Since we started Back40 Design in the den of our house 13 years ago, we've done a lot right. Being debt-free, having a stellar web team and awesome clients have led us to success in an industry that has many failures. But even more entertaining than the successes have been the mistakes. Part 1 of my Web Design Business Failures frankly wasn't enough.
Hopefully some of these observations will prevent a reader from making a mistake or two in the future. So I present to you, in no particular order, some of my business mistakes - Part 2.
Not being a 'shmoozer'
I'm not big on small talk. In fact, I spent thousands on personality tests only to find out - I don't like small talk. Unfortunately, most networking events involve small talk. If you see me at a meet-and-greet event, take pity and please talk to me, because I'm really challenged at initiating/sustaining small talk that can lead to enjoyable moments in conversation, business opportunities and friendships. I’m usually over by the food. All this doesn’t make me a bad person, I've made peace with it.
Buying an office building
In 2003 I bought a building Back40 was renting. I didn't plan on buying a building, but the building came up for sale and I didn't care for the person that was going to become my landlord, so I bought a building.
In addition to my infinite wisdom, I lacked the foresight to understand that I would soon outgrow the space I just purchased. The result? I was stuck with a mortgage on a 2000 square foot office building (in need of repairs) in Shawnee, Oklahoma. Within 2 years, I moved Back40 to OKC and the office stood vacant for nearly 2 years. I've made better business decisions.
Buying a building isn't bad - just makes sure you are buying for the right reasons.
Taking over a lease
If you're taking over a lease, then by definition, someone is trying to get out of a lease. Understand that the "the someone" is trying to shed the financial responsibility of the lease and will not have unbiased observations regarding the building, the space for lease and/or the landlords.
Don't ever hire anyone that has stabbed someone
Do background checks. http://www.oscn.net/applications/oscn/casesearch.asp Enough said.
Before I had my current accountant, Rob Sorum, CPA, I had some 'less than stellar' accountants. Watch out for retainer fees. I suggest working with an accountant on an hourly rate. Also, if an account is unprepared when you arrive at your scheduled year end meeting..that's a clue, you may have a lame accountant.
What makes an accountant great? A great accountant will drop by your office, make proactive calls, find money where you didn’t know there was any and consistently produce. Emphasis on consistently. Another benefit of having a great accountant is that they will most likely be able to refer you to other great industry professionals like financial planners, attorneys and insurance agents.
The only thing worse than hiring a friend is firing a friend. Most likely, you will not forget that experience.
Signing an oppressive NDA
There are lots of reasons to dislike non-disclosure agreements. I'll save those for a future blog. This blog is about mistakes and I made one by signing a typical boiler plate NDA. The document I signed was too broad in its restrictions, too open-ended in its time limits and too vague in its protected interests. After signing the legally binding document, I had to turn down work with 3 prospective clients because the projects were somewhat related to the project covered by the NDA.
If NDAs are necessary, make sure they are specific as possible. Remember, the party with the NDA wants to restrict your behavior (and quite possibly your employees) for a period of time (could be forever). You owe it to yourself, your business and your employees to take ANY legal document you sign very very seriously.
Buying cheap furniture
I love IKEA. I love it for my kids rooms. Not for my office.
Furnishing an office for development and client work is an investment. IKEA stuff breaks and most other particle board constructed foil wrapped furniture wears, breaks and ends up in the dumpster years before more expensive REAL furniture becomes a little worn for wear. You don't have to pay full price for quality furniture - you can buy it from other companies selling it or web companies that go out of business.
There's been a lot of mistakes in the 13 years of business. But from those mistakes, Back40 is where it is today. Our current building in downtown Edmond, complete with white
walls, lots of glass, concrete floors, exposed I-beams and mid-century
furnishings--a perfect place for the ever-increasing flow of business. I still prefer to hang out by the appetizers at networking events, but now with over 450 clients, at least there are a few more familiar faces.