December 9, 2020

Some lessons you don’t want to learn the hard way

By 5l0b0d1001

When you’re managing a young business, your decisions can make or break your company. To help other young business owners, we asked five entrepreneurs to talk about important errors they made; how they recovered; and the lessons they learned on link ini.

When I started my printing and marketing company six years ago, my mind was focused on getting sales and making a name for ourselves. So we would do whatever we could to get the job first and worry about payments after. We would send a bill and hope that eventually our clients’ accounts payable would notice it and pay us. We were very naive.

We were doing all the work, paying our employees and for all of our materials and then we wouldn’t see money for 60, 120 or sometimes 180 days.

We kept going like this until we were well into the six figures in receivables. It was all completed work, invoiced and overdue. This was putting a lot of stress on the business.

Eventually, we hired someone to track down money and get us paid. We’ve also put in place structured procedures for payments and introduced a standard payment form. We now take half our fee upfront automatically and give a 2% discount for clients who pay the whole amount up‑front. And our salespeople don’t get their commission on the job until we are paid in full.

Things are way better. We get paid on time. My worries about clients going elsewhere weren’t justified. They are more than willing to pay.

Lesson learned

When you’re an entrepreneur, mistakes are going to happen. But if you correct them and don’t make the same mistake twice, you’ll be alright.

Ever since I started my business six years ago, I knew I had to put clear processes in place. But I got so busy putting out fires all day that I never did it. When your revenues grow by 40% a year, the idea of documenting processes on top of that becomes overwhelming.

Our product—reusable, anti‑bacterial beeswax‑coated fabric food wrap—is hand‑crafted, so every time we hire someone we have to train them on how to manufacture it. The learning curve is long and employee performance evaluation is difficult.

When I found out that my operations manager was going on maternity leave, it really hit me. It was all in my head. And now it was also in her head and she was leaving. I had to start again from scratch training someone else.

This is when I began documenting processes and procedures in a manual. So now every time I do something that I would just intuitively do, after I finish the job, I write down what I’ve done.

Every time I do the job again, I go back to my document, review what I wrote and adjust. I am encouraging my team to contribute. It’s a collaborative effort. We are translating our way of doing things into teachable processes. This will help us be more productive and make new employees training easier.