We asked some (otherwise very successful) BAM Practitioners that we know to share some of the errors, disasters and unfortunate events that they have experienced in their business as mission journeys. Here nine BAMers share eleven stories about their mistakes and misadventures:
They Didn’t Come…
In our first years we did not have enough focus on sales and revenue, it was more of a “build it and they will come” mindset. It almost killed us. Then the solution was to hire a sales guy in the US, but the problem was twofold; first I should never have tried to outsource sales so early as CEO and second I hired a great guy but one that had bigger company experience and not the early entrepreneurial sales experience needed at our stage. This was a second failure on the sales side that almost killed us. I have come to fully understand the saying “no margin, no mission” and put sales as a key priority for myself until we got fully into orbit and could hand it off to the right person with right experience for our company stage, deal size and industry. MC
Too Many Cabinets
There’s two ways you can kill a startup: too little business and too much business. A couple of years ago, our 5 month old custom cabinet business was featured on our local news station. In our exuberance, we signed up too many customers with an unrealistic view of how quickly we could complete jobs. In less than a month, we had ended up with upset customers and significant cash flow problems as we made mistakes in our rush to complete jobs whilst also missing deadlines. In this case, we were able to recover our financial footings through a few key factors: Our product ultimately was a good fit with customer demand, so after apologizing and then completing jobs satisfactorily, we were able to refine our product and service to even better serve our customers. We started specializing in only Shaker Cabinets which sped up our production time and allowed us to more strategically market to our customers. Finally, our grasp of our cash flow position enabled us to raise funds in time (through God’s abundant blessing) to make it through our mistake and onto the future. JR
The Untimely End of Piglets
I got involved with a Pig Farm in Laos. It was a startup and I failed to ask critical questions about the business plan as I was so impressed with the people and the idea. The plan, such that there was, showed a healthy numbers based on how quickly pigs breed and have piglets. What I failed to ask, and none of us considered, was the standard fatality rate of piglets in Laos! More pigs died than we had imagined, the number of piglets we could sell never hit the figures in the plan and the profits never materialised. DS
A Fatal Flaw
During our start-up phase we experienced one serious technical failure with our first container load of products in the field, and we had to scrap a full container of products. It was a particularly obscure failure mode which we didn’t predict in our product development work, mainly because it was outside of our area of technical expertise at that early stage. We didn’t know what we didn’t know! Even if we had, it would have been quite hard to test in our context as the facilities are not available. This all took 6 months to 1 year to work through again and we had to sign an indemnity against future failures once we had corrected the issue. MH
More recently presented samples to a customer for several hundred thousand US Dollars worth of new business, which I as MD had only checked from photographs, and a written sign-off from one of our senior staff, whom I had worked with for many years and trusted. The finalising of samples coincided with a family commitment which I couldn’t change. The customer identified some serious issues with the samples, and we needed to repeat the whole process taking an additional two months to do so. The result was reputational damage, and a delay in production ramp-up which was expensive. We realise that we still need to work very hard in building our management capacity. MH
Losing the Paper Trail
One mistake we made was not properly documenting our relationship with a committed and gifted believer from the country we were working in. When things got tough and we needed to end the business relationship, it put a lot of stress on what was expected during and after the transition. MM
The Wrong Colour
Just recently we had some major mistakes in production, using the wrong colour of fabric due to poor quality control etc. This has cost us dearly, with us having to completely replace the order, including shipping charges, import duties etc – a huge loss! This has made us realise the need for far more close supervision and we have had to improve our systems! KA
An Abuse of Trust
We also discovered a key leader was abusing a couple of the women we employ and taking advantage of their vulnerability. He is married to another of our female employees, so the implications were huge as he was instantly dismissed. He had our trust and violated that and this has been painful for all particularly as we sought to protect his wife and family as well as the others involved and so could not speak publicly as to the cause of his dismissal. This has then led to others questioning our decision to terminate his role and not being fully supportive of us in it. It’s a reminder of the broken society we live in and work amongst! This broken trust has been so painful on a personal level as well. KA
Not Enough Crabs!
We attempted a completely new restaurant, a high-end South Asian seafood cuisine in a very central (but expensive) location. It lasted only for 10 months, and incurred a huge loss. Our specialty was mud crab from Sri Lanka and Indonesia but the inconsistent supply and frequent shortages turned our customers away (even though we have substitutes like Dungeness Crab from North America). In the end, we were being “sold out” by our suppliers. Always test out your market and make sure you have done your research (loads). I just hadn’t done my homework enough. VL
Trashing the Code
We started working with a client who wanted to build an iOS team however we didn’t have any staff members with existing experience in that particular technology. As soon as we started hiring for this project, we soon realized that in our location it was very difficult to find talented iOS developers who were able to deliver quality work. Long story short, we weren’t able to meet our client’s expectation and had to throw away a lot of the code written by our staff. It was a difficult situation to manage and our client relationship suffered. We still are working with this client but are now using a different technology, and have worked hard to come up with a better accountability and communication process to make the relationship work. YS
Failure to Disclose
In three companies we have had the privilege of mentoring, the business failed, or was put into crisis, because the Principals of the businesses did not disclose the problems they had in time. In Business 1, a crop failure occurred. The agrologist withheld the information, meaning that the capital and operating loan investors could not respond in time to save the company. In Business 2, the owners did not disclose all their debts to the lenders. This led to a funding crisis, which could have been resolved if the truth had been told. In business 3, the board had not been called for a prolonged period, because the owner was too embarrassed about the challenges he faced. Once the board was reconvened, they rose to the challenges faced and helped the Principal. The lesson: Tell the truth, early and often. As an owner, share the challenges you face. MP
Everyone makes mistakes in business and valuable lessons are often hard-won. We hope that you will be able to learn from these difficult experiences and perhaps avoid running into some of these situations!
Compiled by Jo Plummer, with thanks to the BAM practitioners who shared their experiences.
Jo Plummer is the Co-Chair of the BAM Global Think Tank and co-editor the Lausanne Occasional Paper on Business as Mission. She has been developing resources for BAM since 2001 and currently serves as Editor of the Business as Mission website.