In my last post “Bringing You Up To Speed” I told you about my recent short comings and how I would begin a series on things I have learned from these experiences. The Honest Truth series will discuss my various experiences during my mistake ridden first few months as the new owner of Pulse Creative Partners.

In the first few months of my Presidency, I found myself making, what I thought, were good strategic decisions. We had changed our name early on to combat some looming perceptions of our firm as a sign shop. The goal was to get people familiar with us as skilled designers rather than just craftsmen. This has actually turned out to be one of my more successful decisions. What followed, however, were some of the not so great decisions that resulted from the name change. Because our name changed, we had to get new stationery and business cards to the tune of around $5000. Then, because I felt they deserved it, I gave everyone (including myself) a raise. This basically raised our monthly operating costs by about 20%. While the intentions were good, and of course I thought it would make everyone want to work harder, moving too quick to raise salaries actually turned into a bad thing. (I also had added expenses of asset purchase payments each month because I purchased the company on an installment plan.) Then, because I am an aesthetically driven person, I felt it was necessary to go through a renovation, albeit, minor. The renovation was to the tune of around $15,000 +. One bright spot in the renovation budget was that we actually sold off some equipment that we really didn’t need which helped to fund the renovation, almost entirely.

While all of this was happening, we were operating almost entirely off of one project’s revenue we had billed early on in the year and which we had yet to pay for the printing bill associated with it. This is where I made another mistake called American Express Gold Card. I thought I was pretty smart to pay for the sizable printing bill with my Gold Card to take advantage of the points I would receive as a result. Plus, it would give me another 30 days to pay the bill. I thought I was so smart. Good idea, in essence, if you can guarantee that you will have the funding to pay the bill when it’s due.

So, my worries were put on the back burner for at least one more month. And as business was rolling in, and I was anticipating the completion of a few other projects, I thought there was really no reason to worry. Of course, I wasn’t really doing any less spending to be sure I would have the money to pay for it. The AMEX bill rolled in and, as you can probably guess by now, I didn’t have the money, in fact, some of the projects I was going to be relying on were not complete yet and they were going to end up providing less income than I had originally banked on. Go figure. So, I had to let the AMEX bill lapse and I had to do the most miserable thing I have had to do in a long time, ask a client to pay their bill before completion so we could make the payment. Which put us in a bind with another printing bill, but we had to get this one taken care of first.

Needless to say, I put our company in a very tight and overwhelming spot during probably one of the most stressful times of my life. Had I held off on a renovation, which wasn’t entirely necessary, put the money we made on selling equipment into the bank, paid the printing bills when they were due, and kept salaries where they were until I knew for sure we were in a sound financial position to give more money, I might have avoided this situation. Hindsight, as it is, is always 20/20.

We did change our spending habits, worked out a deal with our printer to repay over a few months and had to drop salaries for a short period of time to get us back into the black, but it was worth it, despite countless mornings where I thought I was going to throw up.

I hope this will help someone out there avoid similar situations. I do believe I learned a lot about myself and areas I needed to address which has ultimately made me a stronger business person and Pulse a stronger company. As a result of my mistakes we have actually come away with a much better understanding of how to spend (or not spend) only when it will actually benefit the company. That’s not to say that taking risks is a bad thing. Risks sometimes end in negative results but can also create some tremendous rewards. In this case I took some risks which turned into tragedy but delivered us into a very rewarding and new mindset.

For now, good luck and better spending!

Stefan Bean | President/Creative Director
Pulse Creative Partners, Inc. | BoDo Author | Bean’s Biz