This is written by Jason Schwartz, Founder and Creative Director at Bright Bright Great. This reflects my perspective as a small business owner. Everyone will have a different take on 2023.
This year was tough, really tough
This year was hard. It was hard to run a business. It was hard to work at a business. It was tough watching amazing people lose jobs. It was painful watching what people tried to do with the resources allocated to them. It was tough watching teams fold. It was tough watching companies with billion dollar profits let their workforce go.
It was hard just trying to be a sane person in a world of crazy.
It seems like every post on LinkedIn is congratulating awesome teams for the exceptional year. Most of these successes owe at least some, if not a majority of that success to those who were let go in 2023. Yes, teams were amazing, but the year in general was not.
Layoffs, the job hunt, promises of bigger and better things
This year, I saw friends and family lose their jobs to layoffs, budget cuts, companies folding, lack of work, and companies just flat out running out of capital.
Some of the most talented people I’ve been fortunate to know over the span of my 25 year design career were laid off, caught in the crossfire. Some still unable to find a job after a 2022 layoff.
To those laid off, or unemployed, no part of this speaks to your fault. Your talent remains and we see you and want you on our teams! We are waiting for new work to lock to scoop you up and collaborate again!
What about money?
It’s been clear for about 24-months that truly any cost cutting is helpful.
That said, cost cutting is not a business strategy. It opposes growth, creates a gap when opportunity arises in the future, and opens the door for shitty output.
Running BBG to live on “very lean” end of the spectrum, we personally opted for things like lowering bills, ditching our 6,000 sq. foot physical office, and spending less on “stuff.” If a process could change to save money, we looked at it. Never once did we look at layoffs in this equation, however even we were not totally immune to staff reduction.
We had to make two layoffs, which for a small team is brutal. This was entirely due to lack of work, not due to performance. We loved working with both teammates we had to let go and wish they were still with us.
That brings me to elements out of our control.
Interest rates are crazy. Money is expensive right now. Everyone feels this—company owner, worker, contractor, parent, friend, everyone—all of us just trying to live. I bought an $11 box of breakfast cereal at my local Walgreens in October. That is not a good sign.
How about business expenses? Our company health insurance is going up 22% in 2024. Every single digital tool we use on a daily basis went up double digits in 2023. The boxes are getting smaller and the prices are getting higher. Overall, our agency expenses are up about 20% in 1 year. Being honest, that is FUCKED.
BBG has not raised our costs for our work. In fact, we are trying to do smaller projects with appropriate budgets to fill gaps. We should increase our costs to match inflation, but we are afraid that would make inbound work even harder to get. The only cost we’ve raised are 3rd party costs passed through to clients, which happens with all expenses in our business model anyway.
Reflecting on our 2023 primary goal
Coming off a pandemic, our primary goals for 2023 were to keep our staff in tact and save “in case of emergency.” We only achieved about 50% of that goal having to let team members go. We also didn’t save money. Not a great feeling.
How did BBG do in 2023? That is a great question with one of the most perplexing (but not surprising) answers. In 2023, even in a pandemic, even with layoffs, even with rising costs, we had our best year in terms of revenue since I started BBG in 2008. Here’s the kicker, we have the least profit remaining, from the most revenue. Why is that? (Oh yeah, that 20%+ agency cost increase is the margin we lost.)
Yeow.
Same request, different budget
What about client work in 2023? What was the common pattern?
In my 25 years of working professionally I have never seen companies digging themselves into as deep of a design/tech debt hole as in 2023. When the numbers lock on December 31st and everyone wonders why 2023 was terrible, it’s pretty easy to remember that most initiatives were put on hold, whole teams let go, and marketing budgets slashed. Work didn’t progress. Business doesn’t just magically happen without these items, bottom lines get a very temporary boost, but it resolves as the debt piles up and all of the work that needed to be completed in 2023 needs to be completed in 2024 at a higher cost. The big kicker is the time lost waiting (also not a business strategy.
One of the more odd regular occurrences in 2023 was the yearlong RFP. Company after company has dangled the promise of work over multiple agencies heads through RFP-processes the entire year, with multiple rounds of requests, asking for free design work as table stakes.
RFPs have always been a terrible process as they ask agencies for the solution before the process, however what everyone is seeing is that with reduced financials, the RFP asks stayed the same, but the budgets decreased by 50%.
Ask your dentist to perform dental services for free noting that maybe they will get your business…if you pick them, see how that goes.
20% more expensive box, half budget.
A new hope, 2024 will be better
Star Wars reference. Here are my hopes and wishes for 2024.
BBG has been lucky to have a handful of clients who have continued to believe in themselves and us during the past 24 months. Without them, we’d be closing our doors, or would have already. We appreciate you. We appreciate you every single day.
I also want to shout out the awesome staff committed to seeing this through. We see the opportunity at the end of the tunnel and are excited to work together when it happens.
I would love to see the government create a way for small businesses to find cheaper capital. That allows us to hire people who pay taxes. It’s a win-win. Lower rates will be helpful, but 7% is not 2%. That 7% on top of the 20% is an absolute killer. We need access to capital that allows us to grow, hire, prosper.
I hope that all of the people I continue to see laid-off, counting the minutes to jump back in can rejoin the workforce at companies that believe in them and grow their careers. With an economic turnaround, your value skyrockets.
With all of the companies downsizing and restructuring there will be a drought for good partners. Agency value skyrockets! I hope companies open the floodgates to great project opportunities for these teams. The world has a lot of problems to solve. Let’s spread it around to elevate our industry as a whole. We want to claw back as much talent as possible to make the best possible work for our current and future clients. Win-win-win.
I personally hope that BBG sees appropriately budgeted work that comes from clients excited to work with us! We want to work with you and are ready. Don’t let a small amount of money comparing agencies be the deciding factor in transforming your entire business. Find the partner you believe in and make it happen.
Onward with a positive mental attitude and hope that we all get over the bumps in the road!
