This August marks two important milestones: a decade of being in business for myself, and my rite of passage from age 39 to 40. I am looking forward to both with great anticipation as each decade has brought tremendous learning and growth. I look forward to my 40s, and from what I hear from Oprah and my Mom, things just get better from your 50s on.
As I was reflecting on what I have learned so far, I thought about all the things I have done right and all the things I have done wrong. It is not surprising that the things I did wrong popped to mind first. So I thought I would start with them, then follow with another post next week that shares what I did right.
What I did WRONG when starting a business:
- I wrote a business plan with guidance from Dr. Seuss. Believe it or not, the only business plan I ever wrote for my company was an assignment for a training and development class I took at UC Berkeley when I was still an employee. We were tasked to write a business plan based on the Dr. Seuss book "If I Ran the Circus." This book is about what life you would create if you had no limits or restrictions. I dreamed up a training and development company named "Ganas Inc." where I would cavort with interesting people around the world, work out of my home, take lots of time off to travel and sip lemonade in the sun on my back porch in San Francisco. I had nary a note about financial analysis, sales and marketing strategy or cash flow projections. As fate would have it, I actually created that company, but I never got around to adding to the business plan.
Lesson: Make sure to add cold, hard business analysis to your creative business vision. Far from squashing your idealism, this will increase your chance at rapid success.
- I charged below market rate for my services. This was because I did no research and had absolutely no idea what the going rate was for an outside consultant. I was so totally thrilled that anyone would hire me that I was prepared to pay THEM. The embarrassing thing is that my second client actually offered to pay me more money without me even asking. Is that humiliating or what?
Lesson: Research the market for your product or service. Be realistic about where your pay scale should be based on your experience. Then charge it unapologetically.
- I spent far too many bleary-eyed nights at Kinko’s. When I worked on some of my first big corporate programs, I had no idea how long the design and review process would actually take. This caused many late nights at Kinko’s before a class or offsite, groggily proofing the participant materials. I made the mistake once to trust that the order was done right and came back early in the morning to find manuals that looked like they were put together by drunk Cro-Magnon men using stone picks for hole punches.
Lesson: Estimate the time it will take to complete a project. Then double it. Do not leave material production to the last minute or you are bound to make mistakes.
- I pissed off my production partners by not setting a design cut-off deadline. Some of my biggest strengths are being strategic and creative. The only problem is that I didn’t always know how to turn that part off in my brain when working on a project, and kept tweaking things to make them a little bit different or better. This would end up crunching the production schedule for the graphic designers and technology folks which understandably made them very mad.
Lesson: Believe your graphic designers, programmers and web developers when they tell you it takes a long time to take a rough draft to final production. Respect their limits and do not make your lack of planning become their crisis.
- I was scared sh**less of executives for at least the first 3 years of my business. Of course I didn’t let on that I was scared, but I felt small and insignificant when they would walk into meetings or training sessions. I had this strange feeling that they were intellectually superior and more powerful than me until I finally came to my senses and realized they were no better or more important than anyone else in the company. One of my teenage martial art students who was used to getting pushed around by gang members gave me some good advice and it helped me to see through their bravado. By year four, I was very comfortable around CXOs.
Lesson: Do not be star-struck by people with position power. You will do watered-down work and they won’t respect you. Believe in yourself and don’t be afraid to assert your opinion.
- I let myself be pushed around by some strong-willed clients. I am pretty mild-tempered, and can work with just about any personality type. But I happened to work with a series of strong-willed, demanding clients that could be a real pain in the ass to work with. There were times when I looked the other way when they behaved badly just to avoid conflict. This made me angry and resentful.
Lesson: Be clear on who you want to work with. If someone becomes very difficult or abusive, graciously pass the work on to someone else, or find your "cojones" and set clear boundaries.
- I sold myself by the hour instead of by the pound. I worked very hard at developing strong training, coaching and facilitation skills so that I was well-respected in my field. The only problem was that the only thing I sold were consulting and training, both which required my physical presence. I spent many long hours inside corporate walls or on a plane criss-crossing the country to meet client demands. Although I loved the work, I could have worked smarter and not harder.
Lesson: Knowledge workers can build a great business by giving away lots of useful information for free, packaging wisdom and expertise in books and information products with a reasonable price, and selling face-to-face time at a high premium. This will ensure that you leverage hard-won knowledge into passive revenue streams and you only do in-person work with those who you really want to work with.
- I tried to do everything myself. It took a few years to realize that I was not the right person to handle all my bookkeeping , accounting and administrative work. When I finally woke up and hired some expert help, I was amazed at how quickly and effectively they got things done and the peace of mind they provided by taking care of things that caused me stress.
Lesson: Take an objective assessment of your strengths and weaknesses as you plan your business. Unless there is a very specific reason to develop a skill you have no talent in or interest for, plan to hire someone to do it for you. The payback will be immediate as you utilize only the skills that give you the highest return.
- I believed that you could actually design a program by committee. A number of times when working on a global curriculum for a company, I let the client talk me into a design review committee. This led to interminable review meetings and decision gridlock as I tried to appease totally different factions within a complex company.
Lesson: Make sure you designate ONE decision maker for each project you undertake. Make sure this person has actual decision making power and let them navigate the murky waters of building intra-company consensus.
- I operated with a psychic sales and marketing methodology. The closest I ever came to official marketing was setting up a website that listed my consulting areas and described my background. I never made a cold call, sent a direct mail campaign or spent any money on advertising. If work was getting slow, I would simply articulate a thought to the universe: "I would really like a big honking project to come my way." Strangely enough, 90% of the time it worked.
Lesson: I would never recommend my groovy marketing method to anyone else. Mitigate your risk by setting up a well-researched and multi-faceted sales and marketing plan. You want to make sure that you have lots of good opportunities in your pipeline if times get lean.
After hearing about all these blunders, you may wonder how I ever stayed in business for a decade. Believe it or not, I did very well and brought in upwards of a quarter a million dollars a year. Could I have made a million or two a year if I had avoided these mistakes? Perhaps. But I am happy with my success to date and will share next week the things I did RIGHT. For now, please save yourself some grief and learn from my mistakes!