If you’ve read my past blog post about winning my first six-figure client, you’ll already have the scene set out for this. We were asked to create a brand new channel on the Sky TV platform – it was quite an experience! However, this blog post is all about when I had to say goodbye to that client – and how I dealt with the aftermath. Enjoy this slice of a Diary of an Entrepreneur.
Don’t put all your client eggs in one basket
So, we were on a contract with our first ever six-figure client for a year, and then we decided to part company. Basically, I wanted to concentrate on growing other areas of Stada Media. I was less money-motivated at that time – I simply had my entrepreneurial hat on. I wanted to keep growing the business, and I decided that if we were to continue with this client, we simply wouldn’t have the time.
However, me being me, I didn’t really stop and think about the implications. It sounds idiotic – but trust me, there’s often method to my madness!
I was also overly confident that we had enough clients with us at that time, beyond the six-figure contract, to sustain us and enable us to grow.
So, the contract ended. It was all very amicable – we handed over the keys and walked away.
However, within a month, it suddenly hit me how much we, as a business, RELIED on that client. All of a sudden, our cashflow was decimated. It took me a long time to fill that hole and get the business back into a sustainable position.
Big lesson learned here: don’t be heavily reliant on one single client. Never have all your client eggs in one basket!
Thankfully, we didn’t have to let anybody go – but it was time for me to fill the gap with new clients. We went into sales OVERDRIVE.
This meant that I had to get out there and network, revisit previous contacts, make new contacts and look at new ways of doing sales. Plus, I’d been out of the game for a while. I hadn’t needed to be in it, because we’d had a couple of small clients and this huge one, so everything had been tickety-boo.
Therefore, I had to get out there and win some clients, and quick. I say quick because a typical sale in our business, from prospect to money in the bank, could be anywhere between 2 to 5 months – if not more. You’ve got to build relationships with people before they eventually become a client, and then eventually they pay money into your bank.
First signs of debt
We also needed new credit facilities from the bank at the time to get us through some tough months. One month we’d be okay, then the next month we’d struggle for where to find the money to pay for certain things. A little bit of debt was starting to creep in.
What’s more, because we were a small team, it was really difficult to hide these things from them. There was the risk that it could have impacted their confidence in what I was trying to achieve. However, luckily, at the time, this was new to all of us. My energy levels were still quite high, so I managed their expectations and kept them confident, while in the background I was probably losing my mind!
Hiring my first salesperson
After that episode, I decided it was the right time to hire a salesperson.
Without any additional revenue coming in, it was time for me to hire somebody who could help bring new clients into the business who wasn’t just me. At that time, I was the only salesperson – and that was a vulnerability.
So, I hired a salesperson – but it didn’t quite work out as I’d hoped. However, it was completely my fault for hiring the wrong person. They were lovely to work with, but they just weren’t the right kind of salesperson for the industry we were in. They were great at sales, but just not with the product we were selling.
I was desperate to get additional sales into the business outside of what I was contributing, and that led me to make mistakes.
Another big lesson learned: you shouldn’t really be making decisions when you are desperate. This came back to bite me in the ass – here’s how.
Don’t chase the money
This was the worst business decision I have ever made in my entire life: I ended up selling shares in my own business, and giving up 40% equity.
I was guilty of chasing the money and going after a quick fix – and it bit me in the ass later down the line. If I’m honest – and that’s the whole point of The Diary of an Entrepreneur, honesty – on a business level, it was the wrong decision to sell those shares at that time.
If I had just one thing to share with you in this post, it would be this: never, ever, rush into selling off parts of your business without lots of advice and lots of thought.
Your business might be going well and has potential, and somebody comes along and you discuss money. It sounds attractive, I know – but don’t chase the money. It sounds all lovely and exciting at the time, but it will come back to bite you in the ass! I repeat: do not chase the money!
This was just a taster of darker moments to come in my business. I’ll talk about that in later posts, but for now, thank you for staying with me until the end of this one. I’m really enjoying sharing my business experiences with you – and I hope you will benefit from them, too.