Small Business Owners share their tips for turning things around after costly mistakes.
& Co., Anaheim,
At 24, David Hendrickson created a for-profit apparel website that
automatically donates $10 from each purchase to animal shelters. Within two
years, his sales were funding 350 organizations nationwide. Then he handed the
reins over to a stranger and nearly lost control of his business.
His error was outsourcing the site’s redesign—including incorporation of
an interactive map—to a web design company he knew little about, based on a
friend’s recommendation. The designer repeatedly missed deadlines, and after
nearly a year, the site was stagnating. “The sales we could have gotten are probably in the hundreds of thousands,” Hendrickson says.
Hendrickson decided to swallow the financial loss,
regain control of the site and redesign it
himself. “It took me a while to just realize it was a mistake and that every
small business makes mistakes,” he says.
That, and not to outsource anything based on references alone.
Property Management, Miami, Florida
Mistake: Forcing a
The hardest lesson in business can be unlearning past habits. Having
worked at one of the world’s largest telecom companies, Alejandro Aguilar was
unaccustomed to his new role leading operations for a small real estate company,
despite the fact that he co-founded it in 2013. Initially, his instinct was to
enforce the same rules as his previous corporate bosses.
He invested $15,000 in sophisticated software systems, including the
project management program Todoist, without first securing buy-in from the
agents, accountant, property manager and marketing staffer who would be using it.
Aguilar instructed them to drop their former communication habits and schedule
all meetings and appointments on a shared network.
But instead of adapting to the new system, employees experienced interoffice
tensions while communication dried up. “Our cash flow dramatically decreased,”
The team reversed course and allowed employees to revert to a system
based on what worked for them individually. “We almost died trying to build a
corporation,” Aguilar says, “instead of focusing on being small and taking
advantage of it.”
Mistake: Many eggs,
When she struck out on her own, Anne McAuley enjoyed a steady flow of blogging,
copywriting, consulting and other freelance projects. Always in search of
strategic partnerships, she began to rely heavily on one client for much of her
workload—and budgeted based on the assumption that the relationship would last.
“It felt good to have what I thought was a solid source for leads,” she
says. But early-stage freelance businesses typically rely on a diversity of
clients to survive, and early this year, the work began to dry up, causing a 20
percent dip in income. “Coming back from this mistake has been challenging at
best,” she says.
The mistake led her to build a more solid business structure. Her new
lead-generation model includes a stronger online referral network, more
follow-up connections and a new website to better reflect her services. Her
lesson: “Work on my business and not rely on someone else, no matter how good
the deal sounds.”