The Things I Wish I've Known Before Starting a Business

In this article I'll share with you some important lessons I had learned in over 35 years managing my business. I’ll show you some real-life examples of mistakes I've made and strategies to avoid problems.
Running a business successfully requires various strategies.
Running a business successfully requires various strategies. | Source

The Importance of Having Business Policies

A Powerful Control Mechanism

One of the first things taught in business school is policy-making. I learned quickly how powerful policies are, and how they can make business life much easier.

Best explained with this example:

One day, on a Friday, when I was ready to close up for the day, a customer called and wanted to place a last-minute order.

He didn't have a credit card and asked me to ship him my product with an invoice. I told him that without a credit card he would have to prepay.

He told me that there was no time to send a prepayment since he was having a meeting with the Board of Directors on Saturday and needed to present my product to them at the meeting. He needed it shipped overnight.

I offered to ship COD, but he told me that the accounting department was already closed and that he couldn’t get a check prepared for Saturday’s delivery.

My customer said he was having a meeting with his Board of Directors the next day and needed me to ship overnight. I fell for that!
My customer said he was having a meeting with his Board of Directors the next day and needed me to ship overnight. I fell for that! | Source

I tried to offer other solutions, such as charging it on his personal credit card and having his company reimburse him. However, he kept coming back with the right answers to keep me on my toes.

Eventually I fell for it and shipped with an invoice. As you might guess, it was never paid and I never was able to collect. I never got the product back either.

His company claimed that the order was never approved and that he had no right to place the order since he was not a buyer for the company. They also said that they never received the merchandise and that I needed to take it up with him.

If I would've known the idea of policy-making at that time I could have simply told him "It is our policy to ship COD or with a credit card. There are no exceptions. That is our policy.”

Having a policy to abide by would have ended the discussion and would have saved me the hassle of rushing out an order and never getting paid.

Breach of Convention Rights

... by Saying the Wrong Thing

Be careful what you say. Saying the wrong thing can backfire. Even if you think it's a positive statement, it can be used against you.

I took the liberty of working on Saturday.

— me

Well, in that case I don't need to pay you.

— client
How can this happen?
Saying certain phrases can have legal meanings that are completely different from what we had intended.
Saying certain phrases can have legal meanings that are completely different from what we had intended. | Source
This example will make this clear:

I did computer programming for a customer of mine who was an attorney. I worked Saturday to get the job done for him. One day I told him "I took the liberty of working on Saturday."

I sent him my invoice, itemized with the days and hours that I worked.

When he sent his payment he deducted the amount I charged for the work I did on Saturday. He claimed that he didn't have to pay for Saturday's work because I had told him "I took the liberty."

In his eyes from a legal standpoint I had beached the convention of working normal hours without his prior approval.

I learned that certain phrases can have legal meanings that are completely different from what we had intended.

Unintentional Contract of Agreement

This can have undesired results.

I learned something really important and it was a costly lesson. Acceptance of an agreement is implied and binding simply by performance. It does not have to be a signed contract.

If you go ahead and do an assignment before all the details of a contract are worked out, you are creating a binding agreement to the present state of affairs.

Here's an example: One time, two fellows came to me and told me that they wanted me to create an interactive pay-per-call dating service.

With pay-per-call services, people would dial an access number and interact with a touch-tone driven menu to get information over the phone. The phone company would charge for the service on their phone bill. The revenue would be shared between the phone company and the developer.

As for these two fellows who came to me... One of them was an investor in start-ups and ran a company that sold radio advertising. The other fellow was a DJ and he had the voice talent to create radio ads for the business. They needed someone to fill one other position. They needed a computer programmer. That's why they came to me.

The idea for the application was to allow men and women to record a personal profile in their own voice. Other callers could select from a menu to listen to profiles of people of the opposite sex, and by age range.

As they browse through recorded profiles they could press a key on the phone to leave a private message for anyone they liked.

The profiles were public but the private messages were voicemail that only the recipient could receive, so interested people could leave a callback number to touch base. Callers would be charged by the minute on their phone bill.

Okay, so that's how it works. Let me get back to telling you what happened and how I lost my rights by letting these fellows use my software prematurely.

These two fellows told me that I had a choice of being paid for the development, or sharing one-third of the company proceeds. I knew how big this could become, so I chose to waive payment for development and go with the one-third share.

I lost my rights by letting my client use my software.

I let my client use software that I wrote before finalizing our agreements. I learned an important lesson about my rights from this mistake.
I let my client use software that I wrote before finalizing our agreements. I learned an important lesson about my rights from this mistake. | Source

While I was working on the programming we were also working out the agreement details for the contract. There was one clause that we were having difficulty agreeing with and it never was resolved.

They required that if any of us dies the other two would get the share of the deceased. I preferred that if any of us dies, our third share should pass to our wife.

Even though I wasn't married I still looked ahead. I wanted to be sure that anything I did would benefit my future wife in case I didn't survive. Hey, you never know!

Well, the day came when I finished the programming of the system. We never finalized that one last detail in the agreement. One of the fellows came to me and said,

"Listen Glenn, you're finished with the programming and we are ready to get started with the business. Why don't we start running the system and if we still don't agree on things in another month, we'll shake hands and walk away as friends."

I fell for that and gave them the software installed on a computer. I helped them hook it up so the phone dating service would be online, and they started running radio advertising.

The service was an overnight success. Soon the first check came in from the phone company. I saw the check. It was for $100,000.

I asked for my third, but they told me that since this is the first check we should put it back into the company. That made sense to me, and I went along with it.

A month later another check came in for roughly the same amount. I know, because I saw that one too. Again they came up with an excuse for not giving me my third.

The third month they didn't show me the check. I insisted that I get my third of the proceeds now, or else I'll pull the plug.

I created a legally binding contract by putting the wheels in motion.

Putting the wheels in motion is as legally binding as signing a contract.
Putting the wheels in motion is as legally binding as signing a contract. | Source

They told me that I couldn’t do that. They said if I pull the plug on the computer that I will be disrupting a million dollar corporation. $100,000 a month is a million a year. They explained to me that if I disrupt that kind of income that they would sue me.

I asked my attorney if that was true. Could they actually sue me even though I never signed the contract? My attorney told me that I actually did sign the contract. He explained that by turning over the software and the computer and hooking it up for them,

I had shown agreement to, and acceptance of, the contract as it presently stood. I had agreed to the contract by my conduct. That was legally equivalent to having signed the agreement.

My attorney went on to explain that if I pulled the plug they could indeed sue me. However, if I don't pull the plug then they cannot do anything against me and I could sue them for nonpayment.

As you can guess I left the system running and initiated a lawsuit. The suit dragged on for a whole year. After several months one of the fellows came to me and said,

"Glenn, you can keep us tied up in court forever. We have the money to fight you."

I told my lawyer that "I created a monster I cannot fight and I need to discontinue the lawsuit."

My lawyer did something else for me. He worked out a settlement to pay me for the development of the system. What a shame. That was nothing close to what I would have had sharing one-third of a million dollars. Every year!

Lesson learned. When you do something, even without pay, you are showing agreement.

Avoid Inadvertently Working for Free

I was doing a project development for a client and he delayed making the agreed weekly payments. My lawyer told me to stop working. He said, "Just stop! If you keep working you are agreeing to work without pay and he'll never have to legally pay you." That came from the mouth of an attorney. You can trust it.

After my prior lesson I understood what he meant. I never completed that job. My client lost out because he made initial payments and never got a completed system because he didn’t continue with the agreed payment schedule. He created his own demise. I understand that now. That's business!

I hope these stories will help you with your own business. How do you feel about this? Let me know in the comments below.

Dealing with Difficult Customers

It can be difficult to keep customers satisfied when providing service or support. This is and example of a personal experience.

I've learned a lot with giving customers the service they expect. Unfortunately, there are rare cases were almost anything you do is fertile, especially if the customer is a none-listener.

Dealing with the public, providing service or support, is sometimes difficult. This discussion of my personal experience provides some suggestions with keeping customers satisfied.

The Importance of Keeping Good Records

You can’t give people what they want if they don’t know what they want and they are too stubborn or too busy to understand. That makes it really difficult in a service-oriented business.


Some people aren't going to listen, no matter what you say. You can explain in detail what the consequences are, and you can tell them what's important to their own benefit. Yet, they don't see it, and they blame others for their problems.

There are people in this world who seem to just make their own lives more difficult. There usually is no satisfactory solution when dealing with the type of behavior.

It's important to protect yourself when dealing with these people. It helps to keep clear and precise records of events that take place, as well as copies of correspondence. This is especially important when dealing with difficult people.

An Example of Failed Support

In my earlier years in business I found myself wasting time trying to provide support to people who could not follow instructions.

As an example, here's an incident that happened to me…

I once had a customer who told me he wanted his voicemail service removed from his phone system because he didn’t want his callers to be able to leave him messages. He told me that he just didn’t have the time to return phone calls.

Being in the phone systems business, I felt the need to give him an education on proper voicemail usage and business ethics. However, that's not what he wanted to hear, so I just explained to him that if I remove his voicemail, any messages he had would be lost forever.

In order to be sure there was no misunderstanding I asked him if he had any present messages before I remove the voicemail service. He became frustrated and upset that I was questioning him, and he shouted...

Just Do It !!!

I later sent him an email stating that I will remove his voicemail that evening and that if he has any messages he should listen to them before the end of business hours since they will not be recoverable afterwards. He once again became upset and shot back a quick angry email saying…


Okay, so I did it. Reluctantly I might say. Once I removed the voicemail service the messages are gone!

The next day he called, yelling at me “Where are my messages?”

All I could say was that per his request I removed his voicemail. He said he just wanted me to remove the voicemail service and not the messages. I tried to explain that I confirmed with him that his messages would be gone along with the voicemail.

He didn’t accept that. He became extremely irritated, yelling and cursing, telling me that I destroyed his business because he had important messages from people and now he didn’t know whom they were from. He even threatened to sue me.

He sent me an email telling me to expect a call from his attorney. Therefore, I sent him back a copy of the email with my final request to listen to his messages before I remove them. In addition, I included his reply where he confirmed... “JUST DO IT!!!.”

I asked him to provide that email to his attorney so that he or she will know how to handle the lawsuit that he was proposing. I never heard from him again, or from his attorney.

The Importance of Signed Agreements

Contracts and agreements have to be clear and signed before starting any work. It will help avoid disputes that might otherwise arise from misunderstandings.

I've had occasions where all I had to do was refer a client to our original agreement and that shut them up. For example:

I remember a client who was a reseller of my software. I gave him a 50% discount as long as he continued selling every month. After six months of inactivity he came back with an order and expected the 50% discount. I refused to accept it. He argued that we had an agreement. However, when I showed him the contract that he signed, he paid me the higher amount.

Keep a Business Website Updated with Answers to Common Questions

It helps to repeat yourself. I never hesitate to explain things over again when someone asks the same question more than once. It shows that they truly have an intent to “get it.” That’s a good thing.

When you deal with lots of people, however, your time can easily be abused. You can’t give them what they want if you don’t have the time to do it. For a good business structure you need to free up time for your own creativity and keep everything else running smoothly.

In the early days (before the Internet) I used to keep track of the answers and explanations I gave when people asked questions and included them in updated user’s manuals for my products. After all, I figured any question one person had may be on the minds of other customers too.

So what better place to put those answers? To include them in the user’s manual makes it a better guide because it addresses known issues and questions that came from real-life usage.

Today it’s easier since customers can visit websites to do their research. It helps promote customer loyalty since they tend to come back when they want to review something on their own.

For that reason I constantly keep my website up-to-date by constantly making changes to various sections, sometimes immediately after hanging up the phone with an inquiring customer.

Almost all discussions I have with people enlighten me to something that is missing on my website that could help others. In addition, I discover something that is misunderstood and I go and update my website to improve the clarity of the misunderstood section.

How the Internet Saved My Business From Costly Advertising Fees

In the old days (prior to Internet) I had huge expenses paying for advertising on radio and in trade magazines.

When I started my business in the early 1980s the only way to get customers was to place printed ads in magazines and trade journals. This became more and more costly over time. It almost didn't pay to advertise since the cost of becoming greater than the results.

Then came then Internet. It saved me as print and radio advertising began to skyrocket in the 90's.

I created a web site. In addition to using my site to display my products, I also wrote articles related to my niche. I quickly discovered that useful content attracted customers better than trying to pull them in with advertisements.

Ever since the Internet gave me an alternative, I never had any more advertising costs. Zero! Zilch! Nothing!

I got all my customers by way of their own web search. People look for solutions for their business and that is a powerful magnet. There was no longer a need to look for customers. They looked for answers and inadvertently found me!

I discovered that giving the reader content that benefited them actually caused people to discover my site as search engines became popular. It was free advertising because once I got the eyeballs the sales happened without effort.

The Basic Lessons

With all the affairs of a service-oriented business you just may need to deal with silly things from time to time. That’s business, and it can’t always be avoided.

Just handle those situations as professionally as you can, keep a record of troublesome situations in case you need to reference it later, and create written agreements before getting involved with new endeavors.

Always focus on what people want in every way possible! It will build a better vendor-customer relationship and it will bring you more business success as time goes on.

© 2012 Glenn Stok

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Comments 22 comments

Charles James profile image

Charles James 4 years ago from Yorkshire, UK

Yes. Just because you are honest does not mean everyone else is. Or their perception of honesty is different to yours.

Glenn Stok profile image

Glenn Stok 4 years ago from Long Island, NY Author

Charles, yes, it's true that there are dishonest people in the world. When I first started my business 30 years ago, I was taken advantage of a number of times by games people played. But that is where I got my education about making policies and sticking to them. People can't play games so easily when we stick to policy and insist on it from others in business. Thanks for stopping by and commenting.

Millionaire Tips profile image

Millionaire Tips 3 years ago from USA

Wow - it is amazing the greed of people! The dating service story is crazy! I can see if you would have to agree to their terms about the splitting of shares after death, but the terms were clearly 1/3 for each.

I agree with the importance of making policy. I thought I could come up with the right decisions on the fly, but it is hard to do that when people present their desperate situations.

A professor had translated a document, and needed me to type it up for him - back in the day when typewriters were used. I had a word processor, and typed it for him. He gave me the work in disorganized batches and his handwriting was terrible and the subject was incredibly boring. When it was finished, he needed it right away and wasn't able to pay me right away. Since he was a professor and his situation was so desperate, I left it in the mailbox for him, even though I knew the smart thing to do, and I didn't normally give the typed document without exchanging it for cash. He never paid it, saying that he had turned it in past his deadline, and he was a poor professor. I guess I could have made a stink and at least given him some public shame, but I was busy trying to make ends meet and decided to chalk it up to a hard learned lesson.

Glenn Stok profile image

Glenn Stok 3 years ago from Long Island, NY Author

Millionaire Tips,

Sorry for the delay in approving your comment and replying. We had a severe hurricane here in New York and I had no power, no Internet, and no phones, for two days.

Your experience with that professor is definitely a lesson learned. I've had a number of those types of experiences too. We tend to trust people too much. I decided that in business I will no longer trust. I can't. I'll still trust my friends. But in business I have to make rules and set policies. If people don't follow the rules, well, that's business.

It's a shame that your professor got away with that. But you are right when you said you were too busy to shame him. I handle things the same way. When someone screws me I just stop dealing with that person. And I stop thinking about it. Dwelling on it or trying to get some satisfaction out of it serves no purpose and only wastes my time. But there are times when they come back for more help and then I feel good when I refuse.

Thanks for your comment and for sharing your experience.

Jay C OBrien profile image

Jay C OBrien 15 months ago from Houston, TX USA

Very good article. I made the mistake of lending money to public servants. I thought it was a good risk because they were employed with civil service. Well, these peace officers did not pay me back. I thought I could trust peace officers.

agvulpes profile image

agvulpes 15 months ago from Australia

Yes there are many 'quirks' in the law! As someone who was in business for some 40 years I reckon that I was 'stung' a number of times! I lost a piece of equipment worth over 4000$ because I trusted my Salesmans judgement ! We had 'sold' it to a new business who due to some wrong doing on their part were not allowed to open! The business was put into 'liquidation' and all the assets were 'auctioned'! We went to the auction to bid but nothing went cheap enough to buy back!

From memory we recieved about 100$ :(

Lesson learned :)

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

Jay C OBrien - Thanks for adding your experience. You have shown a good example that lending money should be done with written paperwork to prove the transaction and clearly define the collateral and terms.

Kristen Howe profile image

Kristen Howe 15 months ago from Northeast Ohio

Glenn, thanks for sharing your experience and pointers on how to be successful in business. Congrats on HOTD! This is real useful and helpful for those who want to do well in business.

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

agvulpes - That's a terrible loss. Sorry to hear about that Peter. I wonder if the auction house would have been able to sell the item if you had put a lean on the equipment and had paperwork to show that it was not paid for.

I once had the experience that a dealer sold plagiarized copies of my phone system software. My lawyer was able to locate several of the end users who purchased from him and sued and collected payment. Stolen equipment can be confiscated even if one paid for it. But in your case I guess they can argue that it was not stolen, per se.

Buildreps profile image

Buildreps 15 months ago from Europe

Wow, this is seriously a great Hub. You really learned your lessons the hard way. You wrote it very honestly, clear and open. I never had any serious troubles with money as an entrepreneur. I used mainly one rule: good things come quick, and when they didn't I immediately unhooked all further involvements. No matter how tempting the promises were. Bye bye! You perfectly described this with your own experience with this blah blah story about the board meeting.

Congratulations with your HotD!

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

Kristen Howe - Thanks, I just discovered it too, via an email, that HP selected this Hub for Hub of the Day. Thanks for your kind thoughts.

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

Buildreps - That's a very good additional point you made, and it's also a very useful policy to follow. Give a time limit to a new endeavor, and move on if it doesn't happen so that you can apply your resources to something more promising. That's my take on what you said and I could've used that idea decades ago. I was too patient when I first began my business and I spent a lot of time with useless things.

Omeva profile image

Omeva 15 months ago from Lisbon, Portugal

Hey Glenn,

That part about them taking the software and and your one third of the company made me the most livid. I have had some misfortunes happen to me at times, but it doesn't come close to what you experienced. It makes me feel like when I was scammed.

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

Omeva - These experiences are never forgotten. But hopefully for most, each is a learning process to help avoid similar scams.

StephanieBCrosby profile image

StephanieBCrosby 15 months ago from New Jersey

Congratulations on your Hub of the Day!!!

Your last point resonates the most with me. I am often told to stop inadvertently giving my services and advice for free.

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

StephanieBCrosby - I don't mind teaching friends who want to learn something. But giving away services in business is a different thing altogether. Thanks for the congrats.

RTalloni profile image

RTalloni 15 months ago from the short journey

Congratulations on your Hub of the Day award for this useful post that shares what you've learned via experience. It's always difficult to believe that "friends" would be devious, that when you do business decently and in order others would use your courtesies and throw your good faith in them away, but attorneys stay in business because it is all true (and more).

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

RTalloni - True indeed. This is what gives attorneys the business, unless we know how to avoid these traps. Thanks for reading my Hub of the Day.

ktrapp profile image

ktrapp 15 months ago from Illinois

What a great source of business advice with real world examples. I've done some contract work for several law firms in the past; glad I never used the phrase, "I took the liberty" and had it held against me. Anyway, congratulations on a well deserved hub of the day.

Glenn Stok profile image

Glenn Stok 15 months ago from Long Island, NY Author

ktrapp - Absolutely! It sure is interesting how lawyers can pick out legal meanings from what others perceive as casual statements.

brakel2 profile image

brakel2 14 months ago from Oklahoma City, Oklahoma

Hi Glenn _ This is a well written hub, filled with interesting information. It is a little scary in that you must take care and need legal advice for every step you take. It seems like some folks know how to take advantage, if you miss a step. The information makes me realize that we must always protect ourselves. Thank you for your willingness to share your own mistakes to help others. Congrats for HOD. You deserve it. Sharing, Blessings, Audrey

Glenn Stok profile image

Glenn Stok 14 months ago from Long Island, NY Author

brakel2 - It's true, there are always people who are on the lookout to get someone to slip up so they can take advantage. Thank you, Audrey, for your kind thoughts.

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