I have fierce friends. They can stare down Chuck Norris.
Originally uploaded by eschipul
“A great pleasure in life is doing what people say you cannot do.” – unknown
As the reader has probably gathered, I run a small web design business in Houston Texas. 23 employees now that our summer interns have gone back to school. 300+ clients ish.
Well that small business is 10 years old today. I put in my notice at Lyondell Petrochemicals on 8/15/1997, worked my two weeks, and my first day solo was 9/1/1997. 10 years old today, which is September 1, 2007.
Sheeeeesh! 10 Years! Holy crap!
The main emotion I am feeling is thanks. THANKS to all of the people who have made this happen. I like that quote at the top because it highlights the very challenge. In fact *you* can’t do this, but *you* can build a team and that team can do close to anything. So in so many ways, I do not have a 10 year old business, I have just been lucky enough to assemble a team of brilliant people and have HUGE support from family and friends that allowed us this success.
Humble. At an emotional level that has to be the biggest emotion I am feeling.
The biggest thanks has to go to my wife Rachel of 17 years. Rachel has been the rock that held everything together. It is not easy being married to an entrepreneur, a word that also took me years to accept. But there it is. So THANKS RACHEL!
While many more thanks are in order, we have a few “birthday celebrations” coming up over the last two quarters of this year and I hopefully get a chance to thank most of those people in person. However I do have a few lessons learned that I wanted to share after the jump.
Things I have learned over the last 15 years that relate to business.
- You are standing on the shoulders of giants. Be humble but determined. Those arrogant people you see running “start ups” and talking tough? They act arrogant because they are terrified someone will “find them out”. Pay them no mind.
- There is no such thing as a “self made man”. If someone says they are please tell them they are full of crap. It just isn’t possible. Parents. Teachers. Friends. Mentors. Family. We get SO much help so be afraid of people who claim they did it themselves as they are liars.
- Family and friends don’t really understand in the beginning even if they say they do. Forgive them later. Don’t take it personal when they question you. After all, 95% of businesses fail in the first five years so they have a 95% chance of being right! And it is up to you to believe you are in that 5%.
- Expecting to be in that 5% is a pretty arrogant thought. So accept the fact that you pretty much aren’t like the other people. So be humble but do it!
- Expect investors to back out. Many investors like the excitement, but, well particularly with new tech they just freak out. I had two investors in the beginning back out. They would have had an incredible return on investment in hind sight. It definitely made the start harder, but actually worked out really well for my family in the long run. (Note I still know one of them and they grimace every time they ask me how the business is doing and I reply. And I tend to understate. So there is that.)
- What you learned in college was how to read. So start reading. Most of the Michael Porter stuff is crap. SWOT analysis? whatever. Focus on simple.
- Be afraid of MBAs and CFOs. They are 99.999% clueless. The fancier the name of the school the more terrified of them you should be. Focus on three things in business:
- sell at a profit
- have a recurring revenue model
- love what you do
- Customer service means one thing; treat your employees very very well. That simple. They will treat customers how you treat them.
- Beware of sales people who can sell themselves but aren’t willing to bet on themselves. This one is complex, my point is that over and over I have had “high power biz dev” people tell me about how they are going to take us to the next level blah blah. But they won’t risk. And it is the humble programmer who automates things that generates huge ROI. So personally I like to promote from within and be afraid of the slick sales folks from outside of the organization.
- Even in the beginning everyone will think you are rich while you struggle with cash flow. Perception and reality aren’t even close when it comes to business. We are growing 25%. That means I have lots of worth and little cash. But people don’t get that. So you will always get stuck with the tab. Just deal with it and go sell more.
- Nobody will ever buy you lunch. See previous point.
- Invest in training like crazy even if your people don’t want it. In fact if they are not receptive to training either don’t hire them, or if they sneak in find a way to get rid of them.
- The young ones will lie much more easily than the older generations. It just doesn’t carry the same weight. Again – find a way to forgive. Gen Y is pretty spoiled, but they will come around. We just gotta give them some time to meet reality.
- The burden of communication is on YOU. So if people don’t understand what you are saying, try and try again to get the message across. This is particularly true with tech.
- Someone is always younger, cooler, better looking, richer and more popular than you. Just ignore it. All the while you are frustrated someone else is looking at you thinking similar thoughts. It is too confusing – so just ignore that.
- “Any excuse no matter how valid is still an excuse” – this comes from Covey. The point here is people are “late because of traffic”. Well a determined person would have arrived at 4:00 AM and slept in the parking garage with two alarm clocks in their car. Yes extreme. But the point is you CAN be on time. People choose to be late, they choose so many things. So don’t accept excuses first and foremost from yourself.
- “Do whatever it is that got you there” but remain flexible. By this I mean don’t get fat and happy. Things continue to change fast. Web design took a big turn towards SEO and many of our competitors ignored it to their own peril. Look at the big ad agencies for example (and the people at the top are responsible for the coming layoffs if you asked me!). On this note, now web design is web design + seo + social media and again a bunch of people are missing the turn in the road. And this blog post won’t be read by them and it won’t matter and innocent people will lose their gigs. So “do whatever it is that got you there” and keep studying and innovating and working hard.
- Pay your bills in 7 to 14 days. That idiot accountant or CPA who tells you to pay in 45 days for the “float” is just that – an idiot. People learn your patterns. I can’t tell you how many small favors happen for us without me ever knowing because we have a reputation for prompt payment. Work with your banker for your cash flow – not by screwing your vendors.
- Always run payroll early if you can. And pay yourself last, if at all. And on that note if there is a $2 error on someone’s paycheck stop the presses, drop everything and fix it immediately.
- Never be that leader who says “I’ll cut you a check on Wednesday when the accountant is in the office.” – I mean really – did you start a business and then forget how to write a check? I have huge disdain for people who hide behind accounting like they can’t hand write a check on the spot. Oh please. Any CEO that says they can’t write a check on the spot is simply demonstrating their skill at lying, so take notes and charge them significantly more to do business with you, if at all.
- Cash is king. Run your deposits daily. No games at all.
- Pay your taxes on time and file your reports early. We close out our quarters in 3 to 5 days. Don’t accept any other answer from your accountant. If you get an alternate answer get an alternate accountant.
- Never trust anyone who tips less than 15% at a restaurant. This is a character flaw.
- Never trust anyone who counts the lunch check down to the penny. See previous point.
- Leopards don’t change their spots. Learned that one with my first business! Ouch!
- Don’t let lawyers bully you. Do the right thing and *most* of the time the law is on your side.
- When someone asks you to do something questionable – ask them “is that the right thing to do?” – it is amazing how powerful that one simple question is.
- The government for the most part stays out of your business. Mainly they just make some activities more expensive than others. So work that into your math when bidding. Example: 401ks – you CAN take your money out whenever you want. You just get hit with penalties. That is how I started this business. So don’t confuse “you can’t” with “you will be hit hard with taxes” as those are two very different things. Sometimes you gotta go with the cash flow.
- Don’t respond to RFPs. It took me years to learn this one. They are generally speaking a non profitable venture for most services businesses. Instead align with companies that have no skills beyond responding to RFPs and work subcontract. Get your money up front.
- Firing people sucks. Your best bet is to recruit carefully and do extensive interviews. Any terminated employee is *your* failure either in hiring or in training. Either way, accept accountability and refocus on hiring and training your people.
- Spend a LOT of money on books. Personally our company spends about $500 per month on books and audio books. Winning is the book this year. Great book.
- Forgive yourself. I have a hard time with this one, but as you stick your neck out more and more you WILL screw up. A lot. So try hard to forgive yourself. I am still working on this one.
- Pay attention to the accidents. This is hard to explain, but basically if you do A expecting B and Z results, poke that again and see if there isn’t an opportunity there.
- Don’t believe the investment community. Bankers in particular. They have a goal and it is to separate you from your money. So accept their money but don’t believe that stuff about “relationship banking”. That relationship banker still reports to the underwriter. If you have a software business you feel my pain (software IP isn’t considered as an asset on a balance sheet for software companies if proprietary and privately held. Go figure!)
- You can’t grow without some debt. I hear these people say “I live debt free!” and think whatever. Yes that would be nice, but our little company is showing you can manage debt and cash flow while growing quite profitably thank you.
- Be careful hiring friends and family. Or better yet just don’t.
- You don’t have to be the best at every task, but you have to understand it enough to hold others accountable.
- Don’t be afraid to use words like “accountable”
- Ask every job applicant what the goal of business is. If they answer something other than to “make a profit” then do not hire them.
- Don’t make giant donations to charity from the company. Companies are things, pay your people the extra amounts and let THEM make the decision of how to spend it. Corporations buying million dollar art work is just a CEO trying to schmooze with the rich and famous. Be afraid. Enron comes to mind.
- All great things occur by moving TOWARDS something. You can’t get to success by avoiding failure. You can’t “not be evil” you can only strive towards goals and be a good person. Let me say that again – all good things occur when you are moving TOWARDS a positive outcome. Success is an optimistic endeavor. the reason this is so challenging is moving away from the yellow line on the side of the road does work. It just doesn’t work to the level of helping you win the Daytona 500 – that my friends requires moving towards a positive goal – to WIN as a team.
- … i’ll add more to this list if folks comment?
So the current 42 is once again – go back to THANK YOU and a HUGE sense of humility for all of the help. Thank you to our employees. Thank you to those who got us started. Thank you to our clients without which we would not have jobs. And if you are reading this, in some capacity – THANK YOU!
PS – that picture is from my 40th. A lot of those people are the ones who really DID help along the way. They are truly my “fierce friends!”