Sage advice from a business owner of 16 years
Every founder makes mistakes. Successful ones differentiate themselves by not making the same mistake twice.
According to the Bureau of Labor Statistics' Business Employment Dynamics, with data through 2016, 20 percent of new businesses fail before their first anniversary. After five years, that figure rises to 50 percent.
As a business owner for 16 years, I have made multiple mistakes that could have cost our company everything. Rather than let my mistakes get me down, I've focused on the positives – lessons I've learned that have kept us growing for the better part of two decades.
The following are the nine biggest mistakes I've made and what I learned from them.
1. Hired the wrong people, then kept them too long
Everyone makes a bad hire sometimes, but keeping a toxic presence in the office can tank productivity and kill morale.
A few years ago, I had an employee who was great on long projects but struggled to coordinate multiple small ones. As a B2B company with many small business clients, we needed people who were quick to transition from one project to another. I tried training and coaching, but eventually realized this would never stop being an issue. After that experience, I learned to spot this pattern of behavior and cut ties before the rest of the team's productivity began to suffer.
2. Failed to set limits on clients
When my business was about five years old, I contracted with a client to provide unlimited website changes for a set monthly fee. Rather than keep things simple, that agreement cost us dozens of hours of productivity.
The client started calling every day, asking for all sorts of changes and additions. Productivity plummeted. After just one month, I canceled the agreement and started outlining specific service limits in new contracts.
3. Let small oversights turn into big losses
We once launched a new client website, which we do all the time, and accidentally left behind a small bit of code: "no index." That meant search engines couldn't find the page – great during development but not after launch.
When the client found the problem, they were irate. One small line of code cost us refunds, free labor and a hit to our reputation. To prevent similar mistakes from happening in the future, I created a go-live checklist, outlining in detail every necessary task to complete before launching a site.
4. Accepted bad deals
Back in 2010, we started a new website and got paid upfront. We delivered, but the client kept lagging, eventually not responding at all. Four years later, the client returned for the same project. We accepted, and the same thing happened.
This time, however, the client said we were at fault for not delivering on our end of the deal. I had to spend a lot of time digging for communications that proved our innocence, when the better option would have been to tell the client no from the start. Now, our contracts have clauses to prevent clients from ghosting us midproject.
5. Overworked star employees
Several years ago, I had a great employee who could do no wrong and said yes to any new project offered to her. Unfortunately, I took her dependability for granted.
One day, she quit on the spot for a stress-related illness, leaving me at the head of several complex projects. Not only did I lose a great employee, but I also had to work everyone else harder to make up for her absence.
Since she left, I have started holding regular meetings with each team member to ensure their workloads are appropriate before assigning new projects.
6. Outsourced to the wrong freelancers
Hiring employees is hard; finding reliable freelancers is harder.
Before we had a full staff, we used freelancers for some code. One of them would constantly hassle us for feedback after delivering broken code. Another delivered a project full of bugs, then disappeared, forcing us to start from scratch.
Today, on the rare occasion we consult a freelancer, we use a system of checkpoints and backups to ensure our payments lead to finished projects.
7. Took on projects beyond our reach
Accepting projects we weren't qualified to deliver created a lot of stress for our team in our early days.
We are specialists in WordPress. On the rare occasions we took projects created on Magento, Joomla or custom platforms built by third-party coders, fixing one could break two more. My desire to offer valuable services got ahead of our abilities, and we paid for it.
I soon realized I was creating more stress for my team and disappointing clients, so I set firm boundaries on the types of projects we accepted. By giving up a few things, we started succeeding more consistently and boosted our client satisfaction rate.
8. Reacted emotionally, not logically
Balancing sensitivity with authority is never easy. Twice in the last 15 years, I have gotten into arguments with staff members that I regret. Phrases like, "I was only trying to help," and, "Why didn’t you just tell me?" didn't get me far in the heat of the moment.
Now, I've learned to keep calm and let the other person have their say. By listening to criticism and setting a meeting to discuss the issue, rather than having it out in the moment, I've turned volatile situations into productive conversations.
9. Delayed acting on good information
I could have taken a lot of steps more quickly, such as hiring my first employee and charging appropriate rates, but I delayed out of doubt. I didn't give myself the credit I deserved, which prevented me from investing fully in my own company.
Today, I subscribe to Marie Forleo's advice: "Start before you're ready." I don't act recklessly, but now I take calculated risks instead of waiting for the perfect moment.
Despite all the mistakes I've made, my business is still here and thriving. As I look back, most of these could have been avoided by defining processes, being honest and keeping communications open. I know I will make more mistakes in the future, but as long as I learn from them, my company will continue to grow.