In April, my company celebrated 10 years in business. I can’t even begin to describe the level of gratitude that I have for achieving this milestone, especially because, according to the Bureau of Labor Statistics, “approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half will have failed. And by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate.”
In addition to giving a heartfelt shoutout to EVERY single person who has even remotely helped me along the way, I also want to give back by sharing my top 10 business lessons I’ve learned over these 10 years in business.
So here they are, in no particular order. These valuable business lessons have all played a crucial role in our ability to survive and thrive as a company, and my ability to enjoy the flexible and incredibly rewarding lifestyle of an entrepreneur — which I am INSANELY grateful for.
1. Competitors can be your best source of revenue.
You can’t pay for things with a “competitive advantage,” and you SHOULD “give away the farm,” so long as you’re getting paid for it!
When I first started my company, I was terrified of competitors. They seemed like such a serious threat to my livelihood, which depended upon securing every dollar of revenue I possibly could.
Over the years, though, through a lot of networking, I met a lot of “competitors” that on the surface seemed to do the exact same things my company did. However, after getting to know them more, and getting to know my own target audience more, I realized that there are plenty of projects and clients that competitors don’t want to take on that I would love to take on — and vice versa.
Beyond that, even competitors that did prefer to take on the same types of clients and projects as my company often ran into either bandwidth or skill deficits within their own teams. They would then reach out to us and ask if they could subcontract us to fill gaps in their workforce.
We actually received SO many requests of that nature, that we started a whole separate brand to serve this exact need: Stealth Search and Analytics.
Last, but certainly not least, one of the most important business lessons I’ve learned is that “competitors” also often turn to us for training. Whether it’s skill training for new team members, or process optimization training for their SEO or PPC operations, we often earn revenue by training our competitors to do what we do and how we do it.
That’s another thing I used to be afraid of — “giving away the farm” as some would say. Many people feel as I used to feel, that my company’s intellectual property (proprietary processes and procedures) should be kept under lock and key as a competitive advantage.
However, if you’re getting paid to share that IP with others, competitors or not, you’re not giving away anything! I’d rather take the guaranteed money from the training than hang onto an imagined competitive advantage that may or may not actually lead to more revenue for me someday down the line. A “competitive advantage” can’t pay my bills, but payments for training sessions can.
Plus, after all these years of doing what we do at such a high level and, in turn, gaining such a rock-solid reputation from that, I’m not really worried about anyone else being able to magically gain all the benefits of 10 years of blood, sweat, and tears just by taking a few training sessions from us.
Today, my company’s biggest source of revenue comes from these alliances with competitors that lead to referrals, reseller work through Stealth, and training other agencies. In no way do I feel like I “gave away the farm” by not protecting my supposed competitive advantage. Quite the opposite, actually. One of the most valuable business lessons I’ve learned is that collaborating with “competitors” is what BUILT my farm!
2. Networking is NOT “not working.”
Without networking, you really will be “not working” because you’ll have no clients to work for!
A running joke amongst some business owners is that “networking” is “not working.” Granted, sometimes networking events are nothing more than a gathering of humans with adult beverages in hand (in person or virtually, as the birth of the “Zoom Happy Hour” has shown).
However, if you think of small businesses that you repeatedly use, you probably keep going back to them because you either know them, like them, and/or trust them. That’s who people choose to hand their money over to (or refer people to): people they know, like, and/or trust.
So how do you get people to know, like, and trust you? Well, spending time with them and getting to know them via networking is clearly one very effective way to do that.
A majority of the revenue I made in my first few years of business came either directly or indirectly from networking. I would go to the same events over and over, and see the same faces over and over, talk to the same people over and over, until seemingly suddenly everyone knew who I was and I was getting referrals left and right. Plus, I now had a network of trusted professionals to refer my clients and friends to, and my giving of referrals further strengthened those relationships, leading to more referrals from them to me. Rinse + repeat that = revenue growth.
Nowadays, one of the business skills I’ve learned is to do most of my networking via speaking engagements where I can network with other speakers and attendees both before and after my presentations, as well as some excellent mastermind groups that I partake in when I can. I also now have my own VIP Facebook Group where people in my network get to know each other and help each other out with real-world needs. These are all different flavors of the same delicious networking sandwich, and one of the skills I’ve learned as a successful entrepreneur is that I wouldn’t survive without them.
In short, I like to flip this saying on its head and say that WITHOUT networking, you will be “not working” because you’ll have no clients to do work for!
3. People buy processes, not services.
Having a solid process and giving prospects a visual to help them understand what you’re selling will close more business in less time.
This one hit me like a Mack truck. (Does anyone even use that saying anymore? Anyway…)
After several years of pulling my hair out trying to create an internal system that worked for efficiently delivering our services to clients, while at the same time providing high-quality work, I had come up with something that worked. It’s always being slightly tweaked, even now, but the foundation of it works and works well.
After spending what felt like most of my waking hours on prospect calls explaining how the process would work if they sign on with us, the light bulb went off. One of the valuable business lessons I’ve learned is that in my proposals, I was only explaining the services themselves (i.e. what we would do), not HOW we would do it. So, duh… it’s no wonder I had to spend so much time on the phone explaining how we would go about getting the work done for the client.
I started to put descriptions of our process into our proposals, and my hour-long prospect calls suddenly got shorter. Then, another light bulb went off, and I started including flowcharts that gave a visual representation of the process.
That’s when I started seeing light bulbs go off for the prospects I was speaking to. Now, in a fraction of the time I used to spend, I can explain how our process works and what the experience will be like for a client to work with us. I can’t even accurately describe how enormous of a difference those visuals made. My prospect calls are now MAX 30 minutes, often shorter. I could even probably do most of them in 15 minutes if I tried hard enough, but I don’t like to make potential clients feel rushed. Point is, though, that I could if I needed to.
But wait, there’s more! Another unforeseen business lesson benefit of adding the descriptions and visual representations of our process was that I ended up CLOSING a lot more business. I started to get feedback from prospects that mine was the only proposal they had seen that actually described our process, and some even said that we were the only company that even claimed to have a process at all!
I could feel the prospects’ tangible sense of relief once they realized that a) we have a solid, proven process that we follow, and b) they can easily understand what that process is by looking at the flowcharts.
Especially in the complex digital marketing world where clients are fearful of paying for services that they don’t totally understand, and that makes a WORLD of difference. It’s SO easy, and SO quick, to close new business now — which made me realize that people are buying into our process more so than the services themselves.
4. Retention is easy.
More important than caring about your clients is SHOWING them that you care.
I have a former employee, who is now one of those friendly “competitors” mentioned above, who constantly says that “Pam’s retention is INSANE.”
In the digital marketing world, one of the business lessons I’ve learned is there is a high rate of attrition. Clients tend to move around to different agencies pretty frequently. I tend to say that we are lucky enough to have many clients that have stuck with us for 5, 6, or 7+ years at this point, but when I really think about it, it’s got nothing to do with luck.
I would attribute some of our high retention rate to our ability to get results, but I definitely won’t credit it to that entirely. In the world of digital marketing, results take time, particularly with SEO where the timeframe to even BEGIN to see results can be RIDICULOUSLY long.
What I credit our retention more to, is this:
“68% of customers leave as a result of perceived indifference.” | John Gattorna
One of the skills I’ve learned as a successful entrepreneur is that the clients that have stuck with us for a half-decade or more do not feel as if we are indifferent about them. Even in the longest of SEO journeys, we are constantly communicating with our clients and helping them understand exactly why it’s taking the time that it’s taking.
This avoids the “perceived indifference” effect. Even if you care about every one of your clients more than life itself, one of the most valuable business lessons I’ve learned is if clients FEEL like you don’t care, they’re going to leave.
So this one is easy… don’t just care about your clients, SHOW them that you care. That can be by doing something as simple as scheduling monthly phone calls to maintain genuine, honest communication.
5. Great people lead to great results… but… you can’t expect what you don’t inspect.
Without great hiring practices, you can’t find great employees. And without great employees, you can’t have a great company. But even with a great team, expecting what you’re not inspecting will veer you off course.
If I had to pick one business lesson that was the hardest throughout this journey, it would be hiring. I truly believe that without great employees, you cannot have a great company. However, one of the lessons I’ve learned in entrepreneurship is that getting the right applicants, interviewing them, making hiring decisions, negotiating salary, training, giving feedback, etc. was a big struggle for me for a very, very long time. I occasionally would hit the jackpot by finding an awesome new employee, but I really struggled to find a way to make that a repeatable process.
Thankfully, my business coach, Dave Schoenbeck, came to the rescue here. Through his many years of team-building experience, he had developed the system I needed and helped me see that my hiring process was flawed. It took some trial-and-error tweaking to make his system fit for my particular company, but once I finally nailed it, I was able to consistently find the right kind of team members. That involved not just assessing their skill sets, but (and this was the big puzzle piece my hiring process was completely missing) assessing how their behavioral tendencies and beliefs aligned with the values of my company. Dave taught me how to do values-based interviewing that digs into a person’s core values to ensure a truly correct fit, both culturally and skill-wise.
Today, I have an incredibly awesome team that needs so very little of my attention. They are so self-sufficient at carrying out their roles, taking great care of clients, and upholding the company’s reputation.
That being said, one of the business lessons I’ve learned is that the more awesome a team member is, the more I fall into a trap of assuming that since I’ve found a great employee and trained them, now everything is going to go perfectly smoothly all the time. Obviously, I should know that isn’t the case and that course correction will be needed along the way, but it was always such a relief to have good help that after the training period, I would stop checking in on their work.
Over time, that lack of oversight on my part would allow certain processes and procedures to veer off course from their original intention. One slight misunderstanding, when not caught quickly and when compounded with several other slight misunderstandings, can take a system far off track. And once that train is off the track, it’s so much harder to get it back on than if each minor misunderstanding was caught quickly and course-corrected along the way.
Communication is challenging, and no matter how well I think I’ve described and demonstrated something or how thoroughly I’ve written out instructions, inevitably some part of the training will be misunderstood or misinterpreted. And when clients are buying into our process more than anything else, it’s crucial for that process to be repeatable and consistent.
Therefore, as Coach Dave has drilled into my head over the years, one of the business lessons I have learned is that “you can’t expect what you don’t inspect.” Despite my thorough and complete trust in my team’s intentions and their sense of accountability, it’s still important for me to inspect what they’re doing on a regular basis in order to consistently provide minor course corrections to keep the process train on its tracks.
6. Business is math. Period.
2 + 2 = 4. Revenue — Expenses = Profit. Therefore, all business decisions are essentially math problems. Business = math.
If you’re looking to become a business owner, but you don’t like math and don’t plan to hire a C-level employee who does, you’re going to have a bad time.
One of the most important business lessons I’ve learned is that running a business is essentially an accounting job. Yeah, you may get lucky and the math may work out in your favor even if you’re not constantly counting your beans. However, if you want guaranteed success, you’re going to have to do a LOT of math. All of the time. Every damn day. Math, math, math.
I’ve learned to embrace the fact that budgeting and constantly monitoring our P&L, despite not being fun, is basically the equivalent of monitoring vital signs. Keeping an eye on the numbers is like monitoring the heartbeat, blood pressure, and the other vitals of your business.
7. Your time is your inventory.
If I bought a pair of sneakers at a cost of $ 20 and someone offered me $ 15 to purchase them from me — I would easily and very quickly say no. Envisioning labor hours as physical products help me make sure they keep moving “off the shelves” at an appropriate markup.
If you own a services business, where you do things for your clients as opposed to selling them products, your clients are giving you money as a medium of exchange for your TIME. Yes, they expect you to do something specific and skillful with that time, but essentially you are in the business of reselling your time.
I was way more than halfway into my entrepreneurial journey before this valuable business lesson light bulb went off. I was watching the show “The Profit” with Marcus Lemonis and was thrilled that he was finally doing an episode on a services business (he usually invests in product-oriented businesses).
To those product businesses, he often says things like, “Bad inventory management can bankrupt your business,” and “If you can’t track what’s selling or not selling, [then] you can’t do any forecasting to build inventory. You can’t even monitor trends or customer behavior. You have no shot at success.”
I had always dismissed inventory advice as not applying to my business, until that one episode when he explained to the service business owners that their time, and the time of their employees, is their inventory.
It hit me like a ton of bricks — my time has a cost and my employee’s time has a cost, so why am I not thinking of each hour of our time as something tangible that I purchased and that I need to resell at an appropriate markup? I envisioned hours of time sitting on shelves in boxes in a warehouse just like sneakers or gadgets or any other physical product that one purchases in order to mark up and resell.
I have to purchase those hours from myself and from my team whether I resell them or not. If they just sit there getting dusty on a shelf, or if I sell them for less than I paid for them, then I’ll go out of business.
To some, this may seem obvious or even a bit silly, but for me, envisioning labor hours as physical products that I bought at a certain cost helps me stay laser-focused on making sure they keep moving “off the shelves” and that I am marking them up enough to avoid becoming an example of Lemonis’ mantra that “Bad inventory management can bankrupt your business.”
I now have an “inventory management” spreadsheet where I keep track of exactly how many working hours I purchase each year, from both my employees and myself. Between this and our time tracking records, I can figure out what percentage of each person’s time is billable, and create a markup that covers both their billable time and non-billable time.
There’s one more big benefit to this business lesson learned, and that is how it helps me stand strong against prospects that try to negotiate with me. Envisioning the hours that I pay for labor in my business as physical products with a cost that I can never resell below makes it SO VERY EASY to instantly shut down requests to negotiate on our prices.
8. One-to-many is the only way to scale.
If we spend an hour of time MAKING a thing, instead of DOING a thing, then we can make the thing ONCE and resell it MANY times!
This next revelation followed the inventory business lesson light bulb. If I am running a services company, which means I’m in the business of purchasing hours of people’s time and reselling them, and clients are only willing to pay up to a reasonable market rate for those hours, then how will I ever make more money than I am now?
I have indeed increased profitability over the years by focusing on efficiency, but people can only do things so fast no matter how organized we are, especially when maintaining high-quality work is one of our core values. So there’s a profitability ceiling there that can’t be penetrated by increased efficiency or productivity.
Value-based pricing is another way I’ve increased profitability over time, where we charge a rate based on the value of what we provide as opposed to basing it on the exact amount of time it takes, but again going market rates and what clients are willing to pay is a limiting factor here as well.
In the end, there’s a fixed one-to-one relationship between my cost and my revenue. I purchase an hour of time, and I sell an hour of time. If I want to sell more hours of time, I have to purchase more hours of time.
(Drumroll leading up to valuable business lesson light bulb moment number 8…)
If we spend an hour of time MAKING a thing, instead of DOING a thing, then we can make the thing ONCE and resell it MANY times!
Again, I realize that this sounds like I’m being Captain Obvious, but it was a process for me to get this to fully sink in. I kept thinking that with increased efficiency and value-based pricing, profitability would continue to increase year-over-year. And it did, until it didn’t. When I finally hit that ceiling, we experienced several years of TOTALLY FLAT profitability. I mean like within a few dollars year-over-year. Almost exactly the same profit EVERY year. A total plateau.
I’m now in the process of trying to wrestle my way out of that plateau by developing products that can be created once and sold to many different clients. We’re currently working on educational products like courses and digital downloads, and in the future, I plan to develop software products as well.
9. Change doesn’t have to be scary.
If you are running a company, you are in the business of navigating constant change. It comes with the territory. Get used to it.
“SEO changes all the time, right?” People say that to me constantly. I used to agree, but then I realized that it actually doesn’t change. It evolves. It grows in complexity, but the core tenants never change. Search engines want to deliver high-quality results to searchers. The exact definition of “quality” continues to evolve, but the basic practice of making sure your website answers people’s questions has never changed.
The business landscape changes all the time as well, and I used to get very stressed out about that. Over this last decade, so many things have changed. We used to not be considered a legit business until we got an office with a real conference room where prospects could come meet with us in person. Now, paying for an office can be looked at as an unnecessary expense. People said I was smart to get an office, then several years later, people said I was smart to let it go.
A few years ago, if someone accidentally turned on their webcam during a GoToMeeting, it was SUPER awkward. Now, it’s super awkward to NOT turn on your camera for a Zoom meeting.
The ever-changing nature of the business landscape is the same as the ever-evolving nature of SEO. Yes, it changes, but it also stays the same. Whether it’s a conference room, a camera-less GoToMeeting, or a Zoom “face-to-face”, we’re still doing the same thing: helping our clients.
That same ever-changing nature of the digital marketing landscape does terrify me at times. I thought the General Data Protection Regulation (GDPR) was going to end us. The current looming death of the third-party cookie has me pretty on edge for our PPC line of business as well. But after all this time surfing over tons of waves of change, I realize that there’s no need to be afraid of it. Change is the only constant. Expecting things not to change is actually quite ridiculous if you really think about it.
The same business skill to learn as the “math is business” principle applies here. If you are running a business, your job is essentially to do math constantly. Similarly, if you are running a company, you are in the business of navigating constant change. It comes with the territory. Get used to it.
And it doesn’t even have to be scary. If you use your mission, vision, and values as your guiding principles for each and every decision, you’ll find a way to navigate all the changes just fine.
10. Perfectionism is lethal.
“You’re better off with a kick-ass half than a half-assed whole.”
Oh boy, if I had a nickel for every time I got caught up in my own perfectionism… Well, I don’t think that many nickels actually exist.
This article is case-in-point. Our anniversary was in April, and I’m sitting here in mid-June still working on this article because of my crippling, downright debilitating, perfectionism. My business coach keeps joking with me that if I don’t wrap this up soon, I’ll have to change it to “11 Things I’ve Learned in 11 Years of Business.” Left to my own devices, that is absolutely the way this would’ve gone!
Obviously, I haven’t fully learned the perfectionism lesson just yet – but I have made a lot of progress. “If you want something done right, you have to do it yourself” used to be my mantra in life. I used to feel almost psychotically compelled to double-check every single tidbit of work before it went out to a client. Micromanager was my middle name.
But after enough years of my extreme perfectionism resulting in negative consequences (<– and yes, yours truly was the inspiration behind that article), I’m slowly but surely starting to truly embrace that to run a business successfully, the owner has to GET OUT OF THE F(*&#%G WAY.
The more I treat this business as “my baby”, the longer it’s going to stay a baby and not grow. One of the most crucial skills of a successful entrepreneur is the ability to build a high-quality team, establish high-quality processes, and then GET OUT OF THE DAMN WAY.
I’m also realizing that I set completely unrealistic expectations of myself. Countless times, I’ve worked on something when I was short on time and had to deliver it in a state that I considered to be maybe 50% of where it should be. Every one of those times, the clients perceived that same work to be like 120% of what they expected. My 50% is their 120%. I need to get that in check, otherwise, clearly, I’m just wasting my time.
To help with that, I’m trying to adopt a new mantra. I absolutely love this line from the book Rework by Jason Fried and David Heinemeier Hansson:
“You’re better off with a kick-ass half than a half-assed whole.”
And with that, despite my brain’s current urge to keep working on making this the most perfect article of all time, I’m going to tell myself that I did good enough and wrap this thing up before I have to change it to “11 Things I’ve Learned in 11 Years of Business.”
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