What I Learned in My First Year in Business

Starting a new business? Get ready for a good schooling.

You will make mistakes. But if you survive your first year in business, you learn from those mistakes. You have to. Everyone I talked to who started a business said the same thing: “I learned a lot in those first couple of years.”

Looking back on my first year as the founder of Bullet Marketing, I’d say that the single most important lesson I learned is the value of relationships. And by “relationships,” I mean real relationships. Face-to-face relationships. Meeting-for-coffee relationships. I-know-you-in-real-life relationships.

What I don’t mean are Twitterships. (Is that a word people use? I think I just made it up.)

The value of real relationships is not equal in all industries or for all businesses. If you’re Amazon or Priceline, for example, quantity is what matters. Relationships do still matter: loyalty and repeat business are key to profitability because of the high cost of customer acquisition. So you have to treat your customers nicely. But you don’t have to know them personally. In fact, if you’re Amazon you can’t possibly know all of your customers personally.

Consulting is different. When it comes to consultants (and marketing agencies), companies hire people they know. More precisely, people hire people they know. We hire people we know because they’re familiar, we’ve worked with them before, we know what to expect. Having to decide between two apparently equally qualified candidates for a contract, one of whom is a known quantity and the other unknown, people will always choose the familiar.

You’re probably not surprised by this revelation. It seems so obvious. But when I started my business, I didn’t pay enough attention to the importance of real relationships.

Like a lot of other business owners (and employees), I was taken in by the hype surrounding social media and online marketing – inbound marketing, search engine optimization (SEO), social media marketing, and so on. I thought, “If I’m on Twitter, if I get a Facebook page for my business, if I optimize my website for search engines, I can sit back and wait for new customers to find me and knock on my door.”

Ha! Here’s the reality: Not a single prospect has contacted me because they discovered my website or were drawn in by a social media activity I’ve done.

(Here’s how another small business owner put it: “I didn’t see the needle move.”)

That doesn’t mean that a social media strategy isn’t important; but I would question its value for small businesses selling a service that depends largely on consulting or that is built primarily on the reputation of the owner. When you’re a small business with limited resources, you have to know where to invest your time and dollars, and you have to focus on those areas where real opportunity exists. Otherwise, you spend a lot of energy and money doing stuff that has negligible impact on customer base, revenue, or profit. While it’s true that large businesses have the same issue, they can more easily afford to dabble – test new channels, experiment with their marketing strategy – and spend relatively small amounts of time and money on areas that will turn out to be fruitless. A small business doesn’t have that luxury.

And especially for a small business that depends on real relationships, spending your time cultivating “twitterships” may turn you into a “social media expert” – standing in line at the unemployment office.