Small Business Owners share their tips for turning things around after costly mistakes.
Founder, Hendrick & Co., Anaheim, California
Mistake: Neglecting vetting
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.
Co-Owner, Merca Property Management, Miami, Florida
Mistake: Forcing a big-business culture
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,” he says.
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.”
Freelance Writer, Phoenix, Arizona
Mistake: Many eggs, one basket
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.”