It is periodically a good idea to step back, take a deep breath and reflect on those sometimes-scary mistakes that we hopefully have learned from and won’t make again! Here are just a few of mine:

INADEQUATE BUSINESS SYSTEMS

During our initial years in business, we grew 650% during the first five years (making the Inc. 500 List of Fastest-growing Private Companies in the U.S.). Great news, right? Well, sort of. While we were thrilled with our amazing growth rate, as a young company, we lacked the basic business systems to deal with that fast growth. Not only did we almost have “bunk desks” in our too-small office, but we also didn’t have the necessary systems to tell us how we were really doing in terms of productivity per employee, cash flow management, budgeting properly for large expenditures, etc. Therefore, we fortunately focused on developing an infrastructure which would support a rapidly-growing professional service business. At that point, we opted for what was then an overly-sophisticated and well-integrated system that began telling us everything we needed to know – and then some – in order to manage our business properly.

THE HIRING DILEMMA

Knowing how many people you need to get the job done is always somewhat challenging (especially for a consulting-oriented business). Too many people for the volume of work, and you aren’t making money. Too few, and you risk poor service for your valued clients. And with a business which is dynamic and ever-changing, it’s sometime difficult to maintain that perfect balance. For instance, if you are staffed to handle exactly the amount of business you currently have, what happens when an unexpected opportunity walks in your door? What we have learned over the years – from erring on both sides of this equation – is the following:

• Most service businesses need to have about a 10-15% cushion in terms of overall staff time availability beyond current business volume.
• Stay as lean as you can, and don’t hire employees hoping that business will come in to support them. However, if you discover an absolute super-star whom you can afford to “carry” for a little while, grab that person before they get away (just don’t do this very often!!).
• Monitor staff productivity constantly to be sure you know if every member of your team is meeting their goals, and make quick corrections if and when you need to. This could include something as relatively simple as re-allocating workloads, when necessary.

PEOPLE ARE WHO THEY ARE

If your team members have “issues,” we can help fix them, right? One of my biggest business mistakes over the years has been in keeping employees for too long who are simply not a good fit for our company. True, there is a certain amount of healthy coaching and mentoring which can result in significant improvement in areas such as skill level, attitude, and just understanding the basic business we are in. And nothing is more rewarding than seeing your team members start to really hit their stride after a few months. However, if you know in your gut that someone is not a good fit for your organization, the kindest thing you can do for that person as well as for your company as a whole is to move on. Do it with grace and dignity, but do it.

ARE ALL CUSTOMERS GOOD CUSTOMERS?

It took us a little while to figure this one out! Young service businesses tend to want to work with everyone who walks in their doors at first. However, what we learned after a few years is that company/client relationships are like marriages. There has to be mutual respect, open communication, a partnership mentality, and a solid match between what the client needs and what the company can deliver. The expectations on both sides have to be crystal-clear and well-aligned.

We learned that our personality and style as a company is to jump right in and respond quickly to our clients’ needs, while at the same time, doing the necessary research and planning to be sure that our advice is on target and that our activities on their behalf are measureable and meaningful. We found that not all customers are created equal and that we don’t work very well with those who simply want “vendors” rather than value-added partners. Knowing your own tolerance levels and relationship preferences is critical to your ability to succeed with your clients or customers.

So, my summarized advice (which comes from having made all of these mistakes and many more!) is as follows:

• Be sure that you have adequate business systems in place to help manage your growth and your company’s overall health (even if it seems like over-kill at first).
• Constantly monitor your ratio of staff size to business volume, and don’t let it swing too far in either direction in terms of an imbalance.
• If you have a team member who is not – and never will be – a good fit for your organization, face up to that and fix it quickly.
• Choose your clients and customers carefully. Enduring business relationships have to be rewarding on both sides.

Cathy Ackermann, founder and president of Ackermann Marketing and PR, may be reached at cackermann@thinkackermann.com