Five years ago I launched Cave Social, a social/digital advertising agency, with the mission of helping businesses tell the best stories possible. Though the company has been able to stick to this mission and grow to several employees and locations, I’ve made more than a few mistakes along the way.
This isn’t unusual, mind you. Ask any business person and they’ll be able to list countless blunders and fuckups they’ve committed in their career. Heck, hindsight is always 20/20. However, for this article I’ll break it down to the seven hugest mistakes I’ve learned from in Cave Social’s short history.
Hopefully you can learn from them as well.
It may seem counterintuitive, but sometimes letting go of business can actually create more revenue opportunities.
1. Don’t Try and Do Everything Yourself
Letting go of control is something I recommend you do sooner rather than later. My business was and still is my baby, so initially, I tried to do everything myself. In my case, this meant countless hours of work coupled with a lot of stress. If you’re a one-person show, then you will have to take a lot on. But as your business grows, look to give responsibilities to others as they join your team.
2. Find Like-Minded People, Not Like-Skilled People
When we started Cave Social, we had four writers. All of us were motivated about trying to build something bigger than ourselves. But in reality no one knew anything about business operations, marketing, accounting, etc. It took us about a year too long to start bringing on people who were equally enthusiastic about the company’s vision but had much different skill sets. That’s when things really started to take off.
3. It’s OK to End a Business Engagement (Read: Fire a Client)
This is a big one. When you begin doing business with someone, you start to expect their monthly revenue. In a startup phase, $500 a month can seem like it’s the difference between making or breaking your business. Well, it’s not. We terminated our first client 18 months into doing business with them. Not because they were a bad business, but because they were bad for our business.
This client was causing 80 percent of our headaches, and was contributing less than 5 percent of our revenue. This math didn’t add up. By freeing up more time, and cutting down on the annoyances, something major happened. We were able to take all of that free time and put it toward marketing ourselves, and doubling down on our best clients. This played a major part in our company’s growth over the next year. It may seem counterintuitive, but sometimes letting go of business can actually create more revenue opportunities.
4. Get Mentors, and Meet Regularly
This comes back to the first point about trying to do everything yourself — you can’t. Asking someone to be a business mentor is a tough thing to do, but it brings endless returns. Not only can mentors provide access to their networks, but they can help you avoid mistakes they have made in the past. Remember, they were once wide-eyed entrepreneurs too. Plus, as you grow, mentors can help you when you and your business have to make tough decisions.
5. Pay for the Tools that Your Business Needs
We currently pay for a plethora of software and internet services, all of which are pivotal to our business functioning. When we first started, I was always hesitant about paying for new tools because all I saw was the upfront cost, not the service boost they would provide to us. Now, I examine things on a lifetime value and efficiency basis, instead of solely on upfront cost. So if I see that a piece of software or service can help our business over the long run, we’ll pay for it because more times than not that software or service pays itself off relatively shortly.
For example, we pay a yearly fee to Shutterstock for photos. That fee is not cheap ($3,000). However, the time we save by not having to search for royalty-free images is nearly immeasurable. It erases any legal liabilities and ensures our team will be using quality images for clients. Thus we don’t get a cease-and-desist letter from anyone, and our clients are happy with our work, causing them to stay with us longer. In the grand scheme of things, the upfront cost is a drop in the bucket relative to the payoff.
6. Prepare to Be Three Times as Big
I wish I had known about the 3X rule before I started a business, but truth be told, we started implementing it in the spring of 2013. This is a company infrastructure mindset. Ask yourself, “If my business tripled in size overnight, would I have the infrastructure in place to handle it?” If so, then great. If not, then think about the ways you can maximize efficiency and improve on your business processes, because your business will have opportunities to grow. When those potential scenarios become a reality (and they will), you don’t want to squander them because of a lack of planning.
7. Ignore the Naysayers
When you start to tell people about your business, they will question it. Peers and strangers alike are going to be negative or give you their passive-aggressive opinions about your business, and that’s OK . Just remember it’s your business, not theirs. It’s your decision to start out on your own, take a risk and do something you’re passionate about. At first I questioned what I was doing all the time. Would we have enough money for payroll? Could we afford another employee? Are we growing at a sustainable rate? This is where it’s important not to become a naysayer yourself. If you believe in something, to hell with what everyone else says about your dream. Go after it and get it.