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David Salter, founder and director of the boutique translation company Linguistico, talks about his journey from solicitor to business owner.

 

There is probably never a good time to start a business. Will you ever truly be financially prepared? Will the economic climate ever really be stable enough for a new business?

 

But thinking things through carefully, even before you hand in your notice, can help minimise the risks.

 

Financial challenges

 

“I started researching my business in mid-2007 and began trading in early 2008. At that time people thought that giving up legal practice to start a business was a ridiculous and hugely risky idea.”

 

But if you’ve done your research and prepared yourself financially, why wait?

 

“I had done my research and knew that certain areas of the legal and insurance industries were fairly recession-proof. Companies that had previously employed full-time translators were looking to outsource that work following redundancies and in-house counsel were looking to reduce costs and would be looking to reduce their translation spend at the law firms. So really it was an ideal time.”

 

Personal sacrifices

 

Still, in order to give Linguistico all the financial help it could get, David decided not to draw a salary for the first nine months.

 

“Cash flow is always very difficult for a new business to manage, but this is especially so when your clients are law firms. Law firms tend to bill their clients monthly which could be several weeks after receiving your invoice, then allow their clients a month to pay. Having been a lawyer myself, I understood this so made sure the business financially prepared for delayed payments.”

 

Financial sacrifice is a harsh reality most new business owners have to face. In the beginning most ex-lawyers starting a business will probably experience a drop in salary and the business will undoubtedly have more outgoings than income.

 

“I did find the drop in salary difficult initially. But you have to put the sacrifice into perspective. A lawyer may lose their steady income when they hand in their notice, but they will gain freedom, flexibility, the ability to control their future and, if they focus on the positives and are driven by a desire to earn the same or more than they were on before, they will soon find themselves back on the same wage as before. After moving on, many people find they are not actually driven by money at all and that the newly found free time and pride in their job far outweigh any reduction in salary.”

 

Keeping costs low

 

“Besides, you can ease that initial burden with careful financial planning. You should never just hand in your notice and leave. You have to think things through carefully, and not just because you need to save up a buffer to cover rent, insurance, IT systems, etc. It’s important to learn about debt ”

 

“Once I had made up my mind to start Linguistico, I moved to a smaller unit and cut my expenditure until the business got established. Thankfully I didn’t need to cut out too much because I was always more of a go for a surf and barbeque-on-the-beach person than a frequent guest at the Hyatt!”

 

Finding ways to keep your business costs low, especially in the first few years, can help. Do you really need an office or could you work from home? If shop frontage is key to your business, do you really need extra storage space at the back? At the same time, do you have enough space to grow the business? If you need letterhead, could you design it yourself rather than hire a graphic designer?

 

“It’s amazing what friends will do when they discover you’re setting up a new business. One of my friends designed business cards for me, another friend designed our first website.”

 

Simply knowing the financial challenges ahead, or seeking relevant advice, will help. Do you know when you’ll need to make super contributions or contact the tax office (most businesses have to submit quarterly activity statements), what receipts should you keep and how do you invoice clients correctly?

 

“For the first six to nine months of the business, I tried doing all the accounting myself, but this was a huge mistake. Someone coming from an accounts background might be able to handle the accounts more easily. But for me, dealing with different currencies, foreign exchange brokers and other international payment methods… I needed to employ someone happier with numbers than myself. You have to know your limits and know when to get outside help.”

 

Breaking free

 

Starting your own business is a huge commitment, both for the lawyer giving up their livelihood and their families.

 

“But I have no regrets,” says David. “I still use all the skills I learnt from legal practice, in fact there’s no way I could have set up the business without them.”

 

“I guess, at first, I might have missed the income and security of being a lawyer, but not anymore. Compared to the huge amounts of happiness I get from running my own business, new skills, loads more free time, a steady and flexible income and a lot more satisfaction, I no longer wonder whether this was the right thing to do. ”

David Salter, founder and director of the boutique translation company Linguistico, talks about his journey from solicitor to business owner.

 

As any successful business owner will tell you, providing great client service is the best promotion for the business itself. Whilst the power of the press cannot be underestimated, word-of-mouth can be a far more productive marketing tool than advertising in magazines, television or radio.

 

If your clients enjoyed working with you as a lawyer, some of them may even be interested in supporting you in your new venture.

 

What’s in a name?

 

Having a solid business name can help too, as not only will it help create your business image, it will also help people remember who you are and what you do.

 

“Your business name has to be memorable and pronounceable, it has to fit on a business card, match your market and appeal across all the industries you intend to service.”

 

“I wanted something fun yet professional for the business name, and I needed it to appeal to lawyers as well as to accountants and marketing personnel. I was lucky that wife also had a background in the legal and marketing industries as she understood what the name needed to portray. After brainstorming possible names with her, she had a flash of inspiration and we just knew instantly that the name ‘Linguistico’ was going to be the right one.”

 

Build, consistently

 

But building a reputation is not only about clever marketing and promotion. What would you do, for example, should your client be unable to pay your invoice on time due to cash flow problems? David believes that offering consistently high-quality client service should be something you strive for at all times and in all dealings with clients.

 

“I believe in picking up the telephone. It’s harder to say ‘no’ to people over the phone and I find that if you send an email you run the risk of sounding grumpy or upset, even if you’ve tried to make the email sound the opposite. Collecting an outstanding debt can lose you a client if done badly. But it can also serve to strengthen the relationship between the parties through better understanding of each other’s business requirements.”

 

Reaching from the lows towards the highs

 

Setting up a new business can come with many risks as well as many rewards. The risk of not making any money was heavy on David’s mind when he gave up legal practice to start his own business.

 

But what he feared most was failure and, more specifically, failing without gaining any wisdom from the experience.

 

“For me it was the fear of giving up at a point when I hadn’t learnt anything. If I’d just had one go at starting my business, then failed and gone straight back to legal practice, that would have disappointed me. Many entrepreneurs fail a number of times before they actually succeed.”

 

Luckily for David, failure was not something Linguistico would have to encounter. Still, there were plenty of difficulties along the way.

 

“I think the greatest difficulty for most new business owners coming from the legal profession is all the new things you have to learn. Lawyers are used to dialling a number for their IT support, accountancy or marketing departments, and their insurance is organised for them. But when you work for yourself you don’t have those support systems yet have to very quickly get a grip on all aspects of your business, some of which might not be your particular forte. There’s a lot of learning before you can even start to generate an income.”

 

But loving what you do will help push you through to success and a clear business vision can help you keep in sight the goals you’re trying to achieve, goals such as job satisfaction, being your own boss and seeing your efforts mature into success.

 

“If you persevere you’ll get such a great sense of satisfaction and pride from having created a business that works, from creating jobs for other people and from winning clients, something that most lawyers wouldn’t get to do until they reach partnership.”

 

“There are financial rewards too, especially when you have a low-overheads business, i.e. a business that doesn’t take significant financial or time investment to develop. And it’s good too to have the opportunity to direct money how you wish it to be directed, by letting your business help charities which have a personal meaning for you, your family or your friends.”

 

The learning curve most new business owners experience can, of course, also be a reward.

 

“I know so much more about the world now compared to two years ago when I first started Linguistico – I was pretty naïve I think. I understand more about languages, countries and cultures than before, including the fascinating history of Australian migration, and I also have a greater appreciation for the role commerce plays in our lives. I don’t think you can or will ever stop learning.”

 

“But the achievement about which I am most proud, has been creating jobs in one of the worst economic climates of recent times. That for me is huge. It’s a pretty cool thing to have done…”

 

ÞNext time, David talks about handling money when launching your new career.

 

David Salter, founder and director of the boutique translation company Linguistico, talks about his journey from solicitor to business owner.

 

Any ex-lawyer wanting to start their own business venture should easily be able to organise business essentials such as registering and protecting a trading name, buying a computer, software, printer and fax machine, organising stationery such as letterhead, business cards, invoices and balance sheets, and of course having a website with email. They might also know the growing importance of Twitter and Facebook to business enterprises.

 

But many aspiring entrepreneurs, even ex-lawyers, often fail to properly research their relevant markets.

 

Researching your vision

 

“Before I even approached the market with my idea,” explains David, “I spent six months doing full-time research into the translation industry. My research showed me what I needed to do and how I needed to do it, the types of work Linguistico would need to undertake, the languages we’d need to work in and whether there were any competitors in the Australian or, because of its similarities to Australian legal practice, English markets.”

 

Before trading, you need to have a clear idea how you’re going to develop, price and market your products or services; whether you need to base your business close to competitors; if you need start-up capital, a loan, approved overdraft or credit card; and how you’ll manage cash flow. An analysis of the current market conditions and competitors can give you the answers.

 

“But I don’t necessarily believe in writing a detailed ‘business plan’. Sometimes I think you can get side-tracked by spending too much time writing a business plan, whereas just getting on and doing the research can be more productive.”

 

“Also, where we are now is so completely different to where we were when we first launched Linguistico that a fixed, formalised document would not really have helped us.”

 

Researching contacts

 

Research can also tell you what kind of business partner(s), if any, you’ll need. Who will set up your IT systems, who will complete the ATO’s e-records and who will find new clients? What skills are you missing and what roles need to be filled in order to give you a viable business?

 

“Researching contacts, partners and suppliers is very important so I spent a lot of time building up relations. I had lots of open and frank discussions with translators already working within the industry so they could tell me what they did and didn’t like about translation agencies. This enabled me to eradicate any such grievances from our practice, before they even arose.”

 

To ensure you have all your bases covered you could consider consulting an accountant or professional business adviser and there’s plenty of advice on the internet (see www.business.gov.au or www.ato.gov.au). Contacting knowledgeable friends and family is a good idea too. As a lawyer, you may already have a number of contacts able to offer you free advice.

 

“I had a group of friends who I’d met during legal practice, all of whom could offer me good advice. They worked in accountancy, insurance and marketing, as well as in general commercial businesses. I formed a sort of an unofficial board!”

 

“My wife was also very supportive. Coming from a legal background herself, she came up with lots of ideas and has been an integral part of our success – without being paid a cent! I couldn’t have done it without her.”

 

Development research

 

As most business owners soon discover, there is clear difference between working in the business (such as completing the day-to-day administration and finances) and working on the business (such as seeking out new business and promotion). If you spend too much time working in the business, and not on where your business needs to grow, the development of your business will plateau.

 

“If you don’t keep your systems and research up-to-date,” David warns, “you run the risk of being reactive to your business rather than proactive about its growth. You need to be able to anticipate your clients’ needs, not just respond to them. Otherwise you won’t have the staff or resources in place to service their needs when they arise and the quality of your client service will suffer.”

 

You always need to know when the business should push forward into its next stage of growth and what the goals of that next stage will be. David recommends always having a clear vision as to where your enterprise will be within three months, six months and twelve months, and then within three years and five years.

 

“In five years’ time, our vision is that Linguistico will be the chosen supplier of translation services to the legal and insurance industries in Australia and the UK, and at the forefront of English-speaking lawyers’ minds when they think of translation work. This will require a combination of consistently high client service, marketing and continuing to develop our business to match the needs of the market.”

 

ÞNext time, David talks about building a reputation and what it’s really like to aim high.