Learning Business Lessons, Continued
Welcome back to our two-part post on the surprising and sneaky aspects of business ownership that sometimes catch entrepreneurs off guard. Last week, in Part I, we touched on the importance of legitimizing a business, being in it for the "right" reasons, understanding the behind-the-scenes facets of business ownership, and effective time management during the startup phase.
This week we'll hear from another local entrepreneur as we discuss even more business revelations and lessons that are better to learn up front than in hindsight. Let's get started:
6.) It's Ok to Cherry-Pick Your Clients
In the beginning, many new business owners will take on any client, sell to any customer, or do work for anyone (even if the terms are unclear at best and the pricing is uncertain). There is definite value in getting your name out there and getting some projects or sales under your belt but, as time goes on, you’ll come to realize that not all work is created equal (or worth your time).
For example, if you know that a specific strategy is not going to generate enough revenue for your client to not only justify the expense of hiring you but also achieve their goals and make them a profit, and they’re not open to changing their approach, then it’s probably best to decline the project and part ways before you spend valuable time and they come back dissatisfied or decide to terminate the project.
For these reasons, it’s important to establish (in writing) your terms of service, conduct initial consultations, create quotes/proposals, and write up contracts to ensure that all parties are in agreement with regard to expectations. You can find help with this aspect of your business online by using sites like Shopify, Formswift, Termsfeed, and services like Bidsketch which exist to simplify this process for business owners who aren’t also moonlighting as attorneys and experienced corporate jargon-writers. (Disclaimer: only use canned content as an example to build from, don't ever simply copy and paste onto your website without modifying the text to specifically suit your site, or else your efforts will be in vain and you'll look pretty dumb).
To know what makes a good client, you’ll need to spend some time learning what makes a bad one. Obviously late or missing payments would be a big red flag, but think about the way the relationship works, the demands that are made, and the level of work required in relation to the results you’ll be able to achieve. Sometimes, you’re just not going to be the best fit for someone. Sometimes, you won’t be the provider who can deliver what they’re asking for in the most effective way — and you’ll have to learn to be honest and upfront about this so that you don’t earn a reputation of being the provider who over-promises and under-delivers.
7.) Always, Always Have a Backup (for Everything)
Having backup methods in place for various aspects of your business is unquestionably one of the most crucial ways to insure yourself against many possible loss scenarios. If your business relies on the creation, use, and delivery of files that are stored on your computer, even if you also upload them to a digital cloud or shared server, an external hard drive is a MUST. Too many times a computer or laptop will crash or some large chunk of data will get accidentally erased and there’s no system restore point or way to easily recover the information. Do not be remiss to establish failsafe methods and you won’t have to confess to your clients that the reason you won’t have their project completed on time is because your computer crashed and you lost all their information.
It’s important to have backup methods for storing sensitive information, too. Secure services like Keeper and other encryption apps are great for storing passwords and financial information away from your primary device. They sync to an online server and can be backed up periodically; plus you can set them to self-destruct if the host device is ever lost or compromised and/or an unauthorized individual enters the wrong password too many times.
In certain industries, it may be more difficult to anticipate the need for a backup admin on web platforms that require you to be someone’s third-party manager. Whether access is being shared with you or you’re the one handling the account and all of its content, chances are you’ve been given administrative rights to your clients’ accounts in some capacity. There is no foolproof service, and mistakes happen all the time. Each managed account should have more than one admin role established, and you should never rely on your own personal account as the sole administrator for any other account. Set up a “dummy” account for the specific purpose of granting admin rights, and grant someone else you trust admin access to your business account should anything go wrong. Believe me, it happens.
8.) You Will Eventually Need to Give Up Control Somewhere
Remember back in point # 2 where we talked about the challenges of doing everything yourself? That can’t last forever. Because, as we explained in point # 5, time is not on your side. It is simply not possible (or recommended) to attempt to tackle everything on your own for as long as your business is in operation. In point # 4 we addressed the truth that no one will care as much as you do and, although we were referring to customers/clients, the same could be said of anyone you might end up hiring.
The need to control everything and have all tasks executed according to your preferences and specifications will run you ragged. Not only is it much too time-consuming to do everything yourself, but it’s more likely that you’ll make a mistake because you’re so focused on all these other things (and there’s the irony in wanting everything to be done perfectly, your way). It’s wise to take a step back and consider that there may be easier ways to do things that are still just as effective, that perhaps haven’t occurred to you while you’ve been so immersed. With your head down and the details on your mind, you can’t absorb or learn about new methods that exist. We’re not saying you have to hire someone immediately, but there will come a time when you’ll have to relinquish control of the tasks that you can no longer tackle yourself and that are not vital to the identity of the business. Figuring out alternative ways to accomplish these tasks (whether by outsourcing, hiring, or using a third-party service) will pay dividends in both the availability and sanity departments.
9.) You Will Get Blown Off
If you’ve been in business a year or more and you haven’t been blown off for a payment or commitment yet, consider yourself lucky. It happens. As much as it’s a pleasant surprise when your first big payment arrives or when you realize you actually have multiple clients who are paying on time, baby business owners can be just as naive in thinking that this is the norm without exception. Being blown off is as real as teenagers going out to a restaurant and not having enough money to tip. It happens for all kinds of reasons: forgetfulness, miseducation, misunderstanding, miscommunication, dissatisfaction, irresponsibility… sometimes it’s intentional avoidance, other times it’s an honest mistake. That’s not the point. The point is that it doesn’t detract from who you are or what you offer — you just need to have a plan in place for when this does happen to you.
Being prepared by knowing in advance how you’ll handle adversity will make everything feel far less catastrophic when a wrench gets thrown in your plans. If it’s a financial concern, making sure you always have a certain “cushion” in the bank in case a client doesn’t pay will alleviate the stress of counting on that payment. Having a contingency in place for any legal fees you might incur while pursuing a client who has violated contract terms in some way will definitely ease your mind and keep you protected.
And, just like we established in point # 4, since not everyone cares or takes things as seriously as you do, there will be people who contact you and seem interested in starting the process (or even have a consultation) and then just fall off the face of the earth, never to be heard from again. Don’t let it change the way you’re doing things; some people just like to shop around, or maybe they can’t afford you. As long as you have a healthy amount of business with satisfied clients, losing the occasional lead is no big deal.
10.) Always Stay Open to Switching Directions, and Know When to Fold 'Em
Entrepreneurship is funny: it can make you question why you do what you do, it can lead you into something that you love much more, or it can open doors to serial entrepreneurship where you find yourself developing one successful idea after another! The other thing about entrepreneurship is accepting that not all businesses are great, and not all ideas have what it takes to create a business around. Just because you can’t imagine how anyone could live without your plaid fleece ankle-warmers for dogs doesn’t mean you have what it takes for major niche retail success.
The business you start now may not last the rest of your life. Changing directions is always an option: having an exit strategy in place when the time comes will be helpful. Being flexible and knowing when to change directions is a struggle for many business owners, especially when they’ve devoted so much of their lives to a certain path, but detaching your emotion from your business and being open-minded instead of clinging to a sinking ship can make all the difference in the world when it comes to your happiness.
Linda Orsuto, the owner of a group of consignment and antique specialty stores called Lola’s Menagerie in NJ, is a former salon and beauty industry heavyweight who has embraced her next calling. She says,
“I recently ended a stellar 40-year career (not by choice, just circumstance) and realized I was meant to do something completely different for the next half of my life! Passion and marketing and networking have proven to get me to reach every dream or goal I've ever had and are proving that all over again for me. More importantly, when at a crossroads in my life, I ask the Lord to open my ears, eyes, mouth, and mind so that I will be able to receive whatever information I need in order to be where He wants me to be. It works every time! Sometimes I do not know what to do or where to turn, but He does...if we only ask!”