There are plenty of books about creating a company, but they don't begin to prepare you for the realities of starting one, particularly a design enterprise. When Luce Group [pronounced: loo-chay] was founded in 1997 — partners Charles Cameron, Frank DenDanto III, Lauren Helpern, and Traci Klainer set it up as an ad-hoc collective — we needed to consider how we would operate in the corporate world. Instead of individual freelancers, we were assuming a commercial group identity.
This new venture would be a far cry from the looser, show-to-show routine we had as theatrical set and lighting designers, careers each of us have thrived on and maintained for over ten years. So far so good. We now have a roster of clients that includes The Nantucket Whaling Museum, NYC2012, MTV, and the Loire Valley Wine Bureau, and are well on our way. But we are constantly learning and refining how to be successful as a business.
COMMITMENT CANNOT BE OVERSTATED
The more you put into your company, the more you set the foundation for the future. Luce Group started with a great idea for this era of experiential attractions and events: take our similar yet diverse design backgrounds and package them together. By creating a team, we could pursue projects that did not fit into a traditional mold. By creating a company, we could have the profile and credibility of a corporation and reduce our personal risk.
Though we started Luce as a sideline to our particular specialties, we quickly realized that it could grow into something remarkable and still enable us to maintain our theatrical careers. We are constantly determining how to balance the “I” of each partner with the “We” of Luce Group, since it is that balance — the different facets of our lives influencing each other — that makes the company special.
Working together to develop a design firm, or any business for that matter, requires a great deal of trust and respect for your partners, as well as a common approach. In our case we all attended the MFA design program at NYU's Tisch School of the Arts, which gave us some commonality of work style and ethic. In the time since grad school, we had each gone down our own path — toward architecture, museums, theatre, graphics, etc. We wanted to synergize these experiences to provide unique, thoughtful and complete design solutions for each of our clients, be it an exhibition or a big charity event.
THE NUTS AND BOLTS
Our first question was what kind of company should it be? There are several different types and each has it advantages and disadvantages. We opted to be a limited liability corporation, or LLC. We are still discussing whether to become a WBE (if applicable, it is worth considering the process of becoming a woman or minority owned business).
Making these determinations required research and thorough discussions with professional consultants (lawyer and/or accountant). Doing your own research or paying for the advice of a consultant is a constant consideration with a start-up when money is tight. Consultants can be expensive, but they can save time and provide insights that are only learned through experience. Even if you forego advice sessions, you will most likely want them to review and file paperwork to make sure the documents you have produced are correct.
All young professionals should look for mentors, professionals in related fields who are more experienced and willing to share their knowledge. We are fortunate to have several; they have been invaluable with their advice, as sounding boards and, in some respects, as disciplinarians. If people are offering you their time, you owe them the respect of completing the tasks they give you in the time allotted. It helps them help you.
Our next task was to create an operation agreement, basically the foundation for how you are going to function as a business. There needs to be a framework that is thoroughly thought out but malleable. Cover as many of the “what ifs” as you can, especially the bad scenarios, no matter how silly or remote they might seem (i.e., How do we vote someone off the island?).
From books and other business owners, we have garnered that it is much easier to set up a system for dealing with difficult issues while everyone is still on good terms rather than trying to sort things out in the middle of a dispute. Our multi-person agreement determines how decisions are made and how many people need to agree.
Compensation is by far the most volatile issue: How are partners paid both for project time and for time spent on the operation and marketing of the company? How much of a project fee goes toward the overhead of the company? How will the profits be split up? Will the profits be paid out? How much spending discretion does any one partner have? You may be friends, but you are setting up a business.
START UP COSTS
Don't underestimate the amount of time and money it takes to get a business up on its feet. Since most young designers do not have a war chest, they have to determine creative ways to get cash flow (loans, credit cards, etc.) and where it is best spent. At times we still feel like all our money is going in one direction: out. There are so many start-up costs: office space or a designated mailing address, computers, phone and fax service, consultants, graphics (letterhead, business cards, marketing materials, etc.), and a website, to name a few.
There are hidden costs in everything. For instance, another necessity for a firm providing a service in the corporate world is insurance. For some jobs you will not be hired without it. There are two types that apply to our field: general liability and professional liability. General liability covers anything (accidents, injuries, etc.) that can possibly happen related to your business or place of business. Professional liability covers any situation that comes from your acts, errors, or omissions in the course of rendering your service. Since 9/11, general liability insurance for a business in NYC has become extremely expensive, if you can even find an insurer willing to write a new policy.
PERPETUAL MARKETING
Once you have your corporate entity, you have to get the jobs. It didn't take us long to find that the need to market is constant, whether we are doing it in broad strokes or to a single target. As well as defining a vision for Luce Group, we had to figure out how to identify prospective clients and partners and then convey our qualifications.
There are many ways to connect with the people and institutions you want to work with and the more creative you are, the more success you will have. There are the necessary basics — a website, business cards (always have them with you: better in their hands than in your pocket), and a brochure. We developed a purely pictorial portfolio five years into the company to help guide discussions and interviews.
Since we operate in a number of different fields, we tailor our brochure to the prospective client. We have created one that is modular so we can mix and match the project pages, a cost-effective solution for a focused campaign. It also enables us to include our personal background materials within the context of the company. Since we are a young organization, work we have done on our own or at other firms can be an important part of marketing the company since it confirms a track record, and we are always careful to acknowledge this relationship.
Our website is similarly set up to reflect this spread of expertise: categories of different project types help the visitor navigate through the site. We have also made a concerted effort to get our projects into magazines (including this one), which gives our clients and us greater visibility. And you have to network, network, network.
FACE-TIME IS IMPORTANT
We grapple with these and other issues all the time. The Luce partners meet weekly to discuss operations and get a report on all current projects. We distribute action minutes, so we know what we need to accomplish across the week and each person is clear on what she or he is accountable. Not only does this process give us the opportunity to reinforce and refine the shared vision, it motivates us to focus on achieving tasks and deal with any issues that have come up.
Collaboration? There's nothing like the potential of having to say to your partners that you didn't get done what you said you would to nudge you along. Our 3-C policy of “Collaborate, Challenge, and Cross-check” also pushes each of us to design at the highest level and to learn from one another. And each of us has assumed the responsibility to seek out knowledge and resources, mutual support that adds to our collaboration.
In our annual strategic meeting, which we stipulated in our partnership agreement, we focus on all aspects of the company. It is an opportunity to look back and evaluate the past year and redefine our goals for the future. This includes the quantitative elements such as financial performance and the qualitative elements of our satisfaction with the quality of work. So far, we're excited by the growth and the potential.
DREAMING BIG
After all the uncompensated hours of work and the phone calls to prospective clients that go nowhere, why do we keep on devoting the time and effort? Because our partnership allows us to dream big while providing the framework and support of an organization. We get to contribute our talents to innovative projects that will teach and entertain. We get to work in many different fields, each experience informing the next and changing the way we look at any given assignment. With each day we set our goals higher and further into the future.
Visit www.lucegroup.com for more information.