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SHOW NOTES
Why is it that we’re always so quick to share our success stories, but we almost never talk about our failures?
Last year was an incredibly difficult time for my business.
We were losing money, we were losing clients, I was not doing a great job of leading my team.
My business had grown so fast that I just couldn’t catch up, and we suffered because of that.
I had to learn a lot of hard lessons, and thankfully, we’ve come out the other side of things and now our business is doing the best it ever has.
But I just wish I had someone to tell me what I learned on my own so that I could’ve been better prepared which crap started hitting the fan.
So in today’s episode of The Hirsh Marketing Underground Podcast, I’m talking about the Business Lessons Nobody Will Tell You.
These lessons will help set you up with a solid foundation so that, if your business does go through a rough patch, you’ll be better prepared and will be able to come out of it even stronger than before.
If you want to add to our conversation on business lessons nobody ever talks about, head over to my Instagram (@emilyhirsh) and leave a comment on my most recent post!
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Emily Hirsh:
Hello, everybody. Welcome back to the podcast and welcome if you are new. I hope you are all doing fabulous, having a good week. I’ve just had such an awesome week. We just came… I just got metrics back from our previous month. We just had our best month of the year, but not only best gross profit month of the year, but also net profit. And that’s always a big win for those of you guys who have teams and, you know, businesses with a large amount of expenses going in and out. Those high margin months are great and it just we’ve had consistent high margin months over the last like three, four months, which just makes me feel like we’ve got the business in a really good, amazing, healthy place.
Today I am going to be diving into business lessons nobody really talks about, and I was… Actually, we’re in California and I was actually talking to my husband last night because he just flew in because he wasn’t, we hadn’t seen him in like two weeks and he just flew in. And I was talking to him about these awesome numbers and just like sharing what, you know, catching up and going on. And I was like, you know, “I didn’t even tell you like a year ago, like I told you, but I didn’t tell you the details of how hard it was.” And I’m reflecting on my business a year ago, when I was here in California a year ago and it was summer and it just like, it was a rough.
I went through a rough time and I’ve talked about it a lot on the podcast. We had to rework the type of clients we were working with, but not only that, like I just had, I just grew so fast. I had to catch up to the growth, which happens, but it really was happening in a big way. I had to do work on myself as a leader in ways that I didn’t even know I needed to do. I feel like I’m a pretty aware and conscious person, but I really had to, you know, work on, on the way I was setting up my team and our leadership and just culture on the team.
And we went through a pretty rough spot and I told my husband last night, I’m like, you know, I didn’t really share with you the details of the day to day of like how stressed I was and how much pressure I was feeling during that time because if I talked about it, it just made it more like real. And I was just in this mode of like, “I just gotta get through it. I just got to get through it. I got to go through, like nothing I can do but just keep going and get through it.” And I had definitely days and moments where I wanted out completely. I was like, “I don’t want to do this anymore. I don’t want this level of responsibility.”
And you know, there’s so much I can, I’m going to talk about here, that I just feel like people don’t talk about at least, like I never heard it. And so if I had had so many tell me all these things going into it, I probably would have felt a lot better. But I felt like I don’t know what I’m doing wrong, but this is not right and I need, like, I don’t exactly know what to fix and, you know, I just felt really alone through it. And I didn’t, a lot of what I learned was that like there’s ups and downs in business. And just because you made it and you were having ups and you have a successful business and you made like a multimillion dollar business doesn’t mean you’re going to have not have massive doubts and massive like seasons that feel very hard.
And what’s hard is that one, I don’t know any other way, but to build a big business, but to have success, but to try to be better tomorrow than I was today. But on the other hand of that, the amount of pressure and responsibility that comes with that is sometimes really hard. And sometimes I don’t want that anymore and I want out of that pressure and responsibility and in the last year. Like, you know, I’ve never had a big business before and so I’ve never been through where I have expenses over a hundred thousand dollars a month of responsibility, and I have payroll, and I have 20 employees that I have to pay, and have to make sure have a job and feed their families, and that we have enough money.
And then on top of that, I’m also the breadwinner of our family. So I have to support my now three kids and our whole family and make enough so that I can pay myself what we need to not only pay our bills, but also have the lifestyle we’ve built. That doesn’t mean have a bunch of extra things, but I do have a nanny, and help, and support, and a bigger house, and I’ve committed to those things. And so once you get there, it’s like, you don’t go backwards. You have to figure out how to manage it all. And then on top of that, we were buying our house and I’ve never, you know, bought a house before, never been a homeowner, and having to go through that whole process, but then have the, you know, the down payment and all of that. And it was just like crazy amount of pressure that I was feeling that I didn’t really talk about in detail in the moment. Like I would talk about it, but I’d be like, “I don’t want to talk about it because then it makes it too real.” And I didn’t want to admit I felt like I was failing a little bit and I didn’t want to say that.
And so anyways, I was talking to my husband last night. I’m like, I’ve got to do a podcast on this because I know if I can be super transparent and vulnerable with you guys here, it will help somebody else, and somebody else needs to hear this because I wish that there was a podcast episode that I listened to when I was going through that a year ago. And there wasn’t, and all of these things were things that I really was just not expecting. I didn’t know, because you don’t know what you don’t know. And when you’re going through new experiences, you just didn’t know what was coming. It’s like becoming a parent for the first time. No matter what anybody really says, like you don’t know and then it happens and you’re like, “man, I wish people told me all these things that nobody talks about.”
Anyways, so I want to walk through what I’ve learned and reflecting on, and it’s cool because I am in a place now where my company is in the best place it’s ever been, from our gross profit and our size, but also more importantly, our margins and our net profit. And then even more importantly than that, my team and our culture on the team and our team happiness and our employee turn rate and the overall happiness of all my employees. And, you know, I’m still reflecting on like, what can I do better on that and what happened that got me to a place where that wasn’t in the best place a year ago? And I don’t think it’s one single thing. It’s a lot of things and none of it was intentional. I wasn’t like, you know, trying to make it an environment where team members were leaving, but it was a stressful environment for several reasons for the clients that we were serving. Then for lack of process, unintentional, lack of process, just because of the growth that we experienced that we had to catch up with for my, as a CEO, I have very, very high expectations for our delivery. And so the way I was putting that on my team was probably not the best way that I did it. You know? So a lot of things that I’ve reflected on.
So here are my lessons that I really learned in the last year. And I’m saying this as I’ve come out of this and I’m on the other side in a very good place. So it’s easy for me to reflect on it. If you’re in the thick of it right now, all of these things, you’re just going to have to remember that they’re true because it feels very hard and I wouldn’t have come on and necessarily shared all this a year ago, or even wanted to share how hard it was, because to be honest with you, I wasn’t even admitting it to myself. If I think about it to myself, I was going, “it’s going to be fine. It’s going to be fine. It’s all going to be fine. Like, it’s not that big of a deal. You’ll be fine. Next month will be better. Next month will be better.” And there was a good six months that were not great. Not like we are losing money every month, but just weren’t great for a lot of reasons. Some of them, we lost money and I’ll talk about that. And so it’s hard when you’re in the thick of it and I wouldn’t have been, you know, I’m sharing afterwards because I can share with a different perspective now that I’m through it. And I’m so happy I persevered and I got through it.
I just saw, my good friend, Alex Charfen, who I talk about on here all the time, who also definitely helped me through this, but he just posted today “a successful business Like doesn’t exist without big failures,” something like that. That wasn’t the word for word. And I was like, man, that is so true. Like a successful entrepreneur does not exist without having failures. And so you don’t always see the failures, but I had failures and I felt like I was failing every day for several months and I pushed through. And I’m so glad that I did, but that’s what we signed up for as entrepreneurs. And you know what? it’s going to happen to me again. I know I’ll go through another hard season at some point. Next time I think I’m going to be a little bit more prepared and here are the lessons why.
So the first one is that there’s going to be ups and downs in business. And this might sound like duh, like I know this, but when I started to achieve success in my business and I was really starting to get momentum about three years ago and I was making a ton. Gross profit was good. Net profit was good. My margins were like amazing, like 70, 80%. Just signing more clients, signing more clients. I was like, I think I figured it out. I figured it out. Like I’ve got a successful business. I did it. I built this as a successful business. And I felt like from here, it can only go up. It’s either going to stay the same or it’s going to go up. But really, I didn’t realize like it doesn’t mean, and this like almost sounds like a little crazy to me to say it cause it’s like, duh, but really in my head I was like, well, I’ve built a successful business. If I just keep showing up and doing what I’m doing right now, can’t get worse, just going to get better. And so it was very like a slap in the face when things did start to get worse temporarily.
And really the ultimate reason why they got worse is we grew so fast that it caught up to me and I had to go catch up with the growth and fix all these problems. And I also had to become a better person myself, a better leader, and do some self reflection and confront what I was potentially doing wrong and what the problems were and then fix them, and fail, and fix them. So knowing that there will always be ups and downs has helped me because now I understand like I’m in a great season right now with my business, but I know there will be another hard season I will go through. I will grow again a ton and then have to confront that and catch up with the growth. And that’s just the way it is. And there might be hard months or there might be hard quarters or there might be one hard year.I don’t know, you know, nothing is, that’s kind of the uncertainty that we signed up for as a CEO. And with that comes, I carry the responsibility through those hard seasons.
So when it’s very hard and you know, maybe cashflow doesn’t look as good or you’ve got a team churn problem or whatever it is that you’re struggling with right now, you as a CEO have 100% of the responsibility and that’s very hard to carry that because there’s nobody that can get you out of it. But you have to just show up and get yourself, you know, one day at a time and try to confront what the problems are and then improve it and do work. And so knowing there will be ups and downs, it is helping me because I know next time I’m going to be more prepared.
The next thing is that you need to have a savings and you need to have backup of at least a hundred thousand dollars plus. And I have that now and I don’t touch it, but I didn’t have that before, because I was in that mindset of like, well, I made it, I’ve made a successful business and if I just keep doing what I’m doing right now, there’s no way it’s not going to keep growing or at least stay the same. And so I had a savings, but it wasn’t a big enough savings. And so not that I actually had to get down to zero ever. Like I’m being totally honest with you guys. Like I had a savings and I didn’t have to ever drain the full savings, but still when your savings doesn’t even equal the amount of one of your payrolls, it’s scary because you realize when you have that level of responsibility. And God, I can’t imagine people with like, I haven’t even made it to a $10 million, $20 million business yet the responsibility is just going to grow, this is only going to get more significant, which means my savings needs to just get bigger.
But when you have that level of responsibility, you realize how quickly you can lose everything. And you’ll hear, I’ve heard several people who actually like went through a hard time in business, where they had to file for bankruptcy. I have a few friends who did that and they said, you know, as soon as that happened to me, I changed everything. So that next time I went through a hard season, I was prepared and I didn’t even have to come close to that. Like bankruptcy, whatever. We were really fine, but I still just felt like I was running on like, just fine. Like I just had enough to pay for everything, to pay myself what I needed to pay myself, to pay all my family’s expenses. And it never, it was like always just okay. Which doesn’t feel good when you’re like, wait for that deposit, then I can pay myself this, you know?
I’m being like, so vulnerable here telling you guys this cause I want you to see, if you see this, that I have been successful and I am successful, and I have created a multimillion dollar business, these things still happen to me because they happen to everybody. And so you have to always have a savings, and you always need to have backup, and you always need to be putting into that every single month that you can so that when there comes a month where you can’t, because for some reason you lost money or you barely broke even, or whatever it is, you have plenty of backup. So I put $6,000 to $10,000 a month right now, which is a certain percentage of my income I’ve chosen into my business savings. And then I put an additional amount of savings into my personal savings. And this is what I said to my husband last night. And I’m like, that was so hard in the last year, the last like three or four months from now have been really, really good.
So I’ve been out of this for a little while, but the second half of 2019 was very hard and I didn’t, I wasn’t prepared. I didn’t have the backup. So it would always feel like I was staying very tight. And I told my husband, like, I will never be in that place again where it becomes really hard and I don’t have backup. Like I will not let that happen. And so I’ve got this nest egg of savings that I will, I don’t touch. And I just add to it every month, $6,000 to $10,000, depending on our net profit. I do about, I don’t know, 5% to10% of our net profit, I’ll put into a savings so that I have a backup so that when that month comes when we don’t have like a massively good net profit month, because that’s going to happen as much as I hate to say that it will happen again, and when that comes I’ve got a backup. So I don’t feel that pressure is heavy as I did before.
Here’s another lesson a lot of people don’t talk about, or least didn’t tell me. Your margins are going to significantly decrease when you start to seriously build out a team, but you have to do it in order to grow. And on the flip side of that, be careful not to overinflate your team. So when I was just like me, my margins were like 80%, like so good. I felt like I had so much cash. I really didn’t know what to do with it. It was like, Oh my God. And I had never made that much money before. And I was just like, I don’t even know what to do with all this. Like, this is amazing. And I didn’t realize – and again, it feels like, well, duh, this is going to happen – but I didn’t realize when you start to grow out the team you’re trading margin percentage for your own time. And so you are giving up some margin in your business in order to get your own time back in order to grow your business more for the long term, but you’re trading that. And so you have to just have awareness around that plan for that. And you’re not failing when that happens and you don’t want to prevent that from happening because you need to grow your team. You need to grow your business, but it’s a very careful back and forth of maintaining profitability while growing your team, which then allows you to grow your business.
But it’s not instant, right? If you add team, it’s not like instantly. You’ve also added new business that you just give to the team. You’re buying back your time for long term vision growth, but you have to balance that. Also honestly, a year ago, I overinflated my team because what happened was I was like, cool, it’s so awesome to have a team just hire, hire, hire. And I had like a full time HR manager, full time HR assistant, like all these extra positions. Not all of these, but probably like two or three extra positions I just didn’t need at the size that I was at. So I had these, you know, businesses that I was looking up to that were at a higher level than me and I was like, okay, well I need that, and I need this. And a team is so awesome because it gives me back by time. So I’ll just hire, hire, hire. And then I kinda overhired and it impacted my margins.
And it’s not like when that happened, I was like, Oh, this is the problem, I over hired, I need to go back and change that. I didn’t know what the problem was. I was like, you know, I thought that I needed all those people. And I’ve now gotten a lot better at running our teams slim and making sure that my margins stay, my goal is above always 25%. Last month we finished the month with a 37% margin. So I’m so stoked about that. And I know that’s going to fluctuate a little bit, but I don’t want to go below a 25% margin ever. And so that’s my goal. And so I have to, I run the numbers. I make sure that is possible.
Okay, another business business lesson, nobody told me about is you might lose money some months. You might have shitty business months and you might not make any profit. And who gets impacted by that? You as a CEO. That is what you signed up for and that is why you have to have a backup savings for when that happens. And there are so many scenarios on why that might happen. You might have unexpectedly lost business, not made sales because of something in the economy, something in the world, something with your business. Like, I don’t know, you can’t predict it. And you might lose money. Maybe you even invested in something that you need to. Maybe you had some issues with payments coming in and they got delayed. I don’t know, but you will have months where you lose money or you break even. And that’s part of business and you need to be prepared for that by having a savings. And if you do that, it will take away a lot of the pressure that you carry as a CEO.
Here’s another really big lesson that I’m excited to share. Problems can not be fixed overnight. The bigger you are, the bigger your businesses, the more work you have to do and the longer it takes to fix foundational issues. So sometimes it’s even hard to know what the problem is because you’re in the day to day and you’re like, it feels like I’m doing everything I can. I don’t know what the problem is. Why is it not getting better? And you’re just, it just feels so heavy. And that’s where I was about a year ago. And even in the moment then I didn’t know what the problem was. And I had to take it one small problem at a time and fix it. And the bigger you are, the more team members you have, the more clients you have, the more infrastructure you have, the longer it takes to fix problems. Like it easily takes a whole quarter to fix the problem.
It just doesn’t happen overnight, and that’s very hard to grasp. Like why can’t I just make a decision today and fix the problem like that? You know, that’s what I want to do, but one, it’s really hard to diagnose the problem sometimes and then two, usually there’s a lot of micro things you have to do to fix a bigger foundational issue and to figure out what the foundational issues are. And so when you’re in a hard season, that’s why it’s called a season, it’s not always just one month. It can be a quarter and that’s okay, you’re going to go through that. And so your job during that is to learn from it so that next time you’re better. And you know what, I’m going to be faced with another hard season at some point, I know I will. And I know that I have to go through those to get through the next level.
I truly believe right now, I’ve gotten myself to where I can take our company to 10 million with not a lot of pain. And I think I went through the pain to transition from going from one to 3 million. And now I feel like we can get to 10. I really truly believe it in my heart that we can get to 10 and yes, it will be hard, but we are now set up to get to 10 million with my team, with our systems, with the leadership team I have, with my own leadership skills, with the person that I am. And I can show up for my team with the way we deliver for clients, with our marketing, with all of it. I think we can get to 10 million by continuing to do what we’re doing today. Whereas a year ago, it wouldn’t have worked. I had to go back and fix all these foundational issues, team issues, process issues, culture issues, my own issues, to be able to get us to that level. And so when I now grow, like I’m going to go through that to be able to then get to the next level again. Next time I hope I’m in a better place because I’m going to do what I’m saying, which is have savings, have that backup so that the pressure doesn’t feel so heavy.
Next lesson is once you’re growing, it won’t always be growing. You’re going to have seasons where you have to fix the foundational issues. And so don’t trick yourself and fool yourself that just because you’re growing now, if you keep doing what you’re doing today, you will always be growing because something will break and you’ll have to spend a month or a quarter fixing what’s broken. And that, like I just said takes time. All right.
The last lesson that I have listed here for you guys is that team and culture struggles are not fixed through one big announcement or speech that you do as a leader, but in work on the day to day small details. This was so hard for me to learn because once I started, you know, a year ago, like I said, we had team churn that I’m not proud of that. I really wish we didn’t, but there’s so many variation in factors. One, like we hired some wrong people because our hiring process wasn’t correct or at the level we needed it to. I mean, I had other people in my company making the decision to hire people without me, which is great and that’s what we have now, but it wasn’t the best situation and scenario because I was disconnected from what was happening in the business.
Number two, we had the wrong clients. And so I had to fix that and I had to go back through and fix that. That was another team issue. Number three, leadership issues, myself, things I wasn’t even aware of in how I was setting up expectations, and processes and communication in the company that was not intentionally there to have team churn, but was possibly causing some team churn. Now all of those things combined, I had some culture and team issues because when a lot of people are leaving your team, it’s going to cause culture issues out as a whole. And this was hard for me because I wanted to fix it overnight. I wanted to do one big announcement or speech that would be like, guys, everything’s going to be great. Like here’s what we’re doing. I’m sorry for this. Here’s what we’re changing. And that’s great. And people like that and appreciate it, but it doesn’t really move the needle very far.
What moves the needle is consistency and the small details of showing people that you care, of respecting work life balance of stopping the team churn so that that’s not happening, of growing the trust and the positive culture in the company, which comes from the small tiny shout outs here and recognition here and relationship building here. And all of those things happen in the small details in the day to day. And that, and it takes time because that’s happening in the small details. You can’t fix this in a week. You can’t fix it overnight. You can’t even fix it in a month.
Now my team is in an amazing place. Like we, we have a hundred percent success rate in the last, I think five months of all of our new hires, which is amazing. And we, I get on my huddle and the team culture is just so good. And I don’t think that I’ll go back to the place before where we were, because I think we’ve fixed it. Now we might mess up our hiring process again, one and have to, you know, fix it because we grow and because then there’s a crack in it and I have to go back and adjust that. But it was very hard for me to learn that big issues like team, and like your culture on your team can’t be fixed by me doing some big speech, like state of the, whatever it’s called. I forget – the state of the union speech – that I can’t fix big problem with that. I have to fix it through doing the work through showing up, fixing the small details and every day making it just a little bit better and then it will be fixed. And that’s what I did. And you have to go through the hard season doing that, committing to do that every single day until it gets starts to get better. And it will, if you’re committed to that, it will.
So I wanted to do this episode today because I want anybody going through a hard season in their business to know that you’re not alone. This is part of it. This is what you’ve signed up for as a CEO and show up every day. Don’t you feel like you’re failing because remember, failing is part of the process. Failing’s part about getting to that other side. So even if it might feel like you’re failing, like I did it, that’s part of it. And you’re not alone in that. And more importantly, I really want, I want you guys to understand this is part of the process and as much as you can, learn from every piece of it so that next time you’re set up better. And that’s just what we have to keep doing, going through it, doing better, showing up and doing it again. And I know it’s hard when you have the level of responsibility.
I never thought I’d have this level of responsibility in my life between my business and my family and all of it. And it’s not easy, but I don’t know any other way, but to do this. I would be bored without this. Right? And I can’t just say, Oh, my business, it got to this level so I’m just going to stop growing. Like, I don’t know how to do that. And so this is what I’ve signed up for as much as like it’s a dream to maybe do that and just settle and what that would feel like, it’s not possible for me. It’s just a dream. I have to, I have to show up, I have to grow. That’s what I was put on this world to do. And that’s what I will continue to do. And I’ll continue to be transparent with you guys and share this so that you don’t feel alone so that you feel like you can go through whatever it is you’re going through, or maybe you’re in a growth season.
And this will help you prepare for when that does come. And somebody is saying what the reality is behind the scenes, because not enough people are doing that and I wish I had people doing that when I was going through this, because I truly felt like it’s me, I’m failing. And it was really hard for me to see people doing so well because I was like, what am I doing wrong? And it was so good, and what do I need to fix? And it was that day to day, small things, one step after another, just continue to improve, continue to fix it, find the problems, fix it, find the problems, fix it. And it took time. But we got to the other side. Like I said, my team churn is now like, non-existent, we don’t have team churn, which we, because of our hiring is so solid and because of our training is so solid, our culture is so solid.
Now I just finished a month with a 37% margin, which is really good down from like, I don’t know, we had tons of months last year, that was like 10% margins. And that’s not enough for me like that. You know, I’m again supporting my entire family. We were buying a house. It was very hard. And you know, I did, I do have good, great friends, my husband and support. And as much as you can talk about it, looking back, I wish I talked about it more. I think I would have felt less alone, but I was afraid to even say I am failing, this is not working, this is bad, because it made it more true. So I kept it all into myself and just try to get through it. And I think I could have talked about it more and been told like, this is okay, you will get through this. This is normal. So I want to be that voice for you guys. Send me a message if you guys love this. Rate our podcasts, that’s always helpful. If you love this, I’d love to hear from you on Instagram or reply to our podcast, and thanks so much for listening today.