Shortly, I'm going to close one of my companies, bruised with losses. I made 3 mistakes which should be avoided in future.
Fire early, if it's not working out
If an employee isn't working out in the first 1-2 months, let them go early. I kept hoping all too often that people will improve over time, which I guess is a reasonable expectation, but strangely never happened.
These few signals are telling.
- The Ladder Principle: Setup a small theoretical Onboarding phase, but then move the newcomer to practical tasks soon after, and notice if (s)he's catching on to the next level of difficulty each week or so.
- Courageous people do better than the shy ones.
- Look for self-reliant autonomous achievers.
Tight eye on operative balancesheet
It's easy to get ahead of yourselves when on speed. Entrepreneurs by nature are poor bean-counters, but delegating finance completely to a book-keeper lead to poor collections, late payments and an uncontrolled cash-flow.
Play at right market segment
For the longest period, we simply accepted any kind of work that came our way as a service-provider. We didn't so much think of project-profitability. It turned out that, all things considered, small projects were making us losses. We should have focused on higher-budget projects, and not forget to continuously tune our organisation to have happy customers there.
Finally, since culture eats strategy for breakfast, be close and accessible to team, so we have a chance of building culture.