You are reading an archived post from the first version of my blog. I've started fresh, and the new design and content is now at boxofchocolates.ca

Five Business Mistakes I’ve Made

March 30, 2006

I’ve been in business on my own as a corporation for 7 years now, and was a sole proprietor/freelance type for 2 years before that. With all the successes there have also been a few failures. Here’s some mistakes I’ve made. Here’s hoping they are helpful to someone out there!

  1. Not keeping up with my accounting: This is a killer problem because it is one that balloons. The longer you put it off, the worse it gets, and the less you want to do it. I’ve been trying lately to do all of it weekly – generate invoices every Friday, write cheques every Friday, and sort/file receipts every Friday. I’m still not doing it weekly, but I am getting better at keeping up with my invoicing. This is still my biggest complaint about where I am with business today.
  2. Not getting company credit soon enough: In 2005 I decided that it was time that the company got some credit. It was much easier than I anticipated – I managed to convert a personal line of credit into business overdraft protection and get a reasonable credit card in the company name. I can’t tell you how much of a difference the overdraft protection has made. Having that cushion for when I need it is ubelievably liberating. I highly recommend it.
  3. Letterhead and envelopes: In retrospect, simply didn’t need them. Out of 500 letterhead and envelopes, I think I have used 10 since I got them 5 years ago. It really was wasted money, but I guess you don’t know or believe it until you’ve lived it. I can’t remember the last time I actually sent a letter to someone. (Though I may still use it up for some upcoming ideas – see #5 below)
  4. Not sticking to my core business: For the last 5 years I’ve been hosting web sites. I started with reseller programs, and then moved my way up to a dedicated server. Initially I did it for two reasons: my development/design clients needed hosting, and it meant that I got my hosting paid for by them. It was win/win, right? Well – sort of. I realize now that I have spent way too much time on hosting/server administration instead of focusing on the other things I wanted to do. The allure of a profit margin when looking simply at dollars was tempting and I’m sure it is for many out there as well. But now when I consider all the other things I could have been doing, I’m kicking myself.
  5. Not being aggressive enough: This is something that I’m still not happy with, and I am working to change. I’m reasonably well known outside Canada, less well known within Canada, and hardly known at all within Ottawa (at least, that is my perception). I’m seeing that it is changing and hopefully that will lead to good things.

Have any mistakes of your own to share? I’d love to hear them! Let me know I’m not alone… :)

Filed under:

29 Responses

Comment by Nathan Smith — Mar 30 2006 @ 4:56 pm

I agree with you about the hosting thing. One of my friends suggested that I should do reseller hosting, but that’s taking on a huge amount of responsibility, and presupposes expertise in hosting across the board. For instance, one might know a fair bit about Apache and PHP, but if someone wants an IIS solution with ASP, you’re a bit out of luck. For that reason, I never got into being a hosting provider, and having read about your experience, am thankful for that.

Probably my biggest mistake has been not emphasizing content enough, or letting the client think that they can just fill in meaningful info after the design is done. It really is crucial to get them thinking about content almost immediately after they say they want a website. This is something that is lacking far too often, and that more people need to take into account. We need to make sure they have enough to say in order to necessitate a site at all.

Comment by Jeff Croft — Mar 30 2006 @ 4:58 pm

I totally agree on #4 also. I made the same mistake myself back in 1999, and I’ve *just now* managed to get rid of all my hosting clients so I can focus on design and developement.

Comment by Scott — Mar 30 2006 @ 5:00 pm

I’m definitely with you there on the accounting front. It’s a pain to do, but it just kind of balloons if you ignore it for a while. I’m getting better, but it’s still a chore — especially when tax-time rolls around.

I don’t feel like I’m doing too much wrong overall, or whatever I am doing seems to be working well. I’m swamped with work and am lucky to have a reasonably continuous stream of new potential work coming in. Sure, a lot of it doesn’t go anywhere, but thankfully I’m starting to attract larger and more financially healthy clients (otherwise known as “not cheap”.

Now I just need more sleep ;)

Comment by Dave Seah — Mar 30 2006 @ 5:35 pm

aigh! I do all of those! Thanks for that timely list…the accounting one is my big #1 must do but I never do to the level I should.

#4 is also one that’s on my mind. I’m probably not even quite there yet, since my “core business” is a moving target. I just had the thought in the shower that “packaging my own ideas” might be the core business, not all the things that surround it like design, programming, etc.

Comment by chris bauman — Mar 30 2006 @ 5:39 pm

I sure am glad that you didn’t list us as a mistake. :)

I learned during my first company not to worry about the stationary stuff, too.

Comment by Carolyn — Mar 30 2006 @ 6:02 pm

Ah, confession time. I enjoyed reading your top 5, though I’m disappointed to hear about the stationery. My logo would look so pretty on letterhead and envelopes! Sigh. Well, thanks for saving me all that money.

Let’s see…my biggest mistakes would be:
1. Not getting around to finishing my own site yet, but please don’t tell anyone; it’s far too embarrassing.
2. Doing too much work for free over the years.
3. Spending a LOT of time with NetNewsWire.
4. Not taking enough breaks for stretches, resulting in repetitive stress problems.
5. Not promoting myself the way that I should in all my areas of expertise.

#2 and #3 on my list have brought some positive results, too, I should add.

Comment by Tomas Caspers — Mar 31 2006 @ 2:29 am

Heh, I wish I could generate an invoice every friday…

Comment by Robert Wellock — Mar 31 2006 @ 4:16 am

If anything number 5.

Comment by Krijn Hoetmer — Mar 31 2006 @ 4:21 am

Wow, I have the exact same points/problems both you and Carolyn have. Good to see I’m not alone on those :) Providing a simple solution would be nice, but I think changing a persons character too much isn’t quite possible.

Comment by Charles Jolley — Mar 31 2006 @ 6:25 am

I think another faux pas I’ve committed in the past is trying to do everything myself (or ourselves). This is especially tempting for technies who know how to setup their own email, web site, etc. so they do it, but in the process they waste a lot of time they could put towards activities that make them money (like designing a product, marketing, etc.)

Comment by Kevin from Canada — Apr 01 2006 @ 3:05 am

Wow. Definitely accounting is a big problem for me. I’m a bit torn regarding “core business” though. I think I’m still trying to figure out what mine is. I guess I suffer from the Jack-of-all-trades, master-of-none syndrome which afflicts many one-person web design businesses.

Comment by Russ Weakley — Apr 01 2006 @ 3:33 am

1. Investing in nuclear weapons is not a good business model, i have found

2. Never take children to a client meeting. Ever!

3. Arrive an hour late for every meeting. Like any relationship, it shows people that you are more worthy than them.

4. Double or triple any time application developers say they need on a project. When they say a couple of hours, they mean a couple of days. or even weeks.

5. Don’t employ highly skilled people. Instead, employ people staight out of college, uni or jail. They are much more likely to want to do work for less money!

Comment by Derek Featherstone — Apr 03 2006 @ 5:56 pm

So, it sounds like numbers 1 (not keeping up with accounting) and 4 (not sticking to your core business) are something that others are facing too… if anyone comes up with any good ideas for the accounting, please feel free to share. As for the core business – I guess its just a matter of timing. When I was first doing this, it made a lot of sense to do it – now it doesn’t make as much sense at all.

Comment by Ben Buchanan — Apr 03 2006 @ 8:20 pm

For me it was “don’t try to run your own business when you’re 21; even if you do have a degree already *and* know what you’re doing”. I had to ring and chase every single invoice, because people just seemed to think it was fine to wait 60-90 days when the invoice said 30 days.

Actually to be fair, I had one bread and butter client who paid electronically on the friday after they received the invoice.

Comment by gavin j — Apr 03 2006 @ 11:52 pm

Ben:
Chasing invoices is not uncommon. Some firms hire a person to *just* hound clients for payment. You are usually on a pecking order for paying bills so it pays (literally) to make a bit of noise. The squeaky wheel gets the oil!

Doing you own accounting can be like representing yourself in court. If you can get someone else to do it (properly) all the better. A number savvy partner (wife in my case) is a good thing!

Comment by Jay — Apr 04 2006 @ 9:53 am

Great advice! We’re on the peak of getting our web firm up and running and can always use advice like this.

Buisness cards are something we are trying to figure out if it’s something we’ll actually need, or something to just “have”.

I wasn’t able to make SXSW this year, but do people still exchange them? Anyone have any advice on that front? :)

Thanks!

Comment by Scott Swabey — Apr 06 2006 @ 5:27 am

I seem to suffer from underitis. I underestimate time/cost (have I ever quoted for you Russ?), undervalue my own skills/experience, underpitch my abilities, etc.
As a partial solution to item #1 on the list, I invoice a reasonably large percentage of the project cost on day 1 of the project. This ensures that the first payment usually coincides with the first release of the project at least. After that invoicing schedules tend to slide a little!

Comment by kartooner — Apr 09 2006 @ 8:26 pm

Some good advice there, Derek. Good to see you’re willing to reveal your weak points running a business.

I’m guilty of #5 more than I’d like to admit. I suppose it’s because I’m not aggressive by nature, meanwhile those who I know and who are especially aggressive seem to be more successful at what they do. I’m not sure if being aggresive is key, but it’s a component of doing business for sure.

As for the web hosting, I just direct them to Dreamhost with a referrer link and let them take care of it on their own. It’s worked for me 99% of the time, so far.

Comment by Maaike — Apr 10 2006 @ 2:48 pm

Thanks for being so honest!
There are many familiar points made in both your article and the comments. Especially 1, 4 and 5 are things I struggle with as well and I also suffer from underitis :-)
I also find it hard to say “no” and I work too much for free.

Comment by Kevin from Canada — Apr 14 2006 @ 6:46 pm

Derek, are you still in the business of designing and building web sites, or are you more of an accessibility consultant?
If you’re still mainly a web guy, do you create graphics, design layouts, come up with colour schemes, write the javascripts, and code the back-end database stuff as well for your clients, or do you outsource some or all of these tasks? I’ve recently begun working with a designer (my “skills” in this area are somewhat limited, and when I do come up with something I like, it often takes me way too long for it to be profitable), and am in the process of looking for a good programmer, and was wondering if you had any pearls of wisdom to share. How do you find good people to work with? Thanks!

Comment by Mike — May 22 2006 @ 8:36 am

No. 4: “Not sticking to Core Business” is sage advice. Fortunately I didn’t try to become a host provider myself like others have mentioned. My lack of hardware/network knowledge helped me avoid that pitfall.

I concentrate on the website life cycle to determine my core business services:
1. Life Cycle Stage 1: Website Creation.
2. Life Cycle Stage 2: Website Marketing
3. Life Cycle Stage 3: Website Maintenance

Our clients do need hosting however and so I’d recommend everyone to consider becoming an agent for a well-established hosting firm. You’ll still be able to provide a much needed service to your clients and earn a nice commission without the requirements of billing, support calls, etc required when providing hosting services.

Comment by George — Jul 09 2006 @ 11:53 am

All of those ring true!

I’d probably add growing too quickly. It is important that every client gets excellent service all the time and in the past I’ve seen this slip too often.

Comment by Laura — Jul 26 2006 @ 9:07 pm

Here’s one to add to your list of mistakes:

Skimping on software tools that you should really purchase!

I’m in the same field, and I held out a long time before I bought “real” tools to help build and code my websites. I used a cheap photoshop replacement for the longest time and struggled with it for hours. I finally broke down and purchased the “real deal” – and have been kicking myself that I didn’t do it sooner! Same goes for using an IDE – I was happy with textpad for years – but using a real IDE (dreamweaver) was a timesaver. I’ll admit I still use textpad sometimes – but it’s sure nice to have a choice.

Comment by John from the Isle of Wight — Jul 27 2006 @ 6:48 am

Jay, I find I hand my business card out quite a bit and creating them was well worth the investment, it also looks alot better then writing your number on a beer mat. I agree with alot of the comments regarding letterheads and envelopes, I think i have sent 3 letters in just over a year! Good luck with the new venture.

Comment by manny hernandez — Oct 04 2006 @ 10:10 pm

First off, thanks for your fantastic blog! I have highly enjoyed it. I will be adding it to my blogroll.

Going back to the topic:
-Most definitely, accounting can be a killer. The case where I’ve found this to me so painfully true has been with paying before getting paid at times, running into severe cash crunches. This is in the past, but it tought me a lesson I will always remember.
-Company credit: applied for it since day one. I cannot imagine not having it! :)
-Letterhead and envelopes: a middle-of-the-road alternative is to set up invoices in Excel and letterhead in Word with your company’s header. Not having letterhead is no excuse for not being professional.
-Sticking to your core business: what else but doing what you know to do best. Absolutely great advice.
-Being more aggressive: I can do that too… I guess when you don’t ONLY dedicate yourself to your business (my case -I currently still hold a full time job besides my business) you can be a bit afraid to grow your business more… still, I am doing it. Soon we’ll be launching our company web site and preparing for the next step.

Anyway. As a way to thank you for sharing these pearls of wisdom, I wanted to leave behind this link to a post about How To Give a Useful Performance Review to Your Team Members. Hope it’s useful.

Comment by eko — Oct 27 2006 @ 8:51 am

Thanks for sharing the valuable tips, specially #4, i agree with JeffCroft, hosting is wasting my time also.

Actually, we can get money from anywhere, as long as we work smart and creative.

Comment by William Loughborough — Nov 01 2006 @ 9:36 am

The main shortfall in your career was in failing to participate fully in the Web Accessibility Initiative of the World Wide Web Consortium.

It’s still not to late, and in particular any help you could give in the Education/Outreach Working Group would be beneficial to the Group and to you.

http://www.w3.org/wai/eo/

Love.

Comment by feather — Nov 03 2006 @ 2:53 pm

The main shortfall in your career was in failing to participate fully in the Web Accessibility Initiative of the World Wide Web Consortium.

It’s still not to late, and in particular any help you could give in the Education/Outreach Working Group would be beneficial to the Group and to you.

Hi William – thanks for the comment… I’m not sure if me choosing not to participate in the W3C’s WAI Education/Outreach Working Group and putting my efforts elsewhere is a “shortfall” in my career, is it? I don’t see it as a business mistake that I have made, but perhaps you see it that way… is there a particular reason?

Comment by John from London — Mar 30 2007 @ 10:50 am

Couldn’t agree more on #4! I went the reseller route and I have often thought of just sending clients through a referral link instead!