit rates are pretty low, but I can’t see where the quoted numbers come from and there’s nothing on Google Scholar.) I hadn’t worked out where would I meet my customers and how would I maintain my connection with them. And networking is not my strong suit: I can do it but it a ‘high energy’ activity for me. I also found that I didn’t really understand my ‘key activities’ with confidence, nor had I worked out my value propositions until quite late on in my business cycle.
Cost structure: I didn’t understand the full cost of providing a service (that would be promotion, costing, invoicing, record-keeping). £20 an hour sounds great. And هf there’s one invoice to raise after 8 hours work as a single block that’s brilliant. But if it’s only 1 hours work with travel to and from a venue, with records and invoices to be prepared after that, it eats into any earnings pretty quick.
Revenue streams: The pay-as-you-go was the model for what I was doing, but its unpredictable as a business proposition. I would find that ‘space’ in my schedule was reserved for clients who didn’t need it, or that time would need to be rearranged to deal with issues at short notice. It made it impossible to plan time, or predict payment.
Is there anyone left in the world that hasn’t seen or done a SWOT analysis?
As I wrote this post I felt that the BMC didn’t quite cover all my thoughts and so I included a SWOT analysis.
Strengths: face to face approach and the ability to discuss what a client needs from a piece of work.
Weakness: face to face takes time, especially if your not ‘based’ at a convenient location. Travelling to meeting didn’t take too much time, but you could find that it’d taken 2 1/2 hours out your schedule for a 1 hour meeting. The business is dependent on me and so couldn’t be scaled. I have broad range of skills, but it’s finite. If I think about my face-to-face tutoring and consultancy ideas: how many local individuals are there who need analytical and quality advice? Perhaps 20-50. So by building a model that was ‘real-line’, and not ‘on-line’ I’d restricted myself to a tiny base of individuals who I didn’t know, and didn’t have a plan for how to build links with.
Opportunities: There were lots: with the four different themes I was working on there was lots of potential, but I’m not sure that potential was really converted to opportunities leading to paid work.
Threats: I didn’t understand the threats as I started, especially in what became my main field of proof-reading. There are several online companies that will proof-read, correct and in some cases even write work for people to pass off as their own. I can’t really be in that market and maintain my ethics. When I started I decided to have a cheap exploratory rate (so I could get used to the work and attract a client base) of £20/hr, which which I’d hoped to increase as I built up the business, but the online companies were charging a similar rate so I was stuck with it. I’ve since been told that some online proof-reading companies require their reviewers to ‘prove’ themselves by reviewing a whole pile of work for free. So I can’t compete there either.
Its easy to see that the W&T are bigger than the S&O.
My freelance business failed, but I had a brilliant time earning £3/hr! I’ve learned a lot. I got me into teaching and education because I ended up being employed by my biggest client!
Kelvin Quad is still going: it’s just moved online!
BTW: I’m happy to discuss my experiences with anyone who might be taking the plunge and starting a wee business along the same lines themselves.