7 Lessons Learned from One Year in Business

by | Dec 10, 2005 | Marketing

Forty has been in business for over a year now, and it’s been a wonderfully successful first year, having completely blown away our business plan estimate, our own expectations, and even our craziest ambitions.

While I don’t claim to be a business expert, I do think that we’ve learned some things that might help others looking to do what we’ve done, so I thought this would be a good opportunity to share some of the lessons we’ve learned in the past year.

Lesson 1: Don’t forget to plan for success.

As a newcomer to the world of self-employment, my primary concern upon launching Forty was figuring out how to keep paying the bills. After all, it wasn’t just a personal risk for myself—I had a wife, a son, a house, two cars, and plenty else on the line.

The demand for high-quality web production services took me by surprise, however, and it was only a matter of weeks before we achieved sustainability and graduated to a fascinating new problem—how to keep up with demand.

I had always expected that growth was something that we’d simply deal with when it happened, but the reality turned out to be much more complex. Growing a business involves a neverending series of leaps of faith, just as making the transition to self-employment did.

You can’t just wait until you have enough money to hire another person, because by then you’ve probably wasted some great potential. If the time is right, you begin hiring, and let the additional income permitted from the company’s growth pay their salaries.

Growth takes work. It’s not just a side-effect of success.

Lesson 2: Don’t let the Good keep you from the Great.

I’m the kind of guy who works really hard to keep people happy. I want every client, even our smallest ones, to be perfectly happy with the work we provide. I want our clients to adore us.

That’s a good customer service philosophy. We believe in it so much that we’ve taken significant losses on some projects, just to ensure that the client isn’t displeased.

However, our obsession with good customer service has in many ways prevented us from achieving great customer service. We could help more people in more significant ways if we had a larger staff, for example, but we’ve been “too busy to grow” because of our many high-effort (and sometimes low-margin) projects.

So, in one of the hardest business decisions I’ve ever made, I contacted several of our clients and let them know that we wouldn’t be able to serve them anymore. Some were accepting, while others were understandably upset.

(We didn’t just cut them loose, of course—we offered refunds to several of them, which made it financially difficult as well.)

Each of the conversations was painful, since I personally try so hard to keep people happy, but they all needed to be done, both for their benefit—because we were overwhelmed and couldn’t properly serve them—and for our own.

Forty is now much better positioned to handle our remaining clients, and to put grow so we can handle a larger client base (and more robust projects) in the future.

Lesson 3: Don’t deliver junk.

During our growth phases, we’ve had to try out a number of new contractors in order to handle our workload. Due to pressing deadlines and lack of available workers, we often hired on little more than a hunch. Often it worked out wonderfully, but naturally there have been a few times where the results were disappointing, or simply not what we were expecting.

When your people come up with something weak, it’s tempting to run it past the client and hope that they’ll somehow miss the flaws. Poor work always comes back to haunt you, though. You can never shake it. Either you have to omit the whole project from your portfolio to avoid having people see it, or you put it in there and let it be the bad apple in the barrel. Either way, you lose.

You also lose your clients’ trust when you deliver poor work. Suddenly, they have to worry about you. They have to monitor your work more carefully. They’re never sure if they can trust you to deliver yet another stellar performance. Don’t give them any reason to hesitate about referring you to their friends.

Don’t even bother with it. Always deliver the best possible work you can put together, even if it means scrapping something on which you’ve worked hard, or for which you’ve paid a hefty sum.

Make it great every time. You’ll thank yourself in the years ahead.

Lesson 4: Long hours? Poor project management.

Having been part of the design/development community for so long, I’m no stranger to the concept of “crunch time.” The fact that I’m running my own business only adds to the effect. I’ve been working 60-hour+ weeks for the past year, and yet it never feels like I’m doing enough.

However, I’ve come to realize lately that long hours aren’t a badge of honor. If anything, they only highlight the need for better organization and management.

It’s easy to associate a huge workload with the idea that “business is booming,” but in reality, it’s usually a sign of some (or all) of the following:

  • You’re disorganized.
  • You’re estimating inaccurately.
  • You’re not managing your staff effectively.
  • You’re giving “nice” deadlines to clients, instead of taking the time to explain and justify more realistic deadlines.
  • You’re trying to do everything by yourself when you really should be bringing on additional help.

Now that I realize that Forty isn’t a victim of its own success, but rather that we’ve allowed ourselves to be sloppy, you can bet that we’re working very hard to correct that situation.

A well-managed project should fit very nicely into 40-hour weeks, and that’s the baseline that we’re shooting for. It may take us a while to get there, but we certainly will.

Lesson 5: Buy good stuff.

New business owners should always strive to be thrifty, but sometimes that means going for the more expensive option. In the long run, a high-quality model will probably outlast three cheap models.

Whether it’s computers, furniture, or employees, avoid sinking money into anything that you know you’re going to have to replace. If you can’t afford to buy the good stuff, save up until you can.

Lesson 6: Get involved

While different industries move at different paces, it’s safe to say that they all move. If you don’t keep up with your industry, you’ll soon find your business unable to keep up with competitors.

Follow your competitors. Stay in touch with your peers. Read trade publications. Attend conferences. Go to networking events. Perform research on every possible aspect of your business.

In short, do whatever it takes to keep on top of your industry.

Lesson 7: Remember the point.

Why are you running your business? Most entrepreneurs aren’t in it for just the money, but it’s easy to forget that.

In the beginning, I was scrambling to close every sale possible, mistakenly believing that income was synonymous with success. It took me a few months to realize that the fun was fading away—and with it, my enthusiasm for working hard to help it thrive.

Don’t let your business turn into something you despise—remember why started doing it in the first place, and then pursue that purpose diligently. Enjoy yourself!

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