I've made major errors and put my company on the brink

[WestCoast]

On September 1st, we passed $3Million in sales for the year. That's 49%+ revenue growth over 2014.
Bottom line is strong, we've always been profitable, but this year is magic.

We've hired more staff (but, not gone crazy). Promoted our Marketing Director, who is just crushing it. Rebranded the company (logo, tagline, etc), launched new site.
Moved to a much better location/building (I walked away from the deal to buy the one building... which 6 months later is still for sale).

Making lots of mistakes, and learning daily.
I've had to learn how to manage people who have managers now (where, they actually don't report to me, but to another person).
I've wasted money on some consultants who didn't add value. Figures.

2016 is going to be about new systems and improving our processes. Build an operations manual.
Document stuff. Set the stage for further growth from 2017 onward.

We're on a quest to hit $5M by 2019. Right now we're way ahead of pace. But, I'm being thoughtful of what we do.
Economy could crash, all sorts of things, so, we need to have cash in the bank and a team ready to be flexible.


--
Anyway, that's my update for the year. Firing on all cylinders (and I'm back to taking a lot of time off).
Maybe we sell the business and I work on me for 6 months, or a year.... I'd like to do more of that.

I'm 32, and have a lot lot lot of lessons to learn.
Need to learn how to speak to people about deeper issues, be strong in my convictions but also do a better job of listening, understanding, showing empathy and compassion.

I need to rise up as a leader, set the bar ever higher and lead our team ahead.
Exciting times, with more to come.

 

[WestCoast]

I try to add a yearly update to this thread. Keeps me humble.

2014 was our best year ever, again.
$2.57M in revenue, highest gross margins, and likely highest net profit (we'll see after the accountant is done with it).

We are working on some new deals, potentially new products and product lines.
Working hard to get out of being a middleman and owning more of our supply chain.

Excited and nervous.
Mostly excited.

--
I'm currently under contract to buy a commercial warehouse to move our business in to.

In the past, I would have assumed locking in a $1M+ piece of property that the business would pay off would be a grand slam.
Can't go wrong.
But I know this will drive up our fixed costs. We need to grow further to make this work nicely.
Recession could come at any time, that's never good for our business.
Interest rates could go crazy...
Lots of unknowns.

So, I'm going into one of the biggest deals of my life, cautiously.
Been working on the deal for 7 months, 4 to go until we close.
Looking at every angle. Saving every penny.
Want to be ready for curveballs when they come instead of assuming it will be easy street.


2015 will be challenging.
I expect it to be our most difficult year as my companies grows and pushes into new markets.
I expect it to be our most rewarding, as I know the staff and I will rise up to the challenges as they come.

I'm going into the battle with much different tools. Mainly experience.
And this thread documents that fall and rise.


It's a humble reminder to never get cocky. Never assume everything is wonderful.
Keep your head down, build your reserves, leverage strategically - but not recklessly.

Defend the fort.

 

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[WestCoast]

Dear Fastlane Members-

I've been on this board for a year or maybe too. Only place I've found the energy and attitude I really respect in business.

This post is more for a therapy session than anything else, as I'm on the younger side, and have made some major mistakes over the past 6 months. These errors on my parthave severely jeopardized our companies health and future growth. :smx8:

-----
I'm in slowlane retail, I own a business and online stores that sell a certain niche product.

We have been growing ~50% each year for the past 3 years. We've earned a reputation as a good store, with good service and products. We're profitable and everyone at our company makes decent money.

I figured I would sell or acquire another business this year that would bring us to $3million or so by 2010, and perhaps sell the thing and look for a true 'fastlane' business that I could get into.

I always told myself learning and experience were critical, but I would give up a lot of the money earned to take away the emotional pain I've put myself through the last 6 months, culminating in a bit of a breakdown for me yesterday.

We were at $1Million/year looking to grow to $2Million/year in 2009, and that is where the trouble started.


Lessons:
- Don't let past success blind you to current realities
- Give up control is good, but do it very very carefully
- There is no way around having to make good, detailed plans and following them.
- 'Yes Men' managers are potentially worse than no managers at all

-----

So how did I learn those things? I got greedy.
:iamwithstupid:


As a young company, you take lots of risks and try things because you don't have an alternative, you don't have a full staff, you just go go go. It's fun, and lots of stuff works and some doesn't, but the stakes are low.


I have failed as a manager and business owner to grow out of that mentality.
I purchased (with no analysis, no business case, just a gut feeling like the good old days) about $200k worth of new product that I was sure was going to sell great.

:nonod:

We were going to wholesale it to others even, start to get in the drivers seat a little bit at least.


Then I figured we should add a bunch of other new products not related to our core business.

And instead of rationally planning, researching and budgeting for any of this, I just did it.

Managers didn't say peep, even though there was no way we could afford it all.
And when it hasn't sold that well, we just sat there.

We now have almost no cash in the bank, no plan, and hundreds of thousands of dollars in inventory that isn't really at the core of what we do well. And this was all my great, enthusiastic idea. :smxE:

Unfocused, unresponsive, just 'hoping' things will get better is NOT a plan.
Enthusiasm and optimism, while good things to have, is NOT a business case.

I bet the company, knowingly sure, but I bet the company without doing any planing or research.

It's insane, I have no idea what I was thinking. Somehow I would just be correct about every decision I ever made? I couldn't make a mistake and somehow I didn't need to any research on competitors products? I didn't need to figure out cash flow projections before hand??? Who did I think I was?:nono:

I've worked for 4 years to build this place up where I can travel the world, feel like a stud and a young gun that showed the world how to do it.

And that was all a big sham.
At our core, we weren't doing things right, and I have polluted a great company with wild, greedy ideas without a business case behind them. I thought past success would insure future success, and that is very very wrong.


The basics of running the business seemingly left me overnight while I went on this wild goose chase to make the next million, and we are suffering for it.


----
Today starts the day when I retake control of the business.

I'm scared.

I've made so many wrong decisions, how will I really know I'm getting back on the right track like we did before? Do I still have it in me to lead this company?
Do I have the discipline to make us successful and smart and strategic again?
Do I have the GUTS to make some hard choices and keep my eyes on the ball?
I put us here, through lots of little mistakes and one pretty big one, so I must now lie in my bed and make it better. :fryingpan:


I will now sign all the checks personally after the book keeper preps them.
I will take over again day to day operations until I feel the management team is on the same page as I am going forward.
I will potentially have to let a key employee of ours go, and it makes me sick.

I'm responsible, I made the company, and I have goofed things up getting greedy and straying from fundamentals.

We might survive, but either way, the shame, the guilt, the pain are pretty intense.

We had a great thing going and growing so fast, and I thought we could somehow avoid the hard work to keep it growing, and just take a few radical shortcuts.

I'm going to work with our small team to get the company back on track, but I don't think I'll be the same again. This is very hard, and I'm ok with hard work, but I feel like a huge failure to myself, family and all those who I so proudly told how quick we were growing and how fast.


----
Today starts a wrenching process for us. I'm 150% ready to go, but man, I don't think I'll ever be the same again.

I can't be, or the gig will be up.


To your future and mine,
WestCoast

 

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[WestCoast]

Hi All-

I wrote this almost 4 years ago. I was thinking about this thread recently and wanted to provide an update.

Since those dark days, our business has grown every single year.
We passed $2M in sales for the first time a month or two ago. Should end the year at $2.25M.

Hired more staff, moved into a building 6 times larger, but not much more expensive...

I'm on top of every bill, work hard to have my nose in the books, but also give the team the freedom to work and grow together.
Haven't had any full time employees leave in the history of the business, feel like we have a great group.


It's humbling to think about how I almost flushed it all away by not being careful. Even now, we refer to this time often at work and make sure we don't do it again.

We take risks, we make mistakes and we attempt to grow stronger each day.
It's been a crazy ride so far, but the business is alive and thriving more each day as well.

 

[WestCoast]

I'm flattered by the fast responses, I mostly have posted in this thread over the years to make sure I eat humble pie regularly and remind myself it's never easy. Thanks for all your positives comments.

My $100 bet is on $5M by end of 2016.

Oh man, that will be tough. But I like a challenge

Your thread will be my inspiration

That is kind of you, but, I learned something important back 5-6 years ago. It's all you.
You're the owner, you're the boss, the buck stops (very literally) with you. You need a great team, you need a product and all that, but at the end of the day, it's you.

If you're in a hole, and it's dark, look up. Go that way.

What type of leardership style do you have? That matters how you manage people and how they respond and react?

I am an introvert who is very hands off. I hire smart people, give them a lot of rope, and try to check in with them formally once a week. I like to hear the details, but, I don't want to know how the details are carried out (if that makes sense).

I am 100% open in our accounting and books. Every employee can see all of our P&L, current bank account amounts, Balance Sheet. They can't do anything with that, so, I leave it open. I want them to be invested in the business just like I am.

I try *very* hard to always be positive and supportive. Mistakes happen, we screw up all the time. I try to remember that I was there too, I was younger and new at this and I made mistakes. I can't assume all of the staff a) care as much as me, the owner b) should know all the things I know.

As I've gotten a bit older, I've tried to be less intense about things. I'm still a very passionate and talkative person, but, I try to lay low more. Let the staff work.
I also work really hard to compliment, thank and encourage all good deeds and actions regularly. I can't stress this enough.
Without my staff taking care of customers, filling orders, doing all the magic they do... doesn't really matter how good I think I am at business...
They are the lifeblood of what we do.

I tell them all the time: 'It's my company, but it's your business'

This is an awesome, awesome thread. Thank you for being willing to share not only your success, but your failures to.

Thank you kindly for the compliment, your threads and contributions to the board are tremendous.

I cannot like this enough. Amazing story and great update. I love to see the process. You are an inspiration.

Similar feelings to Jason R, I really appreciate the compliment. You've been on this board just as long as I have, and I've appreciated your direct and no-nonse posts quite a lot. Thank you.

Could you describe your internal process of getting out from depressive state to the state you are in now?

Oh man, that could be a long long thread. Two things:

1) sometimes you have no choice. I could sit and be sad that I almost bankrupted my business. (and I did that for about 5 almost totally sleepless nights). Or, you get over the emotion of it, it hurts your pride enough where you just stand up and say -> I'm going a new way now.

2) I've said before, that 'the key to happiness is being happy.' It's a state of mind. I went through (as everyone does), some personal struggles. I was an adopted kid who searched for and found his birth mom during this time. I went through some reconciliation there, for 3 years actually.
But, we choose, really, if we want to be happy. It's a choice.

We can complain about things, or we can not-complain. We can be grumpy and curse under our breath... for the bad luck, the bad break, the unknown occurring. Or we can smile at the challenge, fight the good fight and be satisfied that we worked our tails off to be successful.

Business is not, in itself, a noble quest. I am not a better person than I was when I did not have this company. I am the same person, as anyone else here is. We're just people.

It's a horribly hard choice to get over yourself and face the music, of being human, of being emotional and fallible.
But, once you embrace that, you have the mental power - everyone does - to be positive and happy at the opportunities before us.
Business is a game, and we're all winning by even playing at all - smile at that thought.

--
When the sun is shining bright, some people will complain that it's too hot.
Others never think to complain, they are too busy making hay.

 

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[WestCoast]

It's been 8+ years since I posted this.

The business I referenced in 2009... the one I almost bankrupted.... has kept growing.
We hit $4.3Million in revenue this year. And I am beyond grateful for all the lessons learned.

I'm taking 8-10 weeks off at a time to travel the world, and our staff is strong, engaged, and invested. While I still own 100% of the business, I've helped our team to buy houses, or flown them around the world on honeymoons now.

I am 34 now, dreaming about the future and what I want to do next.
I've saved my pennies, both for darker times that will inevitably come, as well as new ideas that I dream of each day.

A lot of opportunities are presenting themselves, but I'm not in a rush. I'm focused, making the core business stronger, and taking care of our staff and customers.

--
I didn't given an update for a few years, mostly been busy, and I disagreed a bit with how the forum was run and the tone of some people. But, I've learned to show compassion instead of being bitter about things I can't control. So, I hope to be around a bit more and help out where I can.


Regardless, I wanted to say, again, thank you.
To those here who encouraged me over the years when it was dark. To those close to me who never stopped believing in me.

And, if you are reading this... and you have no idea where you're going in life.... but you're hungry and you want more...

I looked inside myself. That is where I found the passion, fire and energy.
The courage and bravery is not given, I had to find it in myself. It was there, I just had to let it out.
Living an uncommon life is not easy, and I've learned that through a lot of hard knocks. But, for me at least, it has been unimaginably worth it.

 

[WestCoast]

I haven't updated this thread in a few years, but figured now is a good time.

The business has continue to prosper. I continue to learn so many humbling lessons, and continue to grow and gain experience. I still know 1% of the things I want to know. But, it's better than .01% that it was when I started this thread.

I left the business full time on Jan 1, 2020, and left day to day operations to the team.
They crushed it last year.
2020 was a record year, passing $5.5M in sales and netting ~$280k

It's not a huge sum of money, considering the years of my life invested... but now I am free to travel the world and have some fun.

I spent 2020 visiting 6 continents, 25 countries, and enjoying.
Now that it's 2021, I'm knee deep in starting a new business.

I will continue to own this one for a while.
It is not perfect, it teaches me new things all the time. And, no it's not as profitable as other businesses its size.
It's not making me a multi-millionaire while I sit on a beach drinking fruity beverages.

But it has provided me a platform. To learn. To grow. To fail.
To dust off, try again, and build a team that I am so very fortunate to be a part of.

Onwards, ever onwards.

 

[JasonR]

This is an awesome, awesome thread. Thank you for being willing to share not only your success, but your failures to.

We all make mistakes. It's how we recover from those mistakes that make all the difference.

Will be waiting to hear future updates.

Rep transferred!

 

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[WestCoast]

Well, the dig out of the hole has turned into a climb to new heights. 2010 will go down as our best year ever by another 20+%

We have now grown 20-30% each years since we started as a $300k company in 2005.

Gross Margins are up, Net Margins are up. Our warehouse is packed with quality inventory, cash flow is greatly improved, debts are paid, we've hired new staff and they are great and profitable additions to the business.

:groove:

--
I have had to learn a lot about myself and how I operate under pressure. In the past I wanted to cave in under the strain.

I thought mistakes I made in business reflected on myself as a person, basically that I was a bad person for making some boneheaded decisions.

However, that's long gone and I focus on the numbers to value my decision and know that I like who I am as a person whatever happens. :heartbeat:

That allows me to focus on the task at hand, instead of making it into something bigger than just a business decision that needs to be made.

--
I am restructuring the business over the next year to prepare it to sell.

There is still so much work to do and each day is filled with opportunity. It takes a new focus to make things happen, but I've got it.

I will continue to make mistakes and stumble, of that I am sure, but the future is a lot brighter having been to the bottom of the barrel and worked my tail off to climb out. :smxG:

We'll be hiring another person or two as we grow and continue to stabilize the business. I'm working to make sure I don't get a head full of clouds. You're only as good as your last deal and I'm hungry for more.

 

[CommonCents]

Congrats for hanging in there and viewing it as a challenge rather than a failure. When things are going pretty good it is easy to take your eye off the ball.

I did similar with a fast growing business. Made the mistake of delegating without building in good info/reporting feedback loops, and promoting people from within for a growing business when they weren't really qualified as my biz grew and grew. Many times your biz will outgrow your original employees.

I found out during a busy time of the year my billing staff didn't invoice (we invoiced daily as orders shipped) for TWO weeks. That two weeks was $3million. Guess why? They ran out of our custom preprinted multiple copy invoice paper. I about hit the ceiling when I found out. But I recognized it was really my responsibility by promoting unqualified people and not building in a feedback loop.

I gave the office staff a quick lesson on cash flow and what it means to be short $3million bucks in operating cash. Wrote up the offenders. Made them email me daily that invoicing was done, if I didnt get the email I assumed it wasn't. An important loop to catch that critical stuff. Eventually brought in more qualified staff to help take the business to the next level.

 

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[MJ DeMarco]

Wow, what a story. Thank you for feeling comfortable with our little group to voice your recent challenges.

Just to echo what others have said, I really don't see a failure -- I see a SUCCESS who is facing some new obstacles and made a few miscalculated (uncalculated) decisions. Since you appear to have learned from the "mistake", it really isn't a failure at all but something that will make you stronger and a better decision maker.

Put it behind you as a learning exercise and vow to move forward. In a few years, you probably will look back at this and say "Wow, that experience really helped me get where I am today".

The prep school to success are these types of missteps.

As for the inventory, is there anything creative you can do with it? If you have a BIG TAX BURDEN, perhaps donation? Joint venture with a supplier? Consignment to wholesalers? Dropshippers?

 

[WestCoast]

Well, it's been one hell of a ride this summer.

I've been in the trenches, that's for sure, learning some lessons I hope I never ever ever forget.

Business is doing much better. Still holding onto about $100k in inventory that is pretty aggravating, but we've generated profits from other areas that are covering our shame a bit.

Made some tough calls to layoff a key staffer. Overhead is trending down.
Lots of stuff happening, but here's the deal.
---

I'm a different person now. I mean, this has been the most insane, can't sleep at night, think think think, plan, work 14 hours a day marathon of my young business life.

I think I made all the mistakes you can make. Not planning, not controlling, trusting but not verifying.

Not setting or checking up on expectations.
Not being direct.


--
I have plenty of more work to do, but we are building back up the cash reserves and pretty actively working to sell through our inventory that i never should have touched.

Learned a lot about suppliers, vendors, banks, who you can trust and who you can't.

It's been a wild ride that I never want to get on again. Hopefully I have learned enough to go into the next business without having to make some of these inane decisions again.

School of Hardknocks, can't wait to graduate.
:fastlane:

(also, all of MJs advice in general, about fast lane vs. slowlane, has proven itself insanely true. Wouldn't have fixed everything, but that man is very correct in what he preaches)

 

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[WestCoast]

so, the last two weeks have been a complete blur. this is really the first moment I haven't been fully involved in the entire business, working working working away.

I have lost track of what month it is, everything is focused on getting costs in line, getting our inventory sold (starting to make some headway here, LOTS more to do) and getting control of things.

We've cut some stupid costs, and I'm signing every check forever and ever now.
Feels like it is my business again.

Office has been rather tense, not the same fast and loose company of before, but I'm getting comfortable with that.

Also trying to motivate everyone with honest, direct feedback.
Nothing is personal, it's all about performance now.


I feel like a different person. Not in a good way or a bad way yet, just in a clearly unique way.

I really want to get this business going and growing again, in a smart and rational manner, and then sell.

I need to get working on the next big thing and this sure as heck won't be it, not much more than a JOB even though I own the place.

So, life changing. This whole things.
Really.


I wouldn't wish the anguish on anyone, but I am doing my best to rise above.
A friend I confided in just called it 'Seasoning'

said to get over myself, get to work and make things happen.
So, that's where I am.

We are going to do some big audits of the books next week to see if our measures have started to take hold too.


We anticipate seeing results from our new focus, re-dedication to the core of the business and hard nosed tactics within the next few weeks.


The last two weeks of my life have been the toughest ever. But, they have not broken me (somehow!), and I am gaining back some confidence that I CAN do this, that I CAN manage this, and I will be smarter, more mature and successful in the long run.


Man alive though, this is still just brutal.......

Onwards and upwards they say.
West Coast PDX

 

[Bobo]

A friend I confided in just called it 'Seasoning'

said to get over myself, get to work and make things happen.
So, that's where I am.

First thought: Hang onto that friend.

Second thought: I'm more confident that you will come through this just fine than you may be at the moment. Entrepreneurs fail, that's precisely what we are great at. ...but is it failure? Nope, it's like Edison's finding 2000 ways NOT to make a light bulb on his way to getting it right.

Your 'mistakes' sound awfully familiar - I've made most of them too.

Question for ya: When was the last time you improved yourself or learned something critical through a great success? If you can answer that one you are up one on me... I always figured a grand success was due to my incalculable charm or great hair... the setbacks I stewed over, analyzed the hell out of and beat myself mercilessly over - sometimes for far too long and to my own detriment.

FWIW - I read your story here and said to myself "This guy will be just fine and a helluva lot more successful in the long run regardless of the current outcome".

Good luck... and don't kick yourself. Take five minutes to analyze how you built the thing in the first place and what you did RIGHT because that's every bit as important as figuring out what you did wrong.

 

[WestCoast]

holy heck, another 6 months has gone by. :smxA:

Well, booked $40k in orders today, so that had me feeling good.... for about 10 minutes.
Time to close the next deals!

---
This has been an amazing, frantic and highly education last 10 months.
The emotional highs, lows, racing heart, all that, what a ride!

--
Our business ended up FY2009 with our highest sales ever. Margins were depressed and were heavily loaded up with this bad inventory. Most of it is gone, but still sitting on enough to hurt the cash flow something fierce. :smash:


Putting together a Board of Advisors to help me with perspective. I find being in the trenches can really cloud the thinking. I missed a number of big picture calls because I was too busy with the little stuff.


I also got pretty emotional about everything. I am learning while PASSION, COMMITMENT and ENERGY are good, with a sound business plan and solid execution, there is no reason to be loosing sleep at night.

You loose sleep when you loose control, don't plan, and don't pay attention.
So, it was literally in my case... my body saying... UHM... PAY ATTENTION HERE!! :nono:

--
Sorry, this is kind of vague, but it's hard to express how I feel. I'm not quite back to normal, but we're surely smarter. I wouldn't wish this experience on anyone, going to the brink, but, in a sick way, it's been really good for me.

What doesn't kill you.....

 

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[CommonCents]

It can be true as far as qualifications for sure. Always have to keep reviewing your organization to see who is keeping up and is ready and qualified for the next level.

the other part is to find out if our employees can learn to delegate, even if they are qualified for the job. Often times early employees are wearing many hats and take on a mother hen attitude. As you grow they HATE to give up responsibility as they think they are less important rather than stepping up to delegate and manage others. The opposite is true, if they keep trying to do everything themselves they put your business at risk and they actually become less valuable.

 

[WestCoast]

CMC & all - thanks for the kind words.

I came back to this because if I can teach anyone some lessons here, that will be a good thing.
If anyone can avoid some of the mistakes I made, it will eliminate a lot of grief from their venture.

I know we are all bound to error and fail and stumble.
I also know that most people on this forum will stand up, rise up again and move forward.

However, I never had a mentor, I never really had someone to guide me. So, if someone out there is going through a similar decision making process, or similar tough time without much guidance, maybe this can help them a tiny bit.

Anyway, I'll try to revist it again in 6 months or a year and keep everyone appraised. (and I'll probably make some more mistakes between now and then!)

 

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[GlobalWealth]

On September 1st, we passed $3Million in sales for the year. That's 49%+ revenue growth over 2014.
Bottom line is strong, we've always been profitable, but this year is magic.

We've hired more staff (but, not gone crazy). Promoted our Marketing Director, who is just crushing it. Rebranded the company (logo, tagline, etc), launched new site.
Moved to a much better location/building (I walked away from the deal to buy the one building... which 6 months later is still for sale).

Making lots of mistakes, and learning daily.
I've had to learn how to manage people who have managers now (where, they actually don't report to me, but to another person).
I've wasted money on some consultants who didn't add value. Figures.

2016 is going to be about new systems and improving our processes. Build an operations manual.
Document stuff. Set the stage for further growth from 2017 onward.

We're on a quest to hit $5M by 2019. Right now we're way ahead of pace. But, I'm being thoughtful of what we do.
Economy could crash, all sorts of things, so, we need to have cash in the bank and a team ready to be flexible.


--
Anyway, that's my update for the year. Firing on all cylinders (and I'm back to taking a lot of time off).
Maybe we sell the business and I work on me for 6 months, or a year.... I'd like to do more of that.

I'm 32, and have a lot lot lot of lessons to learn.
Need to learn how to speak to people about deeper issues, be strong in my convictions but also do a better job of listening, understanding, showing empathy and compassion.

I need to rise up as a leader, set the bar ever higher and lead our team ahead.
Exciting times, with more to come.

I cannot like this enough. Amazing story and great update. I love to see the process. You are an inspiration.

Sent from my SM-G900FD using Tapatalk

 

[Andy Black]

@WestCoast

I saw this thread for the first time ever today.

I totally second @JasonR and @GlobalWealth comments. Thanks for being so open and honest, and coming back and updating it with your learnings and insights.

It's inspiring for everyone to see you stumble but not give up, and to see where you are now.

If you're in a hole, and it's dark, look up.

This is fantastic advice.

"Look where you want to go."

I try *very* hard to always be positive and supportive.

"Catch them when they're good."

I know how easy it is to tell the kid off who's not eating his food, rather than praise the two who are eating their food.

The other two are the ones who deserve the attention.

An added benefit is that praising them is also much more effective at getting the other kid to start eating.


I don't have employees, but did have direct reports in various jobs. "Praise in public, criticise (constructively) in private" worked very well for me.


Thanks again for a great thread.

 

[Ubermensch]

Dear Fastlane Members-

I've been on this board for a year or maybe too. Only place I've found the energy and attitude I really respect in business.

This post is more for a therapy session than anything else, as I'm on the younger side, and have made some major mistakes over the past 6 months. These errors on my parthave severely jeopardized our companies health and future growth. :smx8:

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I'm in slowlane retail, I own a business and online stores that sell a certain niche product.

We have been growing ~50% each year for the past 3 years. We've earned a reputation as a good store, with good service and products. We're profitable and everyone at our company makes decent money.

I figured I would sell or acquire another business this year that would bring us to $3million or so by 2010, and perhaps sell the thing and look for a true 'fastlane' business that I could get into.

I always told myself learning and experience were critical, but I would give up a lot of the money earned to take away the emotional pain I've put myself through the last 6 months, culminating in a bit of a breakdown for me yesterday.

We were at $1Million/year looking to grow to $2Million/year in 2009, and that is where the trouble started.


Lessons:
- Don't let past success blind you to current realities
- Give up control is good, but do it very very carefully
- There is no way around having to make good, detailed plans and following them.
- 'Yes Men' managers are potentially worse than no managers at all

-----

So how did I learn those things? I got greedy.
:iamwithstupid:


As a young company, you take lots of risks and try things because you don't have an alternative, you don't have a full staff, you just go go go. It's fun, and lots of stuff works and some doesn't, but the stakes are low.


I have failed as a manager and business owner to grow out of that mentality.
I purchased (with no analysis, no business case, just a gut feeling like the good old days) about $200k worth of new product that I was sure was going to sell great.

:nonod:

We were going to wholesale it to others even, start to get in the drivers seat a little bit at least.


Then I figured we should add a bunch of other new products not related to our core business.

And instead of rationally planning, researching and budgeting for any of this, I just did it.

Managers didn't say peep, even though there was no way we could afford it all.
And when it hasn't sold that well, we just sat there.

We now have almost no cash in the bank, no plan, and hundreds of thousands of dollars in inventory that isn't really at the core of what we do well. And this was all my great, enthusiastic idea. :smxE:

Unfocused, unresponsive, just 'hoping' things will get better is NOT a plan.
Enthusiasm and optimism, while good things to have, is NOT a business case.

I bet the company, knowingly sure, but I bet the company without doing any planing or research.

It's insane, I have no idea what I was thinking. Somehow I would just be correct about every decision I ever made? I couldn't make a mistake and somehow I didn't need to any research on competitors products? I didn't need to figure out cash flow projections before hand??? Who did I think I was?:nono:

I've worked for 4 years to build this place up where I can travel the world, feel like a stud and a young gun that showed the world how to do it.

And that was all a big sham.
At our core, we weren't doing things right, and I have polluted a great company with wild, greedy ideas without a business case behind them. I thought past success would insure future success, and that is very very wrong.


The basics of running the business seemingly left me overnight while I went on this wild goose chase to make the next million, and we are suffering for it.


----
Today starts the day when I retake control of the business.

I'm scared.

I've made so many wrong decisions, how will I really know I'm getting back on the right track like we did before? Do I still have it in me to lead this company?
Do I have the discipline to make us successful and smart and strategic again?
Do I have the GUTS to make some hard choices and keep my eyes on the ball?
I put us here, through lots of little mistakes and one pretty big one, so I must now lie in my bed and make it better. :fryingpan:


I will now sign all the checks personally after the book keeper preps them.
I will take over again day to day operations until I feel the management team is on the same page as I am going forward.
I will potentially have to let a key employee of ours go, and it makes me sick.

I'm responsible, I made the company, and I have goofed things up getting greedy and straying from fundamentals.

We might survive, but either way, the shame, the guilt, the pain are pretty intense.

We had a great thing going and growing so fast, and I thought we could somehow avoid the hard work to keep it growing, and just take a few radical shortcuts.

I'm going to work with our small team to get the company back on track, but I don't think I'll be the same again. This is very hard, and I'm ok with hard work, but I feel like a huge failure to myself, family and all those who I so proudly told how quick we were growing and how fast.


----
Today starts a wrenching process for us. I'm 150% ready to go, but man, I don't think I'll ever be the same again.

I can't be, or the gig will be up.


To your future and mine,
WestCoast

What's up, bro? Im from the @WestCoast, too.

A couple things in common: I was born in Cali, and also joined the forum in 2008.

You already know the mistake you made. You sacrificed short-term results over long-term. That never pays off (I learned this two years ago, around the time I went from one of @MJ DeMarco 's favorites, to something worse than something out of @devine 's most psychotically narcissistic nightmares).

You sound like you're all in... I made that choice back in 2008, the time I joined this forum. I haven't had a job since. So, trust me when I understand that you are directly impacted by the profit of your efforts. When you lose, you - and those who you support - feel it.

And when you win, there is no greater feeling in the universe.

What I learned the hard way is that winning - I mean really winning, as defined by Gordon Gekko $50M - $100M... enough not to waste time... - involves incredible short-term "sacrifices."

You have to sacrifice the desire to feel coddled by a job, the adult's version of an allowance, in which the employer gives you a bi-weekly "allowance" (these adult children of the system prefer to call this compensation a "salary"). You have to sacrifice being able to go out with friends. You may need to sacrifice the friends (and PROBABLY family) as well. Most people can't do that. They aren't psychologically ready for it, so when the pain gets real bad, they just pop another handful of blue pills, and tell themselves the moral story perpetuated by those who they so desperately need to escape in the first place.

Most people can't just give EVERYTHING, because - for them - success isn't everything.

For me, it is.

And for you, it apparently means a hellava lot to you... considering you felt compelled enough to start an OP.

This isn't an L, at least not in terms of a "loss." It's a lesson, a reminder to keep your eye on the prize, planning all the way to the end (obsess over game theory, logic and strategy if necessary... LOL), and remembering that short-term < long-term all the time everytime.

Good luck, player.

 

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[GlobalWealth]

I think I made all the mistakes you can make. Not planning, not controlling, trusting but not verifying.

You have certainly not made every mistake. I know you feel like you have, but I highly doubt it. There are always more to make. This is one of the best threads I have read on this site. Your willingness to share your failures is bold. When I read the first post my thought was, "this person IS a huge success". Not was, but is. I say that because as you have heard the cliche many times "success is a journey, not a destination". You are on a journey and you have now learned some of your most valuable lessons from this experience. How can you be a failure if you have learned from it and are taking action on correcting it? We weren't born knowing how to run a business, we only learn by own own experience or that of others. You are learning. We all should be learning every day. I have been through a similar situation a couple of times in my business career. It forces you to make hard decisions. It forces you to reflect on yourself and what you want. I hope you are also doing this. Take the time to set goals for yourself. If you want to sell the company, have you set a time to do it by? Why are you selling it? What will you do after you sell? Will you be able to take time to search for your next career? Just keep in mind, we only get one ride on this roller coaster, make the best of it. Life's too short to be unhappy.

 

[Bila]

Amazing thread. I am in the exact same situation as yours .... When you started the thread. Mistakes ( big ones) and a lot to learn .
I do feel that i am changing too, and in the process of restructuring my company.

You articulated very well everything i am going through. Thanks
Your thread will be my inspiration

 

[RonRiktor]

As for the inventory, is there anything creative you can do with it? If you have a BIG TAX BURDEN, perhaps donation? Joint venture with a supplier? Consignment to wholesalers? Dropshippers?

I was wondering the same thing, MJ. Would be curious to know what the product is to see what creative options there may be.

Slanket, anyone?

 

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[scottychang]

West Coast,
New to the FLF, so I have been looking around at threads to consider, and was struck by your posts, incredible how I can relate to all of your comments!
It is amazing how there are so many common rules and "best practices" in business that transcend category. I feel as though I am where you were in Oct 2009.
Glad things are turning around for you!
scottychang

 

[Darkside]

It can be true as far as qualifications for sure. Always have to keep reviewing your organization to see who is keeping up and is ready and qualified for the next level.

the other part is to find out if our employees can learn to delegate, even if they are qualified for the job. Often times early employees are wearing many hats and take on a mother hen attitude. As you grow they HATE to give up responsibility as they think they are less important rather than stepping up to delegate and manage others. The opposite is true, if they keep trying to do everything themselves they put your business at risk and they actually become less valuable.

I've actually had the same reaction once at a job that I had. I figured that the less busy I was, the less important I was to the company so I figured that I was no longer trusted to do my previous duties but the truth was that I was given a more important job that was less busy than the previous one but meant more to the company.

 

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[scottychang]

I just learned that lesson the hard way, almost waited too long to replace a manager at one of my stores.
Also finding out that you can train people, but you cannot train personalitiy traits.
Chang

 

[LightHouse]

Glad to hear things are looking up @WestCoast, Look forward to hearing how process's help build your business even further. From what I have seen, its the difference in making 1M and 10M.

My $100 bet is on $5M by end of 2016.

 

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[WJK]

Dear Fastlane Members-
I will now sign all the checks personally after the book keeper preps them.
I will take over again day to day operations until I feel the management team is on the same page as I am going forward.
I will potentially have to let a key employee of ours go, and it makes me sick.
I'm responsible, I made the company, and I have goofed things up getting greedy and straying from fundamentals.
We might survive, but either way, the shame, the guilt, the pain are pretty intense.
----
Today starts a wrenching process for us. I'm 150% ready to go, but man, I don't think I'll ever be the same again. To your future and mine,
WestCoast

We've all been there. Hang in there. All is not lost... yet! You'll make yourself better at business and your personal life. Growing up is tough to do!
Now, may I give you some advice. Sleep on your major decisions before you go out drop the hammer. Most things can wait a day. Get quiet and let the answers come to you. You know what you need to do, if you stop fretting. Move through this moment with your quiet heart and make a list of things for which you are grateful. You have a wealth of experience and success behind you.
Find a way to raise cash. Sell of the extra inventory, even at a loss. Cash in hand is sure better than cash invested in unsalable inventory. Cut you losses. Make a plan and adjust it as needed. Get a personal handle on your cash flow. Yes, of course, sign your own checks -- it's your money. Get your employees on board. Find out their ideas to get things on track. Admit you missteps. Be on site, front and center. Be there early and late. Put your ears on -- listen, listen, listen. Be humble. You're only human. Clean house on all fronts. You can do this. You can turn the ship around. Best of luck!

 

[WestCoast]

You can do this. You can turn the ship around. Best of luck!

Hi WJK, I did indeed. The original post you replied to was from 2009.
I provide updates in this thread every year or two to remind myself (and others) how far I've come since those times.

 

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[WJK]

Hi WJK, I did indeed. The original post you replied to was from 2009.
I provide updates in this thread every year or two to remind myself (and others) how far I've come since those times.

Sorry I didn't realize the date of your post. Good for you. It's amazing how smart we get over time. Those bumps and bruises become our badges of honor. There's no substitute for experience and seasoning that comes with time. Merry Christmas to you and yours from our little home in the woods here in Alaska.